Stocks That Should Profit From eReaders

Sam Subramanian profile picture
Sam Subramanian

Once in a while, a disruptive technology offers opportunities to score spectacular returns. While the adoption cycle of eBooks and eReaders is still in its infancy, this technology has the potential to reshape society.

Mark Bernstein, CEO of Xerox’s (XRX) Palo Alto Research Center has described the eReader/eBook as the next disruptive technology while Steve Haber, President of Digital Reading at Sony’s (SNE) Sony Electronics unit calls it 'The beginning of the moment’.

MediaIDEAS estimates sales of eReaders worldwide to reach 6 million units in 2010 from 1.1 million in 2008. The research firm projects worldwide eReader sales to increase to 115 million units by 2013 and 446 million units by 2020.

Like most disruptive technologies, this one comes with its share of ‘obstacles’ that need to be overcome for mass adoption. The list includes cost of devices, need to change reading habits, resolving content ownership rights, and adapting economic models.

Over time, the obstacles are likely to be overcome as advantages provided by eBooks and eReaders for both users and publishers are too compelling to ignore. Here are a few:

In a wired world, users can quickly download oodles of digitized information anywhere and access references like encyclopedias in a jiffy while reading. They can change the text size and instantly share their ideas with friends. Students can save money, avoid lugging heavy backpacks, and customize content to suit their needs.

As for publishers, eBooks cut inventory and distribution costs. They also eliminate the plague of used books.

While playing disruptive technologies is often the realm of growth investors, the eReader/eBook technology offers value investors some promising opportunities as well.

Growth Selections

Shares of eReader makers like Amazon (AMZN) and Apple (AAPL) are right up a growth stock investor's alley. Companies that make eReader components are another

This article was written by

Sam Subramanian profile picture
Sam Subramanian edits AlphaProfit’s award-winning Premium Service investment newsletter and investing blog. Tailored for busy professionals, the Premium Service investment newsletter uses an unique investment process to help investors earn superior returns by investing in the best ETFs, funds, and stocks with minimal effort and low risk. Sam researches a wide range of securities including exchange traded funds, stocks, and mutual funds to identify profit opportunities for medium-term investing. Noted financial writers seek Sam’s insights on markets, sectors, industries and companies for their regular columns in financial media such as Forbes, Investors’ Business Daily, and MarketWatch. Sam holds a Doctorate degree from Syracuse University and MBA (Hons) from the University of Michigan.

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