Forecasting demand for new technology is a tricky business. The now-familiar technology adoption curve, described by Everett Rogers and others at Iowa State in 1957, posits five phases of consumer demand. (See curve here.)

The tipping point for a new technology occurs at the transition from early-adopter to early-majority demand, at which point the rate of adoption increases dramatically and sales are thought to become self-sustaining as the product turns mainstream. (It also can become the graveyard of new products that fail to make the cut.) The explosion of MP3 devices and related vertical-support businesses (e.g. iPods and iTunes) in the early part of this decade clearly fit the pattern, leading to massive dislocation in the recorded-music industry. Is book publishing destined to experience the same effects in the decade ahead? 

Three factors suggest that e-readers are in for more erratic and protracted growth than the MP3 market experience.

First, do e-readers deliver greater value than paper books?  In the case of MP3 players earlier this decade, it was a no-brainer for consumers. Not only was the listening experience identical to CDs, but the added-value was transparent and convincing (playlist capability; enhanced storage and mobility; single-track purchasing flexibility; etc.). 

There is mounting evidence that screen-reading, even on reflective E-Ink devices, is not the same as reading print on a page. Recent articles in publications including Slate, The Washington Post and O Magazine, make the case that screen reading is more distracted and less immersive. Studies by Ken Pugh, president of Yale’s Haskins Laboratories, and Maryanne Wolf, director of the Center for Reading and Language Research at Tufts University, point to the same conclusion. A piece in today’s New York Times (NYSE: NYT) also looks at how the reading experience differs between paper and screen.

In academic situations, screen reading may inhibit note-taking and retention, factors that apparently lie behind the rejection of a Kindle pilot program by Princeton students earlier this fall. (For a thorough analysis of the current debate, see “People of the Screen,” The New Atlantis.) 

Such added functionality as Kindle’s “Search Wikipedia” feature, and the enormous storage capability and portability of these devices are definite advantages, but are they enough? Ironically, as e-reader devices add even more bells and whistles in an effort to differentiate themselves from the competition, they become less book-like, and the basic reading experience is further altered. The screen-vs.-print effect could slow the path of sales to the more cautious, early-majority shoppers, particularly within such key constituencies as college students, and older consumers. 

Second, do the supply-siders really understand book-buyer demographics?  According to R. R. Bowker’s Pubtrack 2008 Consumer Book Survey, book purchasing is becoming more concentrated among avid book buyers, defined as those who purchase a minimum of 12 books per year. Standing tallest are older Americans—the Baby Boomers and “Matures” born prior to 1965. These groups constitute 54% of the U.S. population but account for 67% of all book purchases. This skew likely will trend beyond 70% as the 78 million Boomers downshift into retirement and find themselves with greater leisure time for reading and browsing. 

Thus the Boomers and Matures, who represent the lion’s share of book purchases today, are poised to become the early and late majority markets for e-readers well into the future. Are e-reader suppliers prepared to address this market, or do they remain fixated on the more youthful demographic of 18-to-34 year-olds? The “death-of-print” hyperbole among many e-pundits likely will not resonate with this crowd of older shoppers. Will marketers tailor their pitch to emphasize that these devices complement and integrate with older Americans’ bookish lifestyle?  In their rush to position their devices as a substitute technology for the book, and to add ever more lavish functionality, suppliers run the risk of alienating their mainstream market.

Finally, are the vertical pricing and distribution structures in place to support a much larger e-reader market? Confusion reigns as new e-reader devices continue to proliferate at the rate one every few months, at prices all over the map. In addition, no common platform for e-book delivery has emerged, with the industry leader, Amazon (NSDQ: AMZN), continuing to enforce its proprietary DRM technology. Publishers remain deeply suspicious of Amazon’s below-cost $9.99 pricing for e-books; some are actively pursuing their own direct-to-consumer alternatives.

Others debate the cannibalization potential of e-book vs. print sales, with some resorting to delayed e-release dates. Upcoming tablet PCs from Apple (NSDQ: AAPL) and Microsoft (NSDQ: MSFT), both likely to contain robust e-reader functions, will further fragment the market. It remains to be seen how Google (NSDQ: GOOG) Editions’ “cloud library” will alter the equation when it premieres next year.

In such an unsettled environment, normally pragmatic, early-majority consumers may be reluctant to commit to a $259 reading device. A “wait-and-see” attitude may prove the most amiable reaction, particularly among avid book buyers who remain unconvinced of the e-readers’ ultimate utility and value.

The challenges facing e-readers on the path to rapid absorption along the Rogers’ curve ought not to be underestimated. No one doubts that we have entered a critical phase in the publishing industry’s embrace of its most promising new technological innovation since audio books. But if anyone out there assumes that the outcome is a slam dunk, guess again.