Amazon Is Undermining the E-Reader Market It Created

The tablet market has taken off, and it appears to mark the beginning of the end of dedicated e-book readers like Amazon’s Kindle. IHS iSuppli, a market research firm, expects around 15 million e-book readers to be shipped this year, down nearly 40 percent from last year. “I’ve never really seen anything quite like this. In the world of consumer electronics, things appear and disappear quite rapidly, but never really as meteoric as the e-reader market is,” says Jordan Selburn, the author of the IHS iSuppli report.

Last year it seemed that the market might be big enough for both dedicated e-readers and tablets, which cost more but offer e-books, among many other features. E-reader sales rose in 2011 even as tablet sales jumped sevenfold. But now it appears the versatility of tablets is winning out. “People want to do other things on their devices besides read books,” says Selburn.

The popularity of tablets forced Amazon, by far the dominant seller of dedicated e-book readers, to cut into Kindle reader sales by offering its own tablet, the Kindle Fire. “If Amazon doesn’t sell tablets and cannibalize Kindle readers, someone else will,” Selburn says.