Netbooks: Plague to e-readers?

I’ve blogged a lot — and will blog more — about the next generation of e-readers and how newspapers are salivating at the prospects of a device that could help change their revenue model and lead them back to a path of profitability.

But if there’s one thing we know about technology, it is that it constantly changes, and that change brings disruption. So as Plastic Logic, Fujitsu, First Paper and IRex get ready to release these large screen (8 1/2 by 11)  and newspaper friendly devices, there’s a nemisis right around the corner that could derail everyone’s plans.

Netbooks are here, and they’re loaded for bear.  Sales jumped in 2008 and slowed in Q1 2009, though I think that slowdown in sales can be linked to the global recession. Netbooks are very light — generally under 3 pounds — and very cheap — under $300, or sometimes much less if tied to a cellular phone contract.

The new e-readers? Right now, they are simply promises. Plastic Logic and First Paper each promise devices with larger screens that will display newspaper and magazine content better than Amazon’s Kindle. But neither have a firm date on when those devices will be available. Plastic Logic, which has signed trial agreements with Detroit newspapers and USAToday,  plans to make an announcement in January 2010. Kindle, seeing the competition, announced it’s coming out with its own larger screen version in Q4 2009.

But here’s the potential problem with the e-readers: Cost. Netbooks can be had for as little as $99. Fujitsu costs $1,000 US; IRex costs almost $900. The early Kindle versions are about $359, and there’s no word on how much the Plastic Logic or First Paper products will cost.

So here’s the challenge: Why would a suddenly cost-conscience public, battered by the worst economy since the 1930s, spend, potentially, more money on an e-reader when they can get the same — or more — with a netbook?

Stay tuned. This is going to get very interesting.


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