September 28th, 2010
Welcome to this morning’s Daily Research Update. Today’s themes are e-readers, tablets, and textbook rental. If you want more context for this research, take a look at our Education and Technology Trends for 2010. You may also be interested in our Weekly Research Index, or you can follow our live, daily research on our Current News page.
(Click here to see a simple listing of today’s suggested reading)
Yesterday was a day of devices, to be sure. The folks at Kno did their part by announcing a single screen version of their textbook-focused tablet. The device features study-specific tools and on-screen writing for notes. Engadget has a nice gallery of photos.
In the broader e-reader market, Sony is updating its PRS-350 pocket e-reader, and this version is sleeker and has more internal memory (2GB). “Just as importantly, it now sports a touch-screen interface along with the new higher-contrast E Ink Pearl display found in the latest Amazon Kindle and Kindle DX. That the PRS-350 Pocket Edition Reader, which weighs in at a mere 5.64 ounces and measures a very compact 5.71 inches tall by 4.11 inches wide by 0.33 inch deep, has a touch-screen interface isn’t really the big news here. Rather, it’s that Sony’s engineers have finally gotten it right on the third try–at least the touch-screen part.”
Also, Sharp announced e-readers for its new Galapagos bookstore, but these run the Android OS, and so seem to be more like actual tablet devices than dedicated e-readers.
Speaking of tablets, RIM finally unveiled its plans for the new PlayBook tablet. Oh, and Amazon has already announced that their Kindle e-reader will ship with the devices at launch. Here are the specifications for the PlayBook:
With all the device play, one has to think that e-books will only pick up further steam. Peter Donoughue offers this estimate of market growth over the next 4-5 years. “As far as I can work out the best estimates for growth over the next four to five years is about 70-80% per year. This means that by 2015 publishers’ ebook sales could be $5 billion per year. In the US the total consumer book market is approximately $18 billion and this is not expected to grow much at all over the next five years, so we’re looking at around 30% of the consumer market being ebook sales in just five short years.”
As I always say, change leads to change. That is certainly true in the textbook industry as digital and rental are both growing aggressively in parallel. And, when it comes to rental, Chegg is certainly the leader. That position, it seems, is likely safe as Chegg has added to its war chest with another $75 million in funding.
Chegg, the online textbook rental service, has raised another $75 million from Asia-based Ace Limited, according to sources. Ace seems to be non-existent on the Internet, although sources said it is a Hong Kong-based investment firm. The round comes after a huge Series D investment in late 2009, which already brought Chegg’s funding to a whopping $144 million. Venture firms, such as Kleiner Perkins, Foundation Capital, Insight Venture Partners and others have presumably handed over that money in hopes of big returns. And, of course, the inevitable IPO for the Silicon Valley start-up. That’s because Chegg has become the front-runner in the increasingly competitive online textbook rental space as it seeks to disrupt the $10 billion college textbook business.
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