New E-Reader Set to Rock Digital Book Market

iRex eReader
Click on the graphic for a larger view. Source: iRex

A new e-reader backed by Verizon, Barnes & Noble and Qualcomm is getting ready to take on the leaders Amazon and Sony in the budding e-reader market.

The iRex DR800SG, due out next month, sports several features the popular Amazon (NASDAQ: AMZN) Kindle doesn’t: an 8.1-inch touchscreen, the ability to connect to the Internet overseas and support for open digital book formats. The manufacturer, iRex Technologies, already sells a popular e-reader in European markets,

“People want an enjoyable, easy reading experience with no-hassle access to content. Our strategy — based on giving consumers choice — and the partnerships we have in place make it easier for them to purchase a device, access content and enjoy it wherever they are,” Kevin Hamilton, North American CEO of iRex Technologies, said in a statement.

“With the DR800SG, we bring to market all that readers have been asking for: a stellar device that puts the reader in the driver seat with regard to where they buy content and what they do with it.”

For stateside wireless Internet access, the iRex device will use Verizon’s 3G network, but it will also leverage a Gobi multi-mode 3G embedded module containing Qualcomm’s mobile broadband technology that supports global connections. The Kindle’s wireless modem only works on the Sprint U.S. network.

The iRex e-reader, priced at $399, will be sold at Best Buy stores next month and through a partnership with B&N (NYSE:BKS), will link to the book chain’s e-bookstore. It will also support NewspaperDirect’s PressReader software, which provides some 1,000 newspapers and magazines in digital format.

“Unlike Amazon’s Kindle, which offers limited Web site content from only 58 titles, PressReader allows users to download over 1,000 full-content newspapers in their original format, with all the articles, pictures, cartoons and advertisements found in the printed editions. This ensures that all 1,000 publications on the iRex are recognized as audited paid circulation by international audit bureaus, a critical factor for publishers looking to increase revenues and reach,” says a statement at the NewspaperDirect Web site.

Another difference between iRex and Amazon’s Kindle: the DR800SG device also supports the industry standard EPUB file format, which means readers can buy books from other stores using EPUB and transfer the content to the iRex.

Contrasting approaches

“The iRex supports multiple formats, including the industry standard EPUB and multiple DRM solutions, rather than a single, ‘closed’ proprietary format that locks content to a specific device,” iRex said in a statement. Amazon’s Kindle content can only be read on Kindles and the iPhone.

There is also a color version of the iRex slated to be out by 2011, while Amazon, to date, has said any color Kindle’s would be years away.

But Amazon isn’t the only contender in the nascent e-reader market. Sony (NYSE:SNE) scored a coup by unveiling the Reader Daily Edition, with a 7-inch screen that, like the iRex, costs $399, includes a touchscreen and supports EPUB.

The Reader Daily Edition is Sony’s first e-reader to have wireless 3G connectivity and is set to go on sale in time for the holiday season, which means it will beat out Plastic Logic’s device, also being synced up with the B&N e-bookstore, that’s due out in early 2010.

Meanwhile, Taiwan-based PC hardware maker Asus is prepping a budget-priced e-reader for release later this year, with the potential to take on more expensive devices from Amazon, Sony, Plastic Logic, and now perhaps, iRex Technologies.

Asus, most recently known for pioneering and helping to popularize the low-cost netbook PC category, is set to release its e-reader dubbed Eee Reader for about $160 — a price tag that recent research indicates as the sweet spot for enticing new buyers.

Sony also recently introduced two lower-budget e-reader models without 3G support: the Touch Edition, with a 6-inch screen and a suggested retail price of $299, and the Pocket Edition, with a 5-inch screen, and a suggested price tag of $199.

Page 2: The price is right?

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In July, Amazon cut the price of the Kindle 2 by $60 to $299 from $359, though the large-screen DX version costs $489. Proving, however, that vendors aren’t backing off from premium models, in addition to a low-cost device Asus may also release a more expensive, color-screen model sporting a hinged spine that opens like a book.

As the e-reader market becomes more crowded with models at different price points and with varying feature sets, cost could be a big factor in whether or not the iRex will be successful.

The price is right?

“What we found was that the price points for how most consumers value eReaders is shockingly low — for most segments, between $50 and $99. Of the 181 million U.S. consumers who are online, 14 percent, or 25 million consumers, say that eReaders priced at $199 or higher are expensive but they’d still consider them for purchase at that price point,” Sarah Rotman Epps, e-reader analyst at Forrester, wrote in a blog post highlighting the research firm’s latest data.

She goes on to say, however, that the iRex could surpass the competition if it can overcome having a brand unfamiliar to U.S. consumers.

“Perhaps the best feature is its ability to support native fonts and more flexible formatting, which will make newspapers and magazines look a lot better than they do on the Kindle DX. Will it sell? Under the iRex brand, which is unknown to consumers, iRex will struggle to sell this device next to the better-known Sony products,” writes Epps.

“But — in the long term, iRex is in a better position than any other company currently in the eReader mix to have a consumer-enterprise crossover product, like Research-In-Motion’s Blackberry, or Apple’s iPhone. Their experience in Europe puts them leagues ahead of other companies who’d like to get a piece of the as-yet-untapped enterprise eReader market.”

Analyst Tim Bajarin agrees that the iRex device is pricey, but isn’t counting it out.

“The iRex will be a competitive product but its price could be an issue given the new lower price of the Kindle and Sony eReaders,” Bajarin, president of Creative Strategies, told InternetNews.com.

“It would have an edge since it would work overseas, and the connection to B&N as well as NewspaperDirect is a plus. But its higher price will be an issue for many people, although its touch screen could be a reason people might be willing to pay more for it.”

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