Textbooks will be the next frontier for e-reader sellers

As Sony's e-book devices vie with the Kindle to win over readers, the real showdown may come later, when a shift to electronic textbooks at schools threatens to eclipse the current market for the products.

Sony and Amazon.com's Kindle are both expanding into the academic world. Students at Blyth Academy in Toronto do all their reading on Sony devices, and five U.S. universities are testing the Kindle. The days of students lugging around heavy textbooks may be numbered, said Sony executive Steve Haber.

"The only ones upset about this are going to be chiropractors," Haber, who oversees the digital reading unit, said last week. "It makes perfect sense to move to education."

Within five years, textbooks will be the biggest market for e-book devices, dwarfing sales to casual readers, predicts Sarah Epps, an analyst at Forrester Research Inc. in Cambridge, Mass. Corning Inc., developing glass screens for e-readers, expects textbooks to fuel about 80 percent of demand for those components by 2019.

"Print will expire faster in the textbook world than in the trade book world," Epps said. "The technical barriers will disappear, and five years is enough for the content to catch up with demand."

The Kindle accounts for about 60 percent of the U.S. digital reader market, while Tokyo-based Sony has 35 percent, according to Forrester. Sales of digital reading devices will double next year, to 6 million units, Forrester estimates. While the Kindle and Sony lead the field, Barnes & Noble Inc. has developed its own e-reader. And a wave of start-ups, including IRex Technologies BV and Plastic Logic Ltd., aim to win customer loyalty while the market is still young.

"When we talk to the folks in the industry, whether it's at the university or publishing level, everybody thinks, 'Yes, things could be a lot less expensive if delivered electronically,'" said Ian Freed, a vice president at Amazon.com. "There is an opportunity to make everything a lot more convenient at a lower cost."

An electronic book can't be transferred to another Kindle, so there's no "used" versions.

"That's a revenue stream publishers and authors are not participating in," said Frank Lyman, executive vice president at CourseSmart, an online marketplace started by five publishers to sell textbooks.

E-textbooks accounted for about 3 percent of total U.S. college textbook spending during the current school semester, according to Student Monitor in Ridgewood, N.J. Digital textbooks may reach 20 percent of total textbook sales in five years, CourseSmart's Lyman said.

McGraw-Hill Companies started a digital learning service this year called Connect. The format lets it bundle more interactive learning tools with books, the company says.

The transition to digital "can't happen quickly enough," said Rik Kranenburg, group president for higher education professional and international publishing at New York City-based McGraw-Hill. "Books and digital products will merge and become much larger than the market for traditional content providers."