WitsView: Market growth of reflective electronic reading device hinges on content expansion and market segmentation
The advent of Apple iPad significantly attracted global attention to the electronic reading device market. According to WitsView, an industry research institute, market scale of mainstream reflective electronic reading device (e-readers) is estimated at 7.5 million units in 2010. To accelerate its future penetration rate, vendors will have to offer more versatile marketing strategies.
WitsView added, although the e-reader offers the comfort of reading for extended periods and long standby time, but compared to other products that adopt TFT displays, such as the iPad, the drawback is that color images and photographs are not ideally viewable in its monochrome display. Furthermore, compared to other consumer electronics with clear market positioning, such as TV (for program viewing) and mobile handsets (for mobile communication), both of the e-reader’s primary reading function and its secondary audio function can be easily replaced by other products. In summary, the uniqueness and the appeal of the e-reader hardware are highly limited; therefore, focusing solely on its functions will not promote its popularity.
From the perspective of its price position, currently, the 9.7" e-reader is priced at over $400, which does not offer a high price-competitiveness compared to the iPad, which is priced at $499. Although 5" reflective display products will be launched to compete in the $200 and below market, but the appeal of a product which focuses solely on electronic reading is highly limited. WitsView indicated that popularization of the e-reader is not determined by its price position alone; rather, it hinges on content expansion and market segmentation.
Eric Chiou, WitsView’s research manager, pointed out that adding more soft reading content will expand the potential e-reader consumer base. In addition, as the e-reader market is a content-oriented market, the initial hardware purchase is only a once-off spending, subsequent sales of e-books and other reading content is the key to generating revenues in the long run. Due to this characteristic, Chiou recommended that e-book vendors follow the selling strategy of mobile communication providers that offer subsidies on handsets, that is, offering the e-reader at a low-price or even for free, and bundling it with a certain amount of spending on content. This strategy enhances consumer loyalty through repeat purchase.
As for market segmentation, Chiou believes that the metropolitan population and the educational market are the two main target segments for e-readers. Metropolitan areas are heavily populated with well-educated heavy commuters; therefore, the e-reader is ideally-suited for reading during the long commute. There are also advantages in targeting the educational market – partly because this is a market that is least affected by fluctuations in the economy, and also it helps the next generation to form the user habit at a young age, as they may develop into potential users in the long run.
For the widespread adoption of reflective e-readers into the modern lifestyle of consumers, in addition to promoting through the viral marketing approach, that is, expanding the customer base from the core users, and gradually changing consumers’ preference in reading papers, easily affordable hardware and enriched reading content are all crucial factors to the success of its development.
