Jason Perlow: Nook, Kindle and Other Dedicated eReaders Headed the Way of the Dinosaur

Writing on ZDNet, Jason Perlow foretells the mass extinction of the dedicated, unitasking eReader as a class of hardware, with the long-term market moving to the iPad, etc. and also inexpensive Android devices. A very interesting and informed analysis, which starts with a reference to this week's price-slashes for Kindles and Nooks:

Where is that bottom? I don’t know exactly, but I can tell you that it is very close to device manufacturing cost, which is somewhere between $90 and $125.

And unfortunately, Amazon and Barnes & Noble will be unable to sustain a business on the devices when it hits that low, because the price of the most important and expensive component of those Black & White e-ink readers, the Vizplex display, is controlled by a company that exclusively manufactures and owns the rights to the electrophoretic technology used in these devices, E Ink Corporation.

The “give away the razors and sell the blades” model doesn’t work with dedicated e-book readers because Amazon and Barnes & Noble’s customer base is increasingly becoming iPad and iPhone users, and shortly will also be Android phone and tablet users.

In which case, there’s no reason to sell “razors” at all, especially since Android Tablets will be made out of commodity parts, will use cheap LCD display technology and will be far more capable, and many will be priced in the $200-$300 range and well within striking distance of the current price of dedicated e-readers.

Indeed, e-ink may be superior for daytime reading, and at least for the time being, the hardcore reader types, most of which are Boomers, will go out and buy Kindles and Nooks for their content consumption this summer at the beach.

But the Millennials will only be interested in their iPhones, iPads and Droids, with brilliant and sharp color displays, and the App versions of these e-book stores will suit most of these people fine, at least for the remaining ones that still like to read books.

In the next year Vizplex e-Ink will almost certainly be revved to color technology, but for the dedicated reading device, it will be too late.

By then, different competing high-performance transflective LCD displays will be on the scene, manufactured in huge volumes ...