Will Apple Enter the E-Reader Market?

December 21, 2009

In-Stat ran its annual holiday survey this year to find out what consumers will be buying at the holiday season. There were no real surprises – HDTVs and PCs topped the list. But of interest was the small percentage of respondents (4.3% out of 1,352 total) who were considering an e-reader purchase at this festive season.

This figure is “of interest” because the e-reader market is generating quite a lot of buzz. Amazon, the market leader, upped its marketing efforts for the holiday season. Sony expanded its lineup to include $200, $300 and $400 models in time for the holiday rush. And after a snag or two, Barnes and Noble was able to launch its branded Nook to positive reviews.

Fast forward to the 2010 Holiday Survey In-Stat plans to field, and we expect a much higher percentage of respondents to consider an e-reader for purchase (Check back with us next year!) So, other than the typical “falling price points” and “increased competition” market drivers, why do we expect this increase? One word: Apple.

Rumors abound of an Apple-branded entry into the e-reader market. These rumors include a 10.1-inch liquid crystal display (LCD) screen, a hefty $1,000 price point, a partnership with one of the big US network operators, and first half 2010 availability. As mentioned, there is already some serious competition heating up in the e-reader space. But that hasn’t posed a problem for Apple in the past. Consider when the company entered the PMP/MP3 player market: In 2001, three years after Rio established itself as the dominant player in the space. In similar timing, Apple launched the iPhone in 2007, five years after the Blackberry defined the smartphone space (“Crackberry” anyone?).

Going back to In-Stat’s holiday survey: Those respondents considering an e-reader purchase at the 2009 holiday season were asked which device capabilities, other than reading e-books, are of most interest to them. The top three responses were:

As mentioned earlier, Apple is rumored to be in talks with a leading network operator in order to offer a wireless connection via a cellular network. And the company has proven, beyond a shred of doubt, that it can deliver a stellar PIM and audio experience in a mobile device. The fact that Apple will be late to market ripe with competition will not pose a problem for the company. As we’ve seen again and again, Apple will design a device that will meet consumers’ needs in a way its competition has not.