Apple gears up to bite into the e-reader market with iPad

The iconic touchscreen tablet PC Apple iPad 1 has shed its price by Rs 3,400 within five weeks of launch in India. The Cupertino-based Apple unveiled its latest version of iPad in the US earlier this month. Maintaining its value-price leader position in the domestic market, the iPad is now making competitors, including players in the e-reader market, uncomfortable. At present, Samsung and Olive Telecom have launched tablet PCs and a clutch of device makers, including Research in Motion, Acer and Motorola, will do so in the next couple of months.

Estimates by analysts suggest the e-reader market in India in not more than a few thousand units annually. On the other hand, tablet PCs are set to overstep 1 million units by the end of 2011. Industry experts believe e-readers with black-and-white displays could drop prices to hit Rs 5,000-7,000 in 2011.

DisplayResearch surveys predict that tablet computers will cannibalise netbook, e-readers and even notebook sales this year. By allowing users to read magazines, books and newspaper through apps like iBookstore and Amazon e-book store, and carry out other tasks, iPad is proving to be a hit with users like Rishi Tej Singh. The theatre artist and model was gifted an Amazon Kindle and recently bought an iPad 1. “When I started reading on Kindle, it was simple and satisfying. But while reading books on my iPad, if I have to find the meaning of a word or have an urgent email to send, I can use the same tablet device and return to my e-book,” he says. Asheesh Raina, principal research analyst at Gartner feels, “New owners of iPads are likely to use the iBookstore and its e-reader features more at first, but as they gain experience and sample the virtues of e-books, they may migrate more to pure-play e-reading devices.” He agrees there’s a niche market for dedicated e-readers but Indian consumers will take two to three years to figure out that a tablet PC is more practical for browsing digital literature than dedicated devices.

Sandip Biswas, director, Deloitte Touche Tohmatsu India, says: “We believe tablet PCs will be initially consumed by 30-35 per cent of laptop owners in India. While dedicated e-readers are set to get cheaper, smaller and faster, the tablet PCs will probably also get better but not much cheaper.”

Android-based tablet PCs are supported by Google’s e-book storefront, while Windows-based tablet PCs can download e-books from Amazon’s virtual store or via apps developed by third-party developers. “Tablet PCs, due to their LCD display screens, are not made for serious book lovers. Instead, they are most likely to please those looking for reading material for either reference or entertainment,” emphasises Das of Deloitte.

Meanwhile, analyst Stephanie Ethier from In-Stat says, “In the short term, though, I don’t see the iPad demolishing Amazon Kindle sales. Today’s e-reader customers are looking primarily for a seamless e-book discovery+purchase+download experience. In other words, they’re buying Kindles to read. Sure, the current generation of e-readers can support a number of other functions, like personal information management and other computing functions, but fundamentally, customers are purchasing Kindles and Sony e-readers for a revolutionary reading experience.” Yet, a consumer survey done by ChangeWave suggests the Apple iPad is “becoming a truly convergent device”, with 48 per cent users watching videos, 33 per cent reading books, 29 per cent playing games and 28 per cent reading newspapers and magazines on it.

Even with a deluge of new device offerings, tablet PCs look unlikely to become mass market by 2011, according to analyst estimates. That’s where local players like Infibeam – which has its own e-readers starting at Rs 9,999 – are hoping to win buyers over. Vishal Mehta, CEO and founder of Infibeam, says, “The biggest benefit that e-readers can deliver is support for local Indian languages and that’s what we did with Infibeam Pi e-reader. We have also introduced Phi, a touchscreen media tablet priced at Rs 14,999, targeting education and bollywood content for consumers.” Infibeam is betting on Penguin, McGraw Hill and Pearson to offer users a huge selection of e-books.

Online e-commerce site like Flipkart, which is hopeful of clocking revenues of about Rs 80 crore by March 2011, is already planning for an app for e-books users. Sachin Bansal, CEO & co-founder of Flipkart.com, says, “A Flipkart app is in the pipeline, for books and other product categories (mobiles, games, movies, music and electronics). We will know in due course whether it’s on Apple or Android platform.” Bansal admits e-readers are unbeatable in the advantages they offer when it comes solely to ebooks. “They are designed and engineered for a specific purpose, and they offer fantastic usability. That said, eBook readers are yet at a very nascent stage,” Bansal concludes.