As they evolve, e-books and their readers are potential bestsellers

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E-books still represent a small percentage of overall online book sales. But this could soon change, thanks to several recent and upcoming developments in this category. In a new report, How Big Is the Reader Opportunity, Forrester Research forecasts that the US market for e-readers will rise from 1 million to 2 million users in 2009.

Due out this summer, the Amazon Kindle DX is larger than its predecessors,making it better for reading content such as newspapers, periodicals and textbooks.

"Consumer choice is expanding, and price points will start to come down in this category, which will help drive the market," said Sarah Rotman Epps, analyst at Forrester.

Newcomer Plastic Logic and others are expected to launch e-readers designed to bring more newspaper readers into the category, said Sriram Peruvemba, VP of marketing at E Ink Corp., which manufactures the displays used by many e-readers and was acquired earlier this month by Taiwan's Prime View International for $215 million.

"Electronic newspapers have started to take off this year," said Peruvemba, adding that newspaper companies are very interested in this market as their print businesses erode. E Ink is working with Plastic Logic to bring a rugged, flexible display to market. "Newspapers get handled quite a bit, which is why it would be nice to have a rugged device so you could handle it almost like a print newspaper," Peruvemba explained.

Publisher Hearst also is launching an e-reader this year using E Ink technology. And, Google has joined the game, announcing that it will launch a program before the end of the year, allowing consumers to access digital versions of books via any Web-enabled device. Beyond the simple exposure factor that Google brings to the equation, the fact that e-books downloaded from Google can be read on any reader is significant. 

"The iPod and MP3 players are the hottest potential market for audio and digital books," said Gary Gabelhouse, CEO at Fairfield Research Inc., who predicts that the e-book market will evolve into an open system. 

Some of the other developments likely to drive up user rates in the category are still a while off. Color e-readers aren't expected until 2011 and full-frame video not until 2012. In the next year, devices will support animation for ads, but not video, according to Rotman Epps.

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