E-Readers: They're Hot Now, but the Story Isn't Over

Books are having their iPod moment this holiday season. But buyer beware: It could also turn out to be an eight-track moment.

While e-reading devices were once considered a hobby for early adopters, Justin Timberlake is now pitching one on prime-time TV commercials for Sony Corp. (SNE). Meanwhile, Amazon.com Inc.’s (AMZN) Kindle e-reading device has become its top-selling product of any kind. Forrester Research (FORR) estimates 900,000 e-readers will sell in the U.S. in November and December.

But e-reader buyers may be sinking cash into a technology that could become obsolete. While the shiny glass-and-metal reading gadgets offer some whiz-bang features like wirelessly downloading thousands of books, many also restrict the book-reading experience in ways that trusty paperbacks haven’t, such as limiting lending to a friend. E-reader technology is changing fast, and manufacturers are aiming to address the devices’ drawbacks.

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