Sony on the E-Reader (R)evolution

E-reader sales are small today, but they are growing fast. According to Taiwan-based Market Intelligence & Consulting Institute (MIC), they will jump from just over 3 million units in 2009 to nearly 20 million in 2013, with revenues approaching $4.2 billion worldwide.

The e-reader audience is likewise in a state of evolution. Mediamark Research & Intelligence’s Fall 2009 “Survey of the American Consumer” shed some light on the US audience of approximately 2.1 million consumers with e-readers. They tend to be:

• Wealthy. Owners of e-readers are 87% more likely than the average US adult to have annual household incomes of $100,000 or more and 11% more likely to own their own home.
• Highly educated. They are 111% more likely than average to a have a college or postgraduate degree.
• Tech-savvy. They are 199% more likely than average to have accessed the Internet outside their homes via either Wi-Fi or a wireless data connection in the past 30 days, 154% more likely to have gone online with a mobile device in the past month and 116% more likely to be a heavy Internet user.

I recently chatted with Phil Lubell, vice president of Sony’s digital reading business division, about how the consumer electronics giant approaches the fast-moving e-reader market. Here’s a clip from the full interview available on eMarketer Total Access:

eMarketer: How do you see the e-reader market evolving?

Phil Lubell: We obviously are really excited about this business. We’ve seen it grow significantly just in this past year alone and we think there’s a big opportunity for digital reading over the next couple of years.

Sony is in a good place in the market. We start with our open price point Pocket Edition at $199, then step up to the Touch Edition for $299. We also have the Daily Edition at $399. From our experience, we understand that the three products meet different expectations for different market segments, and with our portfolio of products, they actually attach to very different customers. On top of that, we make the Pocket and the Touch editions in colors.

eMarketer: Speaking of color, when do you see color coming to the screens for the readers themselves?

Mr. Lubell: The key thing is the user interaction with the screen. Right now, E Ink technology provides the best experience for the consumer, so it’s going to take some time for that technology to evolve. Battery life comes into consideration, too—color screens cause additional battery drain. It all gets back to the customer experience and having a consistently charged device.

The importance of the user experience was one of the points to which Mr. Lubell returned on several occasions throughout our discussion, highlighting a trademark of the Sony design and marketing philosophy. For example, when asked about e-reader pricing, Mr. Lubell boiled down Sony’s approach as follows:

It’s not so much price as what’s the value for the customer. This is, quite frankly, the philosophy for any product: If you give consumers good reasons, they’ll spend the money.

My upcoming “Always-On Devices and Networks” report will offer an in-depth look into the burgeoning e-reader market as well as an outlook on other portable content access platforms, including netbooks, media players and gaming devices. Look for the report later this week.