Plastic Logic's eReader is the first of many devices that AT&T will open up its 3G network for

AT&T's (NYSE:T) efforts to bring wireless connectivity to an array of emerging devices continued today with the announced launch of startup Plastic Logic's eReader. The paper-sized device will draw on AT&T's 3G GSM network for wireless connectivity when it launches in 2010. Ebook Readers appear to be at the early stages of following netbooks rise to prominence, but Glenn Lurie, president of AT&T's Emerging Devices division, stressed it's only one of many planned initiatives for the wireless operator.

"I think eBooks have a tremendous potential and we are very excited about the space" Lurie said, drawing a distinction between the buzz around netbooks in the computing space and that surrounding eBooks, a greenfield space for most. Amazon was the first to pioneer the eBook market with its Kindle, a new model of which was launched in February. The device is constantly connected to the Sprint EV-DO network, but does not require a monthly data plan. AT&T has not yet announced how its eReader will be priced. "What [Kindle] has done is open a lot of people's eyes to what the potential of that space is when you go a little bit further left or right from books" Lurie said. "You start thinking about magazines, newspapers and those types of things."

AT&T's Emerging Devices group was formed last year to invent new uses for AT&T's wireless network by opening it up to essentially any consumer electronic device. So far the carrier has primarily focused in on netbooks and now an eReader, but personal navigation devices, mobile Internet devices, digital cameras and a list of others are also on the roadmap. Lurie said that the connected car space will be huge for AT&T. Emerging devices, in general, is a market that In-Stat predicts to be worth $90 billion by 2013, all of which would be incremental revenue for AT&T, Lurie pointed out.

This potential onslaught of connected devices - 100 million by 2014, according to reThink group - raises the question, how will AT&T support them all on its 3G network? The carrier had received some criticism for poor coverage on the iPhone 3G model, but it is also in the process of doubling the capacity of its 3G networks, from 3.6 megabits per second to 7.2 Mb/s, before it begins its migration to evolved 3G and eventually 4G. The latest iPhone model, iPhone 3G S, for example, shipped with the 7.2 speeds already in it. AT&T, which today officially launched its integrated platform with Jasper Wireless, also supports more than 20,000 hotspots in the US and has roaming agreements for 90,000 global hotspots in 89 countries. Lurie said he has no network concerns at all and that will be reflected in AT&T's second-quarter earnings report coming out tomorrow.

"Overarchingly we are very pleased with how the network is performing" Lurie said. "We are pleased with what we've learned from having high-end devices. We are without question the leader in smartphones, including the iPhone, driving laptops that are connected and laptop cards. We are very comfortable and very excited about bringing these devices to market, and our network is going to be a big positive, which is why many of these OEMs, including Plastic Logic today, are choosing AT&T to be their partner."

The emerging devices initiative will become even more important if AT&T loses its exclusive iPhone relationship with Apple or if the rumors of an Apple netbook running on Verizon's network come to fruition. Both Sprint and Verizon Wireless are also pursuing their own mobile broadband plans with a particular push in the netbook arena. Lurie said he expects other competitors to follow Amazon and Plastic Logic into the eBook space too. Sony, for example, already has its own eBook Reader on the market and should have an updated version soon.

"Everyone always asks, we are approaching 100% penetration, so what's the high?" Lurie said. "I know people have thrown out crazy numbers like we'll get to 500% penetration. I honestly don't know, but every which way we look at this, we believe this is the next big opportunity. That is the reason that my team, the Emerging Device team was formed, and that's why we have the focus that we do."

by Sarah Reedy