What Is It About e-Readers?

Kindle2(11)Best Buy, along with e-reader maker iRex said today they will launch an e-reader that will run on wireless access provided by Verizon and retail for $399. The announcement comes on the heels of a similar one from Barnes & Noble and another one from Sony, both of which will see their devices wirelessly enabled by AT&T.

But what is it about e-readers? If I were to bet on a device that would benefit most from wireless access, it wouldn’t be a digital book reader, not in a nation where roughly half the people don’t read novels. A personal navigation device, an MP3 player on which one can download songs, even a handheld gaming unit all seem to be more popular with consumers — and offer better opportunities to show off wireless access. So why the focus on e-readers?

First we have to look at the carriers, which up until recently were reluctant to sell access on their wholesale networks for consumer devices. That changed, however, when Sprint decided to support Amazon’s Kindle. Suddenly (thanks in large part to the marketing push made by Amazon) carriers (and consumers) wanted connectivity on e-readers. The only other consumer device that comes close to combining a standalone gadget (a music player) with wireless access is the iPhone.

And because those in the consumer gadget market can sometimes be reluctant to innovate, the success of the Kindle has prompted both device makers and carriers to bet on the e-reader model. Sure, only 1 million of the devices were sold in 2008, according to iSuppli, and only 5.2 million are expected to be sold this year, but like lemmings, gadget makers will follow successful trends off a cliff. Look at the amazing number of touchscreen phones released after the iPhone.

So while we’re about to be awash in e-readers, what other consumer devices with embedded wireless connectivity can we expect? Dash Navigation with its personal navigation system and a $15 monthly subscription wasn’t a success, but I think it was the subscription, not the connectivity on a personal navigation device, that was the issue. Indeed, carriers need to think carefully about their pricing models for wireless access, perhaps relegating monthly subscription charges to the dustbin. Pricing wireless service into the cost of content as is done on the Kindle, or possibly having a consumer buy a prepaid card that allows them to download a certain number of songs or send a certain number of photos from a wirelessly enabled camera probably makes more sense.

Readers, what devices do you think carriers and consumer electronics makers will connect next?

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