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Summary:

Just last month, Forrester Research was sticking with its May forecast that sales of e-Readers would hit 2 million this year. Now it’s drama…

The Cool-er e-reader

Just last month, Forrester Research was sticking with its May forecast that sales of e-Readers would hit 2 million this year. Now it’s dramatically revising that estimate to 3 million units in 2009, predicting that 900,000 devices will be sold during the holiday season, that 40 percent of all sales will occur in Q4 — and that it’s one of the categories that “should” be a breakout. The update literally comes on the heels of the Amazon (NSDQ: AMZN) launch of a global English-language Kindle with wireless 3G access in more than 100 countries.

Forrester also sees sales doubling in 2010 — with about 10 million units sold overall by the end of 2010. That revised predictions are based on updated consumer survey data and interviews with people in the sales chain. Among the contributing factors, according to analyst Sarah Rotman Epps in a blog post: “falling device prices, more content availability, better retail distribution, and lots and lots of media buzz.”

And if that optimism doesn’t pan out? Blame the retailers, who have yet to figure out how to sell e-Readers. Epps: “The success of the holiday season, and next year’s growth, depends a lot on retailers and the extent to which they improve in-store merchandising for eReaders.” That means Forrester’s holiday projections “should be seen for what they are: An acknowledgment that 2009 has been and will be a year of breakout success for eReaders, tempered by realism that retailers, despite their best intentions, are still learning how to sell these products to curious but uninformed consumers.” Translation: don’t blame the forecaster if the projections fall short.

U.S. market share: *Amazon* comes out with nearly 60 percent of the market; Sony (NYSE: SNE), 35 percent; other device makers (Foxit, Interead, IRex) 5 percent.

Consumer awareness: Forty percent of US online consumers still say they

  1. As a former publishing CEO, I remain deeply skeptical of Forresters Research re: e-book sales. How do you square a reputed 2 million e-reader sales in 2009 with the fact that only 100,000 downloads of Dan Brown's new megabesteller have been registered to date, about 5% of total U.S. sales of the title? Why is Amazon so reluctant to reveal their Kindle numbers? When the numbers are good, you brag about them, as Steve Jobs so sagely reminds us. There may be a real problem of selection bias in how such research has been gathered, biasing the survey responses towards early adopters of a new technology (e-readers) and then extrapolating those results to the entire U.S. reading population.

    Believe me, I was an early champion of the E-Ink technology that underlies the new e-reader devices, but their penetration will be far more incremental, and their use far more supplemental, then these over-hyped surveys suggest. The recent 74% rejection-rate of Kindle textbooks vs. printed ones among Princeton students should be a cautionary reminder that the paper book remains a superior device for delivering long-form narrative, even among a tech-saavy group of college students.

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  2. Sarah Rotman Epps Thursday, October 8, 2009

    Thank you for the thoughtful analysis and comments. You're right, forecasting is a difficult mix of art and science, especially for emerging technologies.

    To clarify our methodology for estimating Amazon's numbers, we do use more than guesswork. It's a combination of our consumer survey data (e.g., how many consumers say they own an eReader and what brand they say they own), and supply-side data. Even though Amazon doesn't release its numbers publicly, the supply chain for eReaders is controlled by just a few companies, so by getting their numbers we have a pretty good idea of the maximum number of units Amazon could sell (if they sold every unit they ordered from their suppliers). We also look at data like the number of wholesale subscribers Sprint has added in the past year. In the case of Sony and other vendors who sell through retailers, we take their input into consideration, as well.

    As to why Amazon won't release its numbers, I think it's a combination of DX sales probably being unimpressive, and just the fact that they're an extremely secretive company.

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  3. Are these market share numbers still accurate? Hasn’t the Nook caught up yet?

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