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December 13, 2012

Multi-Purpose Devices Beats Single Use Every Time

By Doug Mohney, Contributing Editor

E-books are the latest single purpose device getting driven out of existence by multi-functional devices, joining feature phones, MP3 players and PDAs on the tech trivia scrap heap. A report from IHS (News - Alert) iSuppli says the eBook reader marketing is on an "alarmingly precipitous decline" due to the rise of tablets.

"Ebook Readers: Devices to Go the Way of Dinosaurs?" states shipments of the devices will fall to 14.9 million units in 2012, a 36 percent drop from 23.2 million units that appear to be the market peak in 2011. Things only are forecast to get more dismal by 2013, with shipments predicted to decline to 10.9 million units. By 2016, the eBook reader space will be down to 7.1 million units, a loss of more than two thirds the peak volume of sales in 2011.

IHS iSuppli says the stunning rise and fall of the eBook market is "virtually unheard of" in the consumer electronics space, coming from nowhere in 2006 and growing from one million to 10.1 million units shipped between 2010, a factor of ten in just two years.

Pushing out the eBook are tablets, more expensive but much more flexible devices. Appearing in 2010 with the arrival of the Apple (News - Alert) iPad, tablet shipments are expected to hit 120 million units at the end of this year with at least 340 millions expected to be shipped in 2016. IHS thinks ultra-low cost pricing may prolong the life of the eBook reader market, but it won't regain the popularity it saw in 2011.

Alas, do not mourn the eBook reader. Its fate was perhaps preordained to follow that of the PDA, MP3 players and feature phones with the arrival of the more expensive but multi-functioning smartphone. For a brief shining moment, PDAs were hot items, serving as the combination of an address book, notepad, and calculator. Similarly, everyone had to have an MP3 player, such as an Apple iPod.

Smartphones enabled consumers to consolidate to a single device containing phone, media playing, address book, plus adding Web browsing, games, camera/video and GPS capabilities, not to mention the all important "app" to add new capabilities as programmers dream them up.

On the endangered species list are dedicated consumer GPS devices, potentially followed by single-use digital cameras and perhaps dedicated game consoles.   With smartphones incorporating GPS functionality and tapping into Wi-Fi for greater precision location, the stand alone GPS lacks a seamless way to tie into rolling map updates and applications. Cameras will likely have some legs left as they incorporate GPS to location-stamp pictures and network connection via Wi-Fi and cellular to upload pictures for backup and sharing; it's also going to take some time to get a decent zoom lens packaged into a smartphone.

Dedicated game consoles have three things in their corner – dedicated user interface (buttons), plenty of titles, and manufacturing money to keep them refreshed and relevant. Buttons are likely to trump multi-touch in the short term.

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