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At that point, many bargain eReaders will cost just $49 and some of the best will cost only $99—a price point we believe some Amazon competitors may toy with as soon as this holiday season, especially for bare bones models like the Sony Pocket Reader.
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And what will folks read on these $49 readers? This assumes that ePub is going to pull a rabbit out of its hat and suddenly become the format of choice for the majority of ebook buyers. But Amazon doesn't market ePub eBooks. Consumers will buy the ereader that delivers them the content they want ... cheap and stripped down without useful features (like always on connectedness or Kindle content) won't cut it.
If the target audience is the folks who read 2+ books a month -- apparently that's 30 million Americans -- the lure of a non-Kindle, no feature reader at $49 will not be as compelling as a fully integrated platform of which a Kindle 2i is just one element -- even at a higher price. It's not like Kindle eReaders are $2,000.
I am not convinced the conclusions of this analyst are entirely aligned with what consumers really want. He's pushing the tablet line -- which will no doubt be successful -- without paying attention that many, many households are quite content to have the right tool for the right job. Cameras on phones are not displacing pocket digital cameras or elaborate digital SLRs. Microwaves have not displaced toaster ovens or stand-alone ovens. Netbooks, laptops and desktops happily co-exist. The same will be true of dedicated, full featured ereaders.