Cool-er E-Reader Maker Goes Bust, Highlights Business Weaknesses

cool-er

The Cool-er e-reader seemed such a promising little beast when it arrived on the scene last year with iPodish looks, and a lower price than the Kindle. But its makers have just gone out of business, highlighting the frailty of the e-reader market.

The U.K. based Interead had been promising it was working on a next-gen version of its low-cost e-reader as recently as September 2009, and it sounded like a doozy—cheap, touchscreen-powered, and with a color screen. The original Cool-er itself had plenty of charm, and was pitched at a price below Amazon's Kindle (really the only e-reader in the game then, despite what Sony would like to believe about its e-reader products) so it seemed like it could achieve good sales. And indeed, according to a source close to Interead, reported in the Guardian, the firm had sold some 37,000 units across more than 30 countries since it went on sale. This qualifies it as a definite tech success in the e-reader market, since this marketplace never achieves the sort of massively high sales rates you associate with a new Apple product.

The company was also rumored to be trading profitably, and would break even at some point in 2010. But despite the fact that U.K. and overseas vendors are still selling the Cool-er devices, Interead was legally closed down recently, apparently for a lack of financial backing from the company's bank, and a last-minute deleted order for 17,000 of the devices from a "high-profile" U.S. retail chain. The order pitched Interead into conflict with its Taiwan-based manufacturer. Interead will still supply e-books for the devices with Coolerbooks.com, a separate business.

This product's demise highlights the volatile, and probably not sustainable, e-reader market. E-readers are specialty devices. Though Interead claimed to have 20% of the U.K. e-reader game, and had an ecosystem to supply its devices with content—copying Amazon's model on a smaller scale—the market let it down. We can guess that the last-minute change of heart by a U.S. retailer was caused by the arrival of the iPad, and the impeding army of tablet PCs: Someone in this firm's business planning department did the risk math, and decided the Cool-er wasn't worth the investment because the consumer was going to be spending their money elsewhere. With other manufacturers already aiming at dropping the price of their stripped-down single-purpose e-reader devices in a race to the bottom, Interead's demise will be a sharp reminder of the stark future e-readers face in the market. Is it going to merely be the first in a long list to succumb?

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