Will tablets kill the eReader?

The to-be-launched Apple (NASDAQ:AAPL) Tablet is quickly becoming the device you never knew you had to have. Nearly one in five consumers are prepared to buy this 10-inch, touchscreen, app-friendly device, according to ChangeWave Research. And that's before the device's existence has even been confirmed. If it is a smashing success as predicted, the tablet as a category may steal the spotlight from the current placeholder, the eReader. It may even make the category wholly unnecessary.

Giving credibility to the Tablet's competitive threat, Amazon (NASDAQ:AMZN) opened up its pioneering e-reader, the Kindle, to third-party developers this week. The company said it would release a software development kit for the Kindle beginning in limited beta next month to make content available from the Kindle store later this year. Two examples that Amazon gave as already in progress include Handmark's Zagat guide of restaurant reviews and ratings and Sonic Boom's word games and puzzles.

Amazon is also raising its royalty rates for authors and publishers using the new digital text platform to 70/30 less the cost of delivery. It's hoping the Kindle Store will lure authors away from other publishing houses and encourage them to self-publish through Amazon's Digital Text program. At launch, the royalty applies to e-books with a list price of $2.99 to $9.99 that are sold in the US.

It's great that developers have many more devices to create applications for (now also including netbooks, TVs and tablets), but they still have to prioritize their platforms of choice. An eReader, built for eReading, might not be the most attractive offer. For one thing, the eReader that only pings its cellular network when it's downloading a book, so the lack of a constant connection suggests some pretty static apps. Further, the Kindle's display, designed to emulate paper, doesn't exactly have the flare of the iPhone, nor does it support video or even sound.

According to the blogosphere, Apple is rumored to be in talks with publishers such as HarperCollins to make electronic books part of its arsenal, which will also include video, computing, apps and music. The Wall Street Journal reports that the ebooks could include enhanced features and prices set by the publisher. On the Kindle, publishers often delay the release of the electronic versions of books as to not cannibalize hardcover sales with the Kindle's lower prices.

If Apple's Tablet plans come to fruition, it'd appear to be the perfect storm. The elegance of the iPhone touchscreen, the size of comparable eReaders, the apps of the smartphone world, the network connection for app functionality and the content of a book store. Who needs a device any more dedicated than that?

Email me at sarah.reedy@penton.com.

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