If you think the coming wave of tablets is about to make e-book readers obsolete, guess again. Although dozens of tablets are scheduled to hit the market this year — from companies like Apple, HP and Dell, as well as upstarts like JooJoo — executives in the e-reader industry aren’t particularly worried. Instead, they say, tablets and E Ink-based reading devices are likely to co-exist, targeting different groups of consumers based on their purchasing power, the extent of interactivity they need and their reading patterns. “In the short term, every company is likely to have two lines of products,” says Robert Brunner, founder of Ammunition, a design firm that worked with Barnes & Noble to design the Nook e-reader . “If you think of a paperback-like reader, E Ink does a fantastic job. But color will definitely happen and it is likely to be LCD or OLED. It seems logical.” Think of this strategy as something similar to the one employed by the print publishing industry. There are more expensive, better-designed hardcovers for consumers who value presentation — while the same books are often available in cheaper, but still functional, paperback editions. In the digital world, that’s likely to translate into two sets of products: Full-featured tablets with color displays and lots of features that cost $400 or more, and inexpensive black-and-white E Ink-powered e-readers that will be available for $150 or less. The launch of Amazon’s Kindle in 2007 kickstarted the market for electronic book readers. Last year, an estimated 5 million e-readers were sold and sales are expected to double this year. Meanwhile, companies like Apple and HP are promoting their tablets as devices that can be used to read digital books — although, as mini computers, these tablets can also do a lot more. Apple has already planned an iTunes-like iPad book store, called iBooks, that will compete with Amazon in selling electronic books. The resurgence of tablets has given rise to chatter that tablets could mean the end of the road for e-readers. After all, who would want to buy a black-and-white Kindle that is basically good only for reading, when for only slightly more money, they could get a slick iPad that also does e-mail, shows movies, displays your photos and lets you edit documents? That line of reasoning is moot, say executives in the e-reader industry. “If reading is your primary entertainment activity, you are more likely to buy an e-reader,” says Glen Burchers, director of marketing for Freescale. “So this is a person who will pick up a book when they have the spare time instead of turning on the TV or opening up the computer.” Freescale’s processors power nearly 90 percent of the e-readers available currently. Recent research commissioned by Freescale showed an e-reader buyer, on average, is 43 years old, earns $72,000 and buys two e-books a month. Those who say they’re interested in buying a tablet tend to be much younger, Freescale’s research showed. Tablets will be more attractive to people who want to use them for reading but also for keeping up with their Facebook pages and Twitter feeds. An e-book designed for tablets could have interactive elements, color photos and video embeds, making it perfect for textbooks or cookbooks. Narrative non-fiction or fiction books need that kind of multimedia enhancement less, so they are more likely to be targeted at black-and-white e-readers, says Brunner. E Ink screens aren’t particularly good at anything other than books, leaving newspapers and magazines out in the cold. That’s where tablets could step in, says James McQuivey, an analyst with Forrester Research. Indeed, many magazines — including Wired — have already announced plans to develop electronic magazines that will work on tablets. But it will be a battle that could take a toll on e-paper based displays, he says. “For people who read more of those media than they do books, tablets will be an ideal device and can easily take some wind out of E Ink sales, once we get beyond the fourth of the population that really enjoys reading books,” says McQuivey. Still, tablets won’t immediately supplant lower-priced electronic paper-based e-readers, he notes. “The first thing you need to consider is whether tablets will actually be as good for book reading as the E Ink readers are,” says McQuivey. “Having a two-week battery life and a device that’s comfortable to stare at for hours at a stretch without strain (as with e-paper based e-readers) is hard to beat.” Another major factor is price. Currently, most e-readers cost about $260, and the cheapest e-reader currently available is a $200 Sony Reader. Driving the price down could help keep the category alive, especially if tablets cost $500 or more, as the iPad will. Earlier this month, Freescale announced a new processor designed exclusively for e-readers that could bring down their cost to $150 and lower. According to Freescale’s estimates, a $50 reduction in price potentially doubles the pool of consumers who say they will buy an e-reader. “At this stage of the market, price is a very important factor for growth,” Freescale’s Burcher says. So what’s a company like Amazon likely to do next? Create a color Kindle or a color tablet for e-reading? Brunner says a tablet that puts e-reading at the center is a more likely response to the iPad. “They don’t have a choice if they want to offer a richer, more in-depth experience,” he says. At least in the next two years, electronic paper displays are unlikely to offer color and video on par with LCD screens. E Ink’s color screens are not expected to be widely available until next year and alternative low power technologies, such as Qualcomm’s Mirasol , aren’t optimal for the large screens (greater than 6 inches) that are the hallmark of tablets. And even when these color, low-power display technologies become widespread, they will still lack the speed and contrast people are used to with LCDs. Instead, say some industry executives, it is likely that Amazon could design a tablet with an LCD screen that puts digital books at the center of its user interface. “Tablets currently focus on the web-surfing experience,” says Sri Peruvemba, vice-president of sales and marketing for E Ink. “But there’s room for a tablet that’s primarily targeted at students.” Even if the e-readers market splits into two, it shouldn’t make a difference to publishers or readers, says Trip Adler, CEO of Scribd, a document-sharing social network. Companies like Scribd and Lulu support multiple devices including PC, smartphones and e-readers and a wide variety of formats such as ePub and PDF. “People can upload a file in any format and we can convert it to all other formats,” says Scribd’s Adler. “We make the process simple.” See Also: Plastic Logic Aims New Que E-Reader at Business Users Dual-Screen Device Combines E-Reader, Netbook Nook E-Reader Gets Hacked to Run Apps, Browser 5 Things That Will Make E-Readers Better in 2010 Singularity Proponent Ray Kurzweil Reinvents the Book, Again … Photo: Jon Snyder/Wired.com