If you like the dedicated e-reader, cherish it. There’s growing evidence that the e-reader is on its way out.

As tablets have gotten smaller and less expensive, and smartphones have gotten bigger, the one-trick pony called the e-reader has gotten squeezed by its more capable siblings. Industry research firm IDC calculates that tablet sales for last year reached more than 122 million units worldwide, while e-readers dropped 28 percent -- from nearly 28 million units in 2011 to 19.9 million in 2012.

Different Numbers, Same Trend

Other market researchers differ in actual numbers, but show similar trends. IHS iSuppli found a 36% drop to 14.9 million units for e-readers in 2012 compared to 2011, followed by another 27% drop by 2014. At this rate, iSuppli expects devices that are specifically designed for e-reading will total just 7.8 million within three years.

Another report, released by market researcher eMarketer in December, declared that worldwide shipments of e-readers had dropped 36% in 2012 over the previous year. And Forrester Research has predicted e-readers’ sales in 2013 will be only 7.4 million, plummeting to 5.3 million the following year.

While the e-reader has had a good five year run, it is hitting several obstacles. Some e-reader owners are happy with the device as is and see no reason to upgrade. But those who do want to upgrade may decide to get a more functional device, like a tablet, which can also be used as an e-reader. The least expensive tablets now overlap in price with the most expensive e-readers.

It wasn’t as if this falloff was unexpected. When e-readers first emerged in 2007, many observers wondered if they would soon be overshadowed by other devices. But e-readers improved dramatically, with better connectivity, screens increasingly optimized for reading, faster and easier page turns and other book management features, basic Web browsing, and the ability to share e-books. iSuppli noted that e-readers grew from a million units shipped worldwide in 2008 to ten million two years later, reaching a peak of 23 million by 2011.

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e-Reader Comeback?

When the iPad was released in the spring of 2010, it revolutionized the moribund tablet category, and Amazon and Barnes & Noble have followed their e-reader launches with their own tablets. Currently, a major trend toward e-textbooks on tablets is being driven by Apple and others. All things considered, it could be a triumph if dedicated e-readers still sell about 8 million units by 2015, as iSuppli forecasts.

Even more impressive, a recent Pew Research Center report found that 23 percent of Americans read an e-book last year, a significant increase from the 16 percent who said the same thing in 2011. E-readers may be losing the battle, but e-books are winning the war.

Could a new generation of e-readers stage a comeback? It’s not inconceivable, if the price dropped dramatically, the screens continued to maintain or to improve their readability, and the convenience factor was irresistible. This week at the annual Consumer Electronics Show in Las Vegas, for instance, Samsung is expected to show products incorporating its new line of flexible screens, and a rollup/fold-up cheap e-reader could become the “paperback” to tablets’ “hard cover” models.

Prices might even fall so far that Amazon or Barnes & Noble will give them away to frequent e-book buyers, which wouldn’t be the first time a company made clear its real interest was in selling blades, not razors.