"E-bookreaders will still be the major business for Hanwang," a company spokeswoman said Monday, despite analysts' pessimism about the market because of the expansion of tablet PCs.

Facing the challenge brought on by Apple's iPad, Hanwang Technology, a Beijing-based pioneer in China's e-bookreader market, recently entered into an agreement with Microsoft on tablet PC development. This comes two months after it launched its first tablet model, the Touch Pad.

The company's confidence remains with its traditional business. Yang Fan, Hanwang's spokeswom-an, said, "E-bookreader production in China is still a growing business. It represents a new way of reading, which cannot be replaced easily." She added that the company also owns its core technology in the area of e-bookreaders.

The iPad's debut in Hong Kong Friday saw 6,000 units sell out within hours, while in the US, its sales have already passed 2 million units.

"iPad's launch in Hong Kong has to some extent affected the e-bookreader market in China. Some of the potential customers for e-bookreaders have been diverted to tablet PCs," said Cai Ling, an analyst at China Investment Consulting.

Cai said e-bookreaders still have potential and are not only a transitional product. According to a report released by Hanwang July 21, the boost from e-bookreaders and the launch of Touch Pad are among the main driving forces of the company's high growth in the first half year. The company's net profit rose by 337.32 percent year-on-year in the first six months of 2010.

Cai added that the major concern for the e-bookreader business in China will be the price, as most products' prices are still too high to be acceptable by consumers, while in the US, e-bookreader sellers, such Amazon, offer considerable discounts.

The company is also striving to enhance its user experience. Hanwang has about 60,000 books at its online store, but the library is growing by 5,000 volumes a month.