As Tablets Surge, Ereaders Struggle
Despite strong demand for smart connected devices, consumers may be passing over ereaders — The connected device market continues to see substantial growth worldwide. The International Data Corporation (IDC) reported that in Q3 …
Context & Ripple Effects
The e-reader's slide has been building all year: Pew tracked ownership doubling through the 2011 holidays and again into early 2012, but by December IDC had cut e-readers out of its growth story entirely, raising its tablet forecast to 122.3M units by year-end 2012 while flagging Android gains at readers' expense. A separate study put the damage in starker terms, projecting e-reader shipments to fall 36% this year.
This eMarketer piece lands amid unusually wide pickup — Gizmodo, NYT Bits and Phone Arena all ran it within days — because it crystallizes a category question that had been open since Nielsen's 2011 finding that tablets and e-readers were settling into different rooms of the house (tablets as TV buddies, e-readers as bedfellows). The answer arriving with Q3 data: one device is absorbing the other's job.
First-order effects
- E-reader makers face a shrinking addressable market right as holiday buying peaks, since IDC's Q3 numbers show consumers choosing multipurpose tablets over single-function readers even as overall smart connected device demand grows.
- Retailers and publishers see their cheapest dedicated reading hardware lose shelf momentum heading into 2013, against IDC's forecast of 172.4M tablets shipping next year.
Second-order effects
- E-reader vendors are pushed toward price cuts or convergence — folding reading into cheaper tablets — to defend share, which compresses margins across the low end of the tablet market where they would compete.
- Publishers and ebook stores gain negotiating leverage as distribution consolidates around tablet ecosystems rather than proprietary reader hardware.
Third-order effects
- If the pattern holds, dedicated single-purpose devices get squeezed out of consumer electronics wherever a general-purpose screen can do the job at similar cost, leaving specialized hardware only where it offers something a tablet physically cannot.
- Market researchers' category boundaries blur — 'e-reader' and 'tablet' shipments merge into one connected-device market, making vendor-level comparisons the metric that matters instead of device class.
The trend: Consumer hardware is consolidating around multipurpose screens, with dedicated devices like e-readers surviving only as niches inside a tablet-dominated connected-device market.