According to a new survey by Arthur Andersen, the high cost of electronic books, and the hardware required to view them, is putting a damper on the potential growth of the market. The study found 40 percent of users were in favor e-books in concept, but only 20 percent said they would purchase one or more in the next six months.

Peggy Smyth, partner and leader of Arthur Andersen's North American media and entertainment practice, said she believes e-books will never replace their printed cousins, but added they do have their merits.

"The main advantage is portability, especially for professional or reference titles," Smyth said. "If a person is on a business trip, instead of carting a bunch of heavy books around, all he or she needs is an e-book reader the size of a Palm (personal data assistant). It is also good for people who like the immediacy of reading a book review, going online and downloading it directly into their reader."

Smyth said the electronic format also is good for technical manuals that must be updated frequently and are often out-of-date by the time they are published and distributed.

More than 50 percent of survey respondents said price was a major reason for not purchasing e-books. Over 75 percent said they expect to pay less than or equal to the price of a paperback, with many of those people insisting e-books should cost half of a paperback's price.

The study found similar sentiment about the cost of e-book readers. One fourth of respondents said they would purchase one only if it was priced at $100 or less, which could present a problem with the current market. According to Smyth, a high-end model e-book reader may retail for $600 to $700, while an average model goes for around $300. "The threshold of $100 is a pain point for consumers," she said.

Another problem with today's e-book readers, Smyth said, is the small screen size of many models. "I tend not to use my e-book reader much, because I find it easier to read hard copy. As the technology improves and more people get accustomed to the idea, device manufacturers will adapt the devices to consumers' preferences," she said.

Despite consumer dissatisfaction with prices, Smyth said e-books are doing well.

"Ten percent of the people who responded to the study had purchased or received an e-book in the last year. That is significant because the technology is only about two years old and there are not that many e-books available. Over the next three years, depending on the pricing, there will be a big change in the market," she said. "The current 10 percent will double or triple in a relatively short period of time."

More information on Arthur Andersen is available on the Web at http://www.arthurandersen.com/ .