• by Mark Walsh  @markfwal, August 7, 2009

With the success of Amazon's Kindle reigniting competition in the e-reader market, the question of when the devices might join cell phones and digital cameras as mainstream consumer gadgets is once again raised. Findings from a new NPD Group report suggest it won't be overnight.

The study found that 40% of those surveyed were only "somewhat interested" or "not interested at all" in buying an e-reader. How come? Of those who don't want one, 70% said it was because they prefer the feel of an actual book.

Among the 37% who were either "very" or "somewhat" interested in obtaining an e-reader, one of the main factors was the ability to buy and store multiple books, magazines, and newspapers. More than half of consumers were interested in features already offered in current devices like the Kindle's wireless capability and the Sony's Reader's touchscreen.

"Today's e-reader offerings are delivering capabilities that are in demand by consumers," said Ross Rubin, director of industry analysis at NPD, in a statement. "However, some features that could enhance the appeal of more popular content, such as color, remain on the drawing board."

Sales of the Kindle have been difficult to pin down since Amazon has not provided figures, but Citi analyst Mark Mahaney has projected that the second-generation of the device could sell up to 1 million units in 2009. That would be more than double the estimated 400,000 the original sold. Last month, Amazon cut the price of the Kindle 2 from $359 to $299 in a bid to accelerate adoption.

Upping the ante, Sony on Tuesday introduced two new versions of its Reader: a $199 pocket edition and a larger $299 model with an improved touchscreen. It also dropped the price of new releases and bestsellers from $11.99 to $9.99, matching Amazon's e-book pricing.

In an interview Thursday, Rubin said price wasn't the biggest barrier to buying e-readers cited in the NPD survey, "but lowering the entry price will help spur demand." He also pointed out that people expressed a greater interest in accessing newspapers and magazines on e-readers than books. That could be a promising sign for the larger-screen Kindle DX, designed for reading publications other than books.

"But these beg for technologies that are not commercially viable today, such as flexible displays and color electronic ink," noted Rubin. But heightened competition should help to encourage innovation as well as drive down prices. Barnes & Noble last month announced it would partner launch its own e-bookstore with bestsellers priced at $9.99. The book chain has also entered into a partnership with Plastic Logic to supply content for its e-reader due out early next year.

A separate study last week from Forrester Research suggests Amazon could be vulnerable if competitors can better serve subsequent waves of e-reader adopters. The report indicates that unlike the mostly male, tech-savvy Kindle buyers so far, future prospects for e-readers are more likely to be female, less tech-optimistic, and big readers (five books a month on average). So it sounds like whichever company can win over women will end up winning the e-reader race.