According to a recent financial report issued by Hanwang Technology Co. Ltd., the company's business revenue amounted to 414 million yuan ($66.8 million) last year, down 22.36 percent compared with the previous year. Profitability was in the red at negative 13.88 million yuan ($2.23 million). Its total income from e-readers dropped to 27 percent from a peak of 75 percent in 2010.

DigiTimes Research, an internationally known research company, recently issued a report, showing that the global sales of e-readers in 2010 amounted to 11 million units, soaring to 22.82 million in 2011 before drastically dropped to 9.82 million in 2012.

Insiders indicate that tablets might soon replace e-readers in the electronic reading market.

Having operated an electronics store for several years, Yi has sold every generation of e-reader and cell phone one can possibly imagine over the years. He remembers the glorious years of 2010 and 2011. Hanvon e-readers, for example, were sold for more than 2,000 yuan ($323) a unit, 50-60 units a day. The number of e-reader manufacturers climbed to 44 this year.

Today, tablets like Samsung's Galaxy Tab, Apple's iPad and Microsoft's Surface are crowding out e-readers in Yi's store.

"No one comes to buy e-readers," said Yi, who hasn't sold a unit yet this year and planned the clearance sale.

Dismal sales are common in Beijing's major electronics market in Zhongguancun, China's silicon valley. Vendors report that consumers are passing up on e-book readers in favor of multi-functional tablet devices.

"Tablet computers can be used to play games, listen to music and send and receive e-mails while reading an e-book," said Zhang Yanan, a data analyst.

China's e-reader manufacturers started to seek changes when facing strong attacks from tablet computers three years ago, cutting prices early in 2011, one year after iPad came out.

Hanwang, concentrating on handwriting recognition technology, reduced its Hanvon e-reader price from 999 yuan ($161) to 599 yuan ($97). Other e-book manufacturers followed, but to no avail.

The mobile reading market still has robust demand. According to Shanda Cloudary Book Store, more than 90 percent of 16 million people read with mobile devices, with phones accounting for 62 percent, dedicated e-readers 16 percent and tablets 12 percent. Data shows that China's e-reader advertisement revenue is expected to exceed 20 billion yuan ($3.23 billion).

Due to its single function, the e-reader is a transitional product, said Liang Zhenpeng, an observer of the electronic industry. Mobile reading is still a rising industry, and the hardware carrier is no longer the e-reader, but instead, tablets and smart phones.

(Source: Beijing Daily)