Don't slam the cover on e-books yet!

NEW YORK : Readers hungry for a good page-turner will still turn to bookstores and libraries, but cheaper computers and changing consumer habits suggest that electronic books, or e-books, still have a future.

To be sure, that future is years away, particularly after Barnes & Noble Inc., the world's largest bookseller, earlier this month shook the nascent market by shutting its eBooks store. Daniel Blackman of barnesandnoble.com said downloadable books have not lived up to their hype.

"There is a market ... but it has not materialized to the point that we will be able to support the business," he said.

As with digital music, multiple books -- say, Shakespeare's collected works -- can be stored on a memory card the size of a stick of gum, making them popular with travelers, students and professionals. They are read on hand-held devices running operating systems by Palm or Microsoft, or on a PC or notebook computer.

E-books may find their niche with tech-savvy youth unfazed by the notion of browsing literature on a screen, and the growing legion of retirement-age readers, according to Richard Doherty, research director at Envisioneering Group.

"Two audiences that will benefit best are young people who loathe the idea of a library ... and aging people who want the convenience of large type on demand," or freedom from lugging heavy hardcover tomes.

For now, e-books are an afterthought in the publishing world. Less than 500,000 electronic books were sold in the United States in 2002, compared with more than 1.5 billion printed books, estimates research firm Ipsos-Insight in Chicago.

GROWTH EXPECTED, SLOWLY

Back in 2000, downloadable books enjoyed the same kind of ebullience lavished over all things Internet, with research firms projecting sales of about $250 million by 2005.

That excitement waned after a brief period of hype, which saw the likes of Microsoft Corp., Palm Inc., Adobe Systems Inc., Gemstar and Franklin Electronic Publishers Inc. developing gadgets on which one could read stories or software to mimic the look of a printed page.

Seen as too heavy, too expensive and not as much fun to read as paperbacks, tablet-like e-book devices failed to catch on. Gemstar-TV Guide International Inc., which aspired to be the world's top e-book supplier, quit the business in July and stopped selling the gadgets.

"The typical American consumer isn't ready for an e-book," Barrie Rappaport of Ipsos said. "It doesn't fit in their lifestyle at this point. As far as reading goes, people like to touch paper."

Moreover, while major publishers have committed to e-books, concerns about piracy -- which has ravaged the music industry -- may limit the number of new titles that are made available.

Still, Palm, Microsoft and Adobe continue to improve their respective reader software, which are free. Palm, Adobe and retailer Amazon.com Inc., which also sells downloadable books, said they plan no major strategic changes.

'GREAT FUTURE'

"We think that in the long term, e-book technology has a great future," said Adobe's Russell Brady. "Market acceptance has not taken off quite as quickly as was predicted, but we are certainly continuing to invest in this area."

They are encouraged by the evolution of pocket-sized computers and lower notebook prices, providing more screens on which e-books can be read. More than 20 million hand-helds have been sold and new models sell for less than $100.

"(On Wednesday) we sold 2,000 e-books. It was the largest retail day at Palm Digital Media in 2003, and we are having the largest month ever," Ryan WuerchMost, chief executive of privately held Web retailer PalmGear, said last week. PalmGear recently bought Palm Inc.'s digital publishing unit.

He estimated that PalmGear, whose offerings range from "Beowolf" to best-sellers by Stephen King and Al Franken, will sell some 1.3 million e-books over the next 12 months.

To further raise awareness, sellers must cut prices, according to IDC analyst Susan Kevorkian.

"It is too early to declare the demise of the digital book," she said. "(But) to raise awareness there needs to be competitive pricing in place to get people to adopt the technology."

© Reuters