Sarah-Rotman-Epps [Posted by Sarah Rotman Epps]

I've had a lot of press inquiries about the Cool-er Reader, which is launching June 1 via direct sales on their Web site. Just a few quick thoughts:

  • What it is: An E Ink display eReader with a 6" screen, the same size as the Sony Reader products and the Kindle 2. It uses Adobe DRM/ePub formats, not a proprietary format like the Kindle, so you can buy books elsewhere and use them on the Cool-er or buy books at and use them on another eReader device like Sony's. It's intentionally stripped-down: It does not have wireless connectivity,  a touchscreen, external speakers, or sidelighting. It retails in multiple colors for US$249. It's put out by Interead, a UK-based startup led by a management team with a background in startups and finance (notably not publishing or retail). The manufacturing is done by Netronix, a Taiwanese company that also makes obscure eReaders like the Star eBook, Bookeen, and Astak Mentor.
  • What it could be: Right now, the Cool-er is only available by direct sale from its Web site, but the company is actively pursuing distribution deals to put the reader in electronics stores, supermarket chains, department stores, and bookstores, which, depending on how successful they are at getting these deals done, would give the product much wider exposure. But what's really significant is where they are pursuing these deals: their home country of the UK, the obvious suspects of US, Canada, and EU markets, but also 17 other countries, some of which (like Brazil and India) have no eReader products currently sold there. So if they get the distribution strategy right, they could have an early foothold in markets where no eReader company has gone before, even Sony.
  • What it means for the eReader market: The Cool-er Reader will be one of many new eReader products coming on the market in the next few years. By itself, it won't make a huge impact on the market, especially considering its lack of wireless, its currently limited distribution, and its relatively high price point. But collectively, this product and the others coming on the market will do three things to the eReader ecosystem:
    1. Expand consumer choice. Some consumers will be willing to accept fewer features or alternative models for a lower price. The many competitors to the iPod never made a dent in Apple's sales, but their existence is a boon to consumers who want more options.
    2. Put pricing pressure on market leaders. The Kindle DX retails for a whopping $489; other models by Amazon and Sony range from $299 to $359. While other premium products will launch in the price range of the DX, there will also be a race to get to a $199 price point with simpler models, which we expect to happen by Q3 2010. There are also companies working on a $99 eReader aimed at BRIC markets; we expect models on the market at that price point by 2012.
    3. Encourage innovation. With an increasingly crowded eReader marketplace, no one–market leaders or new entrants–can sit on their laurels. As more companies enter the market, we expect innovation for product and channel strategy to flourish. An eReader for your bathroom? eBook integration with in-flight entertainment systems like Virgin America's? 

My latest report on the future of the eReader market is due out on Tuesday. You can sign up for an alert to be emailed when it's published here.