An e-reader skeptic converted

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By John C. Dvorak

BERKELEY, Calif. (MarketWatch) -- I'm a little more conservative than most tech writers when it comes to hot trends that may not be hot nor be trends.

I freely admit to some skepticism when e-readers made their debut highlighted by both the Sony Corp. /quotes/comstock/13*!sne/quotes/nls/sne (SNE 29.88, +0.48, +1.63%) book reader and the Kindle from Amazon.com Inc. /quotes/nls/amzn (AMZN 140.02, +0.88, +0.63%) .

The trend was confirmed by Apple Inc.'s /quotes/comstock/15*!aapl/quotes/nls/aapl (AAPL 265.03, +2.11, +0.80%) iPad, but I need to be more adept at spotting the trend when it is beginning and in the wild.

I missed the signals, twice. You look to the public-at-large to spot trends, not to pundits.

Two examples come to mind. First, I was on a flight to Michigan around the time of the first Kindle announcement and was roaming the aisle of the jet when I saw one of the flight attendants reading off of an e-reader, which turned out to be the Sony device.

I asked her how she liked it and had to listen to endless raves. She loved to read. The reader had a ton of her books and she could picks and choose what she wanted based on her mood. It worked great. It was lightweight. She went on an on.

Then I find a friend of mine -- who is not even much of a reader -- with a Kindle. All he could do was talk about how great it was.

This sort of public review should not be ignored. These are not tech geeks who buy everything and think anything with a transistor in it is God's gift to mankind. These are real people.

So the e-reader is here to stay in one form or another.

The question is what form it will take. I think it may take a long time to shake out but right now there are three forms for electronic content consumption besides the desktop or laptop computer itself.

The first is the smart phone which can display quite readable print, but it's limited by the small screen and short battery life. Also, if you spend too much time staring at the small screen you look like an idiot.

Then comes the pure e-reader, any device like the Kindle that is designed primarily for reading. These will have a MEMS (microelectromechanical system) display that requires almost no power because the displayed pixels are actually mechanically displayed and don't need constant attention from the electronics running the device. The contrast with these displays is superior and the battery life is easily a month or longer.

The drawback is the device is they are monochrome and will not be a good substitute for a printed coffee table book or colorful magazine.

The third device is the versatile pad computer modeled after the iPad. These are different from the pad computers of the past which tended to be laptops without keyboards. The iPad and most of the pads about to hit the market are essentially giant smart phones.

So what does this all mean to investors? It means the publishing business is going to undergo a massive restructuring around electronic delivery.

There are early indications that people do like reading books and newspapers on these devices. Amazon announced that it sold more e-books than hard covers in the last quarter.

Barnes & Noble Inc. /quotes/nls/bks (BKS 15.46, +0.09, +0.59%) , it should be noted, has its own device, the Nook, and is trying to work the same idea, so far, without as much publicity. Read more about Barnes & Noble's plans to promote the Nook.

The immediate effect on publishing will be a content stream that will never see a printing press. This is the publishing version of the direct-to-DVD movie that never gets aired on the big screen.

But the only reason Hollywood can make money with direct to DVD movies is because almost everyone has a DVD player. It's going to be a while before everyone has an e-reader and we are still fighting over the e-reader standards.

The early Kindles , for example, could not read the ubiquitous Adobe /quotes/comstock/15*!adbe/quotes/nls/adbe (ADBE 31.56, +2.25, +7.68%) PDF files. Why not?

The battle of the e-readers is just beginning. I do not see a clear winner yet. But I do like the aggressiveness of Amazon as it just released its third generation Kindle with higher performance and a much lower price.