September 23, 2009 Best Buy and Verizon Jump Into E-Reader Fray By BRAD STONE NY Times
http://www.nytimes.com/2009/09/23/technology/internet/23ebooks.html?ref=business&pagewanted=print The budding market for electronic reading devices is about to get two powerful new entrants: Best Buy and Verizon. On Wednesday, iRex Technologies, a spinoff of Royal Philips Electronics that already makes one of Europe’s best-known e-readers, plans to announce that it is entering the United States market with a $399 touch-screen e-reader. Owners of the new iRex DR800SG will be able to buy digital books and newspapers wirelessly over the 3G network of Verizon, which is joining AT&T and Sprint in supporting such devices. And by next month, the iRex will be sold at a few hundred Best Buy stores, along with the Sony Reader and similar products. By all accounts, e-readers are set to have a breakout year. Slightly more than one million of them were sold globally in 2008, according to the market research firm iSuppli. The firm predicts that 5.2 million will be sold this year, more than half of them in North America, driven by the popularity and promotion of the Kindle, which is available only through Amazon’s Web site. Best Buy’s involvement could give an additional lift to sales. Starting this week, Best Buy is training thousands of its employees in how to talk about and demonstrate devices like the Sony Reader and iRex, and adding a new area to its 1,048 stores to showcase the devices. Best Buy previously sold e-book devices only on its Web site and in limited tests in stores. “The e-reader has high awareness, but most people have still not seen or touched or played with them,” said Chris Homeister, senior vice president for entertainment at Best Buy. “We feel that this is a technology that is beginning to emerge and that we can bring a unique experience to the marketplace.” The biggest challenge for iRex, in particular, will be the unfamiliarity of its brand among American consumers. But in many respects, its black-and-gray device is similar to rivals like the Kindle DX, which has a 10-inch screen and costs $489, and the forthcoming Reader Daily Edition, with its 7-inch screen and $399 price tag, from Sony. The iRex has an 8.1-inch touch screen and links directly to buy digital books in Barnes & Noble’s e-bookstore and periodicals from Newspapers Direct, a service that offers more than 1,100 papers and presents them onscreen largely as they appear in print form. This year, iRex talked with Barnes & Noble about putting the bookseller’s brand, and not its own, on the new device. But they could not reach an agreement, said Kevin Hamilton, the chief executive of iRex’s North American division and president at Amerivon Retail Sales, a venture capital firm that led an $8 million investment in the company this year. William Lynch, president of Barnes & Noble’s online business, declined to say whether the bookseller was working on its own reading device, but said it “planned to market digital books in really big and interesting ways” to the 77 million customers who walk into its stores every year. The Barnes & Noble e-bookstore will also be available through a large-screen device from the start-up Plastic Logic, which is expected next year. IRex has taken a somewhat circuitous path to the consumer market. As a division within Philips, the Dutch electronics company, it was responsible for supplying the screen technology for the Sony Librie, one of the first devices to use so-called e-paper, which mimics the appearance of regular paper on a digital screen. As a separate company since 2004, it has developed large-screen devices for business professionals, doctors and pilots, mostly in Europe. Its new consumer product offers some techie features that rivals do not. It contains a 3G Gobi radio from Qualcomm, the wireless component manufacturer, which will allow iRex owners to buy books wirelessly when they travel abroad. By contrast, the wireless modem in the Kindle works only on Sprint’s network in the United States. As with the Kindle, the price of the iRex includes unlimited wireless access. The iRex can also handle the ePub file format, a widely accepted industry standard, which means that owners can buy books from other online bookstores that use ePub and transfer texts onto the iRex. IRex says it is on track to have a color version of the device by 2011, something that other vendors, which rely on technology from eInk, a subsidiary of Prime View International of Taiwan, say is years away. One challenge for the entire digital reading market is the price of these new devices. A recent report from Forrester Research suggests most consumers will buy a digital reading device only when they cost less than $100. One way this could ultimately happen is if wireless providers like Verizon subsidize the devices and sell them in their stores, as they do with the inexpensive laptops called netbooks. Verizon says it has no plans to do this, but analysts think that could conceivably change if e-readers like the iRex sell well. “If this becomes a revenue stream for a company like Verizon, which actually gets paid for the bandwidth required to distribute content, then it is in Verizon’s benefit to promote these devices and in many cases underwrite them,” said Allen Weiner, an analyst at Gartner. But Mr. Weiner also says that first, iRex, Amazon and the entire e-reading category have an even more significant problem: savvy consumers may hold off on buying devices to see whether Apple enters the market with a more general-purpose tablet computer. -- ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 Mail: antunes at uh dot edu *********************************** * POST TO MEDIANEWS@ETSKYWARN.NET * *********************************** Medianews mailing list Medianews@etskywarn.net http://lists.etskywarn.net/mailman/listinfo/medianews
