High price holds back ubiquity of e-readers

Tablet computers and electronic readers could become as ubiquitous as digital music players but only if their prices fall dramatically, according to a new survey of attitudes to devices such as Apple's iPad and Amazon's Kindle.

The study of almost 13,000 internet users in 14 countries also offers a mixed message for media owners, concluding that consumers will pay for books, magazines and news on such devices but at lower prices than many publishers are hoping for.

The Boston Consulting Group study, conducted in March, represents one of the first surveys since the iPad was unveiled of attitudes around the world to a category of devices which many media owners regard as a chance to reset the digital economics established on the web, where consumers have become accustomed to free content.

The survey found that 28 per cent of those polled claimed that they intended to purchase a tablet or e-reader within one year, and 49 per cent said they would buy one within three years.

John Rose, the global leader of BCG's media practice, said that such declarations of an "intent to purchase" usually had to be discounted. However, he went on: "You can easily argue your way to 20-25 per cent penetration, which would make it a runaway success versus DVD players and CD players.

"The survey suggests that e-readers and tablets are not a niche product for early adopters but could become the MP3 [digital music] players of this decade. Grandmothers will soon be carrying them around," Mr Rose said.

However, mass adoption would depend on the price of single-function devices such as the Kindle or Sony Reader falling to $100-$150 and the price of multipurpose devices such as the iPad coming down from $499 to $130-$200, the survey found. Two-thirds of respondents favoured devices that were capable of performing more than one task.

Greater scale would allow manufacturers to put out cheaper consumer devices, Mr Rose said, adding that he also saw a professional market for more sophisticated and expensive gadgets.

The survey's findings about what price consumers would pay for digital media would reassure some but not all newspaper owners and would disappoint many book and magazine publishers, said Dominic Field, head of BCG's US media practice.

US consumers would pay just $5-$10 for an e-book, $2-$4 for a magazine and $5-$10 for a monthly newspaper subscription, the survey concluded.

In much of Europe, people were willing to pay higher prices, but in China and India respondents would pay no more than $3 for an e-book, $2 for a magazine and $2 for monthly newspaper access.

"You have to look at India and China in the context of the intellectual property framework they have," Mr Rose said, noting that any payment would be better than none in markets where piracy levels are high and audiences are far larger than in the US or Europe.