New Forrester Report: The eReader Price Squeeze

A new Forrester report on the eReader market just went live (clients can access the full version here).

In brief: We surveyed 4,706 US consumers in an online survey to find out what value they place on eReader devices. We used a Van Westendorp Price Sensitivity Meter methodology to ask consumers four open-ended questions:

  • At what price would you consider an electronic book device/eBook reader a bargain?
  • At what price would you consider an electronic book device/eBook reader expensive but still purchase it?
  • What price would be so inexpensive that you would question the quality of an electronic book device/eBook reader?
  • What price would be so expensive that you would not consider buying an electronic book device/eBook reader?

We plot all the data and to find the optimal price range for different segments of consumers--what price you'd have to charge for the device to get the maximum number of consumers buying an eReader.

What we found was that the price points for how most consumers value eReaders is shockingly low--for most segments, between $50 and $99. (Currently, eReaders in the US are priced between $199 for the Sony Pocket Reader and $489 for the Kindle DX.)

Here you can see the breakdown for how different segments of consumers answered the question, "At what price would you consider an electronic book device/eBook reader expensive but still purchase it?":

Forrester_eReader price graphic

Of the 181 million US consumers who are online, 14%, or 25 million consumers, say that eReaders priced at $199 or higher — the current price range for eReaders — are expensive but they'd still consider them for purchase at that price point.

What this means: The maximum addressable market for eReaders as they are currently priced is substantial--but to reach the largest market possible, the prices will need to come way down. And even then, eReader are never going to be as big a market as mp3 players, which 110 million US consumers own.

But they will still have phenomenal social and economic impact as they catalyze a new behavior of digital reading across multiple devices. We're just at the beginning of this revolution...

Comments

Great survey

Relative to those who would buy an eReader device, we found in our survey that the quality can really make a difference to folks. In our case the study was about dedicated eBook Readers and legibility of the text on the screen.
http://blog.fonts.com/archives/662
The bottom line was that folks would pay more $ for a higher quality (more legible) eReader device.
Dave

re: New Forrester Report: The eReader Price Squeeze

Great info. I've submitted a briefing request to speak to you about this market.

re: New Forrester Report: The eReader Price Squeeze

Very helpful informative survey. We design and manufacture eReader, and very interested in all information related to this topic.