Analysts issue last rites for e-readers

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The e-reader could “go the way of the dinosaurs” in the next few years according to a market research firm that might just be using an overly-dramatic metaphor.

IHS iSuppli says shipments of dedicated e-reader devices will fall significantly this year compared with last and that this pattern will continue for several years as buyers switch to multi-function devices such as tablets.

According to the company, total e-reader sales were one million in 2008 and shot up to 10.1 million in 2010 and then to 23.2 million last year. However, it’s estimating that sales this year will be down more than a third to 14.9 million. Turning to its crystal ball, it reckons the figure will fall to 10.9 million next year and eventually to 7.1 million by 2016.

(We at Geeks Are Sexy would like to take this opportunity to predict there will not be 7.1 million dinosaurs on Earth in 2016.)

The company argues that such a rapid rise and then fall in a specific type of technology is unprecedented.

The problem with the theorizing is that it seems to be based only on one specific piece of objective evidence: that sales are down this year compared to last. The rest seems to be supposition that takes the fact that tablet sales are up this year and does the old correlation/causation trick.

The chances are that some people who would have considered buying an e-reader in 2012 instead decided to get a tablet, particularly considering that Amazon itself is pushing the tablet versions of the Kindle. However, the forecasts seem to be based on the idea that this is the main or only reason for the sales patterns, and that it will continue to hold true for at least four years to come.

To be fair, IHS isn’t alone in its predictions. Rival analyst firm IDC says e-Reader shipments will also fall this year, though its figures are 27.7 million for 2011 and 19.9 million for 2012. It also points to tablets, saying that for some buyers at least a tablet offers a reading experience that is just “good enough” that they don’t want to go for a dedicated device.

IHS concedes that prices will continue to fall for dedicated e-readers, but that to have any hope of avoiding a total collapse manufacturers may have to sell them at or even below cost price — a prospect that certainly favors Amazon over its rivals given the opportunity to make that money back from book sales.

However, IHS doesn’t address the possibility that if prices drop — and devices become even more portable — buyers may no longer need to chose between an e-reader and a tablet, and can instead choose both.

[Kindle Picture Source: Wikimedia Commons (CC)]