Kindle Economics #2 – Credit Suisse Issues Optimistic Report on eReaders

Financial services company Credit Suisse has issued a report that predicts eReader ownership by one third of adult book readers within 5 years.  This would be a huge jump from their estimate that only 1% of the target market owned eReaders in 2008.  It should be noted that this report is specific to the US.  Also, the target demographic of literary adults that Credit Suisse is referring to consists of 42% of Americans 15 or older.

Amazon in particular is predicted to do well.  Credit Suisse believes the number of Kindles sold each year will skyrocket, until Amazon is selling 8.5 million a year in 2014 (equaling $1.8 Billion in revenue).  As the report seems to have been completed before the recent news about Barnes and Noble’s upcoming eBook store, there’s no prediction as to how they may make a dent in Amazon’s profits.  Credit Suisse has, however, jumped on the Apple tablet speculation bandwagon and suggested that it would have a major effect on the eReader market.  I’m not sure if I agree with that analysis, as a tablet computer and an eReader aren’t really the same thing. People use eReaders because they simulate a normal paper reading experience, not because they want a full out computer. We’ll have to wait for it come out as Apple has a way of creating surprisingly usable revolutionary devices (iPhone being the most recent example).

Overall, there’s nothing too surprising about Credit Suisse’s report.  At this point, I think everyone expects eReaders to be poised to take over the publishing industry.  What’s incredible is how fast Credit Suisse expects it to happen.  One third of the market in 5 years?  An adoption rate like that is equal to a full out revolution in the way people look at books.