iSupply - e-reader shipments to drop 36% in 2012 to 14.9 million units, will drop further to 7.1 million in 2016

IHS iSupply says that e-reader shipments in 2012 will reach 14.9 million units, down 36% from 2011 (23.2 million). Shipments are expected to continue and fall to 10.9 million in 2013, and only 7.1 million in 2016. iSupply say that the rapid growth and collapse of the e-reader market is "virtually unheard of", and is explained by the success of the multi-function tablets.

The pressure to keep costs down will be extreme and e-reader makers are expected to continue to sell devices at cost or even at a loss. Amazon (and B&N) has a large advantage here because they can still earn from selling e-books. Other makers will have to find different business models (for example txtr hopes to get mobile telecom subsidiaries for its $13 Beagle reader).

Back in February I posted my own views on the e-reader market. I think that a lot of people really love their e-reader and have not replaced them with tablets, which cannot be really used for long reading. But for several years now there is no compelling reason to replace your e-reader, and I'm guessing a lot of people are still reading on their old Kindle readers. This is actually good for Amazon or B&N as they earn the money from the content. It's also quite good for the environment, and for the consumers...