Research published yesterday by IHS iSuppli reveals that the US book publishing industry has reached a “major inflection point” in which there will be a long-term decline in revenue, as e-book sales fail to reach the levels required to compensate the fall in physical book sales.

Over the period of 2010-2014, the book publishing industry will face a compound annual growth rate (CAGR) decline of 3% for both e-books and paper books. This reflects a fall in revenue from $25 billion between 2005 and 2010 to $22.7 billion between 2010 and 2014. Driving the decline is a 5% fall in the CAGR of physical book revenue, which far outweighs the 40% CAGR in e-books. This is mostly due to the fact that the selling prices of e-books are on average 40% lower than those of paper copies.

Dedicated e-readers, however, are forecast to triple in sales from 2010’s 9.7 million sales to over 30 million units in 2014. Previous figures did forecast over 40 million sales, but IHS iSuppli believes devices such as the iPad and other tablets will limit the market for such dedicated e-reading devices. IHS iSuppli also reveals in its analysis that since the introduction of the iPad, e-reader manufacturers have been forced to shrink margins from 35% to far lower levels.

[Via IHS iSuppli]