China Mobile, the leading telecom service provider in China, will contract with Taiwan-based Hon Hai Precision, the world`s largest EMS provider, to produce eBook readers, Taiwan Today News reported on Tuesday.

Ken Werner
Senior Analyst and Editor

China Mobile chairman Wang Jianzhou said the Joint Innovation Lab established by China Mobile, Vodafone, Softbank and Verizon is also going to cooperate with Hon Hai to develop more eBook readers (EBRs) in the future.

Wang estimated that 10% of the registered users of China Mobile’s telecom and application services are potential purchasers of EBRs. That’s a lot of EBRs. China Mobile has 500 million registered users, and Wang said the company will probably outsource 50 million EBRs. Three hundred million of those registered use the company’s wireless music download services and 40 million subscribe to an eNewspaper service,so China Mobile has reason to be excited by the number of downloads that could be stimulated by the wide-spread sale of EBRs. Indeed, value-added application services currently contribute 27% to China Mobile`s annual revenues, Wang said.

What does Hon Hai know about making EBRs? Quite a bit. It’s the supplier of Amazon’s Kindle.

Prime View International (PVI), the primary maker of the ePaper displays for the Kindle, the Sony Reader, and most other EBRs, is planning to contact Wang to explore opportunities for cooperation in the production of EBRs, TTN reported.

The China Mobile announcement took place in a broader expansionist contest. Amazon and Sony have both announced new models with expanded sources of paid and free content. There are now about 20 different EBR models worldwide, with some of the most exciting (such as Plastic Logic’s) yet to come. While the first EBRs were designed to read electronic books, some of the new models have larger screens and read a broader number of formats, making them suitable (at least in the eyes of their makers) for reading (and annotating) newspapers, textbooks, and business papers.

In its recently released E-Paper Displays Report, DisplaySearch forecasts the total ePaper display market will grow from 22 million units and $431 million in revenue in 2009 to 800 million and $6 billion in 2015 and 1.8 billion units and $9.6 billion in 2018. That’s for all technologies. Electrophoretic displays will account for $ 5.8 billion of that $9.6 billion in 2018, DisplaySearch says. Late this spring, Displaybank forecast the ePaper display market would be $2.1 billion in 2015. Either one of these market intelligence companies knows something the other doesn’t, or the ePaper picture has gotten very much brighter over the summer. Either way, we’re looking at significant growth.

With wireless connectivity becoming the norm for EBRs, and some new models permitting user input and file uploads to PCs, the EBR is beginning to look a little like a netbook. And you can run any of several eBook reading programs, such as the Barnes & Nobel eReader, on a netbook. As we’ve said before in this space, and undoubtedly will again, the cross-breeding of EBRs and netbooks is as inevitable as the production of bunnies in a hutch full of (unsegregated) rabbits. We anticipate a variety of products combining different features for users with different priorities. As the market shakes these products out into a few recognizable categories, there will be pressure to create displays that combine the best features of LCDs and electrophoretic displays. There are already some likely candidates.