E-readers were on display at in the Chinese pavilion at the Book Fair in Frankfurt
As makers of electronic-book readers jockey for position in the U.S., Japan and Europe, a similar but more challenging effort is unfolding in China. World-wide, about four million electronic-book reading devices were sold last year. The number is expected to jump to 12 million in 2010 and 18 million in 2012, predicts the U.S.-based market intelligence firm iSuppli Corp.
China is forecast to see e-reader sales jump from 800,000 in 2009 to three million in 2010, making up of 20% of the global market, according to a recent report by research firm DisplaySearch. The company goes on to forecast that China will surpass the U.S. to become the world’s largest e-reader market before 2015, by virtue of its large population.
“It’s still too early to talk about the market scale, but the China market is a highly potential one due to the large user base,” said Zhang Yanan, an analyst from Beijing-based research firm Analysys International.
But the China market faces considerable challenges. Most e-readers there—manufactured mainly by local players—can get expensive for the average Chinese consumer. While bare-bones models can be had for less than 1,000 yuan (about $150), in some cases more-advanced models with handwriting recognition, card readers, WiFi access and greater access to online libraries can cost as much as 3,000 yuan.
By contrast, in the U.S., Amazon.com Inc.’s Kindle reader and Barnes & Noble Inc.’s Nook are $260, while Sony Corp.”s smallest e-book reader is $200.
Amazon sells books in China through its Amazon.cn site but it doesn’t offer its Kindle reader in China. Nor does Sony sell its device there. Piracy and revenue-sharing issues make China a daunting market for outside companies in the industry. Also, Beijing has strict regulations and licensing process on e-businesses, said You Yunting, a copyright lawyer in Shanghai.
A lack of content plagues China’s e-reader makers. The rampant piracy makes providing content a difficult business. According to the China E-Book Market Development Report, jointly released by Chinese e-book portal du8.com and industry tracker CBBR, 95% of China’s digital readers download unauthorized works from the Web.
“Publishers are reluctant to work with [makers of e-book readers] due to the current situation of intellectual-property protection in China, and the online payment awareness level among Chinese digital readers is still pretty low,” said Ms. Zhang of Analysys International.
With content still lacking in China, some manufacturers load up the devices with books, at added cost. E-book content sales in China remains small—totaling just 226 million yuan, or about $33 million, as of the end of 2008, according to the China E-Book Market Development Report.
Amazon and Barnes & Noble boast of having hundreds of thousands of e-book titles available to download in the U.S., most for $9.99, but the companies don’t disclose their e-book sales.
In China, local manufacturers dominate the market for e-book readers and more are expected to pile in.
Article continues below
Beijing-based Hanwang Science & Technology Co. is No. 1 by sales, according to Analysys, and sold 200,000 e-readers since its September 2008 debut. It sold about 500,000 units last year and expects to sell more than two million in 2010.
In September, Hanwang Science released a 3G e-reader capable of connecting with China Mobile Ltd.’s network, a feature that enables users to access the Internet to download books. Users can write Chinese characters on the e-reader screen with an electronic stylus, said Liu Yingjian, founder and chairman on Hanwang.
“More competitors are going to the e-reader market, and I figure that there will be 50 to 100 players competing in 2010. But we are very confident of being No.1 in the market,” Mr. Liu said.
China Mobile is also working with contract manufacturers including Datang Telecom Technology Co. and Hon Hai Precision Industry Co. to produce e-readers devices.
Hanwang pre-installs a number of books into its e-readers, mostly classics and booklets of historical works. The company also runs its own online library, Hanwang Library, but it has only 30,000 books available for download at present. To broaden its base, Hanwang gives its e-readers the ability to support a large number of e-book formats, so users can buy books from a range of suppliers.
Hanwang is also working closely with publishers at home and abroad to expand its online library. In November, Hanwang said its plan to offer 80% of revenue to content providers to attract copyright owners.
In October, Beijing’s Founder Group Inc., which offers Chinese e-books online, launched its branded e-reader product called WeFound.
The Kindle-like reader includes a cellular connection and incorporates Founder’s own e-book software. Company officials, who say they developed their reader independently of the Kindle, expect to sell up to one million of the devices in 2010. Founder Group also says it plans to expand its online store.
Founder Group’s Apabi e-book subsidiary launched an e-book site together with search site Zhongsou.com, aiming to build world’s largest online library of Chinese books. Founder’s WeFound reader, at 4,800 yuan, is expensive even by Western standards, but the price includes a three-year service package with Internet access and access to its Apabi’s library of 600,000 book titles, plus daily news updates.