The emergence of a commercially significant electronic book (e-book) market in the past three years has been the result of two quite-recent technological developments. The first, and most critical, has been a breakthrough in the technology for manufacturing reflective electronic paper displays (EPDs), allowing for the introduction of affordable, lightweight and portable e-book readers such as Amazon’s Kindle and Sony’s Reader.

The second has been the rollout of reliable “3G” wireless broadband networks, which have made it possible to deliver digital books directly to reading devices without the intermediate steps of downloading files to a PC and then transferring them to a reader. Direct-to-device sampling and delivery, particularly with Amazon’s Kindle and Apple’s iPhone, have enabled impulse-driven e-commerce, which has been critical to early consumer adoption of e-books.

The technology for e-books, however, remains nascent. The Kindle and its ilk are very much first-generation devices that deliver the minimally acceptable experience. Further development of the business will be closely tied to future technological developments, including flexible and color displays, format standardization and rich-media applications. As the market grows, there are numerous opportunities for other technology players, from social networks to cloud service providers and more. This report examines the trends and opportunities ahead.