So far, Amazon (NSDQ: AMZN) has dominated the nascent e-reader market (Just look at the attention being given to the company’s seemingly minute announcement today that the next version of the Kindle — the DX — will come out on June 10). But a report out from Forrester this morning identifies several openings for the Kindle’s growing roster of competitors:
— Cost: Forrester expects that by late next year there will be an e-reader on the market for $199 in the U.S., far below the $489 that Amazon is charging for the DX or the $359 it charges for the Kindle 2. “Some publishers, especially newspapers that need to cut costly print operations, may find it desirable to subsidize the cost of the devices to catalyze device adoption and salvage some of their subscription and advertising revenues as they sunset print products,” writes analyst Sarah Rotman Epps.
— International sales: Epps notes that Amazon is weak outside the United States, unlike competitors like Sony (NYSE: SNE) and iRex.
— Publisher relationships: While the Kindle gives publishers a new way to distribute their content, Amazon also takes a steep cut of revenue and also forbids publishers from displaying ads. “Other vendors will create more productive relationships with publishers, giving publishers more control over the way their content is displayed and priced and enabling ad serving,” Forrester expects.
— Features: Forrester notes the lack of video, touchscreen capability, note-taking, color, and sharing capabilities on the Kindle — all features the firm expects competitors to embrace.
Indeed, the report lists at least a dozen potential new entrants to the category — from new device manufacturers to potential content distributors — which will compete with Amazon. (The latest player is Google (NSDQ: GOOG), which plans to enter the e-book business this year). At the same time, Forrester expects the market to only grow. Textbooks, for instance, will be a “killer app” on e-readers, because of their traditionally high cost. And starting in 2013 the market might move into business documents, Forrester says.
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