Avid bookworms will swear by their Kindles, but according to a new study released on Wednesday, e-readers will likely never go main stream as long as the price hovers around the current $199-$489 range. “The price points for how most consumers value e-readers is shockingly low — for most segments, between $50 and $99,” Rotman Epps said. “To reach the largest market possible, the prices will need to come way down.” Currently the biggest obstacle to hitting the $50 price is the e-ink display itself which costs roughly $60 all on its own. Device makers can be expected to “look for alternative providers of displays if E Ink can’t bring its prices down fast enough,” Rotman Epps said.

Everything comes down in price over time, but to see the kind of growth that most companies expect, analysts expect e-reader manufactures to explore subsidy based business models, partnering with either network providers, or newspapers to help offset the cost of the device. Rotman Epps said its “a reasonable assumption” that network operators and newspapers will only subsidize e-readers if they can recover their costs by enticing consumers to sign up for long-term data plans that command monthly fees. ”

The survey estimated that approximately two million e-readers will be sold in 2009 at current prices, bringing the total install base up to about three million by the end of the year. Forrester also estimates that this only represents about 12 percent of the maximum addressable market at the $199 price point.

What would you pay?

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