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Tips for assessing e-reader deals

Inexpensive readers abound, but few are bargains. What shoppers need to know.

By Karen Datko Jun 28, 2010 12:19PM

This Deal of the Day comes from Kelli B. Grant at partner site SmartMoney.

 

After a sudden competitive round of price cuts, e-readers are now as affordable as an iPod nano or an entry-level Blu-ray player -- that is to say, as cheap as $120.

 

Amazon.com dropped the price of its popular Kindle e-reader last week to $189 from $259, a change of 27%. The same day, Barnes & Noble introduced a new Wi-Fi-only version of its Nook reader for $149, and also slashed the price of its 3G-enabled version from $259 to $199. Borders continued the trend, sweetening the deal on its new Kobo reader by bundling the $149 device with a $20 store gift card and $10 in store rewards. It also recently began taking orders for the $120 Aluratek Libre, which will be available in late July.

 

The push to get devices into consumers' hands is more about the growing e-book market than the e-readers themselves. "It's a land grab, pure and simple," says Miro Copic, a professor of marketing at San Diego State University and the principal at BottomLine Marketing, a consulting firm. "They know down the line, their money is going to come from the content."

 

During 2009, e-book sales jumped 177% to $313 million, according to the Association of American Publishers -- and e-book retailers negotiated rates on each title to grab a portion of that revenue. The more people own a particular e-reader or use its free software on a cell phone, iPad or other portable device, the more e-book sales in that store's proprietary format are secured down the line, he says.

 

Manufacturers are also nervous about competition from tablet computers, notably the fast-selling iPad. (Apple announced last week that it sold more than 3 million of the devices during the first 80 days.) Market research firm Forrester Research predicts tablets will outnumber e-readers by 2012. A separate survey from electronics site Retrevo.com found that almost a third of consumers who are in the market for an e-reader say they now plan to purchase an iPad instead.

 

With prices now edging closer to the $150 mark, picking a reader -- or deciding to forgo one for a tablet -- is primarily about value. Here's what to consider:

 

Reading interest. In the tablet versus e-reader debate, avid readers will benefit most from a dedicated reading device (even if they end up with a tablet, too), says Andrew Eisner, director of content for Retrevo.com. Their large, electronic paper display (EPD) screens are more easily viewable in daylight than computer and cell phone LCD screens, and are also easier on the eyes for lengthy reading sessions in any light. The battery power is also superior. "These things last for weeks, not hours," he says.

Device capabilities. As price points drop, picking a reader becomes more about what the device is capable of compared with the attributes of similarly priced devices, says Ross Rubin, executive director of industry analysis for NPD Group, a market researcher. For example, $150 would buy either a Nook or a Kobo: The Nook has Wi-Fi connectivity, while the Kobo can only sync wirelessly with select smart phones. On the other hand, 3G connectivity adds to the cost but not the value for many buyers who will shop for new e-books from home, he says. (See our e-reader comparison chart here.)

 

Content. With vendors planning to profit from e-books down the line, consumers who want to digitize their library and use a reader for magazines and newspapers must consider both the cost and availability of content, Copic says. "When you miss a chunk of content, that can be a driver as well as price," he says. No matter the device, shop around for e-book stores that offer content in the free electronic publishing (EPUB) format, an open format that can be used with any reader. The Sony Reader Store, for example, made the switch last December.

 

Hands-on experience. Target began selling the Kindle in its stores nationwide earlier this month. The Nook is available at Best Buy and Barnes & Noble stores, and Borders is launching in-store displays for its readers. Buying in-store not only lets you get a feel for the device, it can include advantages such as more lenient return policies and extra rewards.

 

Emerging technology. Several more e-readers are set to come to market later this year, including the textbook-focused enTourage eDGe and the Kno, as well as the dual-screened Pixel Qi. Prices may drop further with the new additions, but only if there's enough interest that they become a serious competitor in the e-book space, Eisner says. Still, it may be worth the wait for consumers who don't see a natural fit with readers currently on the market.

 

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