With the summer in full swing and reading on the beach being one of the favorite activities of some of the family members, some of them bought an EBR in the last few weeks. I am not going to tell which model, but it is a real EBR of one of the major players. These independent decisions made me take a look at the market and what is going on around the world.

Norbert Hildebrand
Insight Media Analyst

Foxit Retrenches
In a recent press release Foxit announced the death of the eSlick e-reader. The e-Slick (Netronix hardware with Foxit specific software) was once one of the lowest priced devices in the market ($199). Now, with even less expensive products from Amazon and others, sales must have been dwindling, forcing Foxit into this step. According to Foxit, "The company will cease development of the eSlick Reader, its own electronic reading device, to focus on providing platform-independent PDF technology and multi-device support to leading eBook providers."

While the e-Slick website is still up and running, there is a chance you can still buy one until the inventory runs out. You might buy this device with the thought that it will be a rare (and valuable) item in a hundred years or so, but other devices offer more functionality at a lower price.

This is an example of a smaller innovator in this field that is retrenching because it did not have a sustainable business model. Since other smaller companies are also struggling too, it seems the first round of industry consolidation is under way.

Plastic Logic scraps the QUE
One of the highlights of the CES in January 2010 was the QUE from Plastic Logic. It promised a larger than life display (8.5" x 11"), as well as touch input and wireless connectivity. While the price for the device was steep, it was considered acceptable based on the large display size.

After several product delays Plastic Logic announced this week that it is not planning to release the QUE as a first generation product. Instead, CEO Richard Archuleta announced: "We plan to take the necessary time needed to re-enter the market as we refocus, redesign and retool for our next generation ProReader product. We continue to perfect our core plastic electronic technology and manufacturing processes that are central to our product’s unique value proposition."

Seems like Plastic Logic missed their window of opportunity and needs to focus on what comes next.

E-Ink Color Display
For several years E-Ink has teased us with prototypes of color electrophoretic displays and video sporting faster displays. It seems that they have released at least one of the prototypes into the wild. As we have reported earlier the new Kindle devices are using the newest E-Ink Pearl display with an increased reflectivity of 40% and a better contrast ratio of >10:1.

We suspect that this new display is the basis for the color displays as the higher reflectivity allows for denser color filter resulting in a more saturates color impression. The application of a color filter of course leads to a tradeoff scenario. Choosing a dense color filter will look good in high brightness, but limits the view ability in lower ambient. A light color filter on the other hand will lead to a washed out color impression.

At the same time the E-Ink Holdings Inc. (or PVI for those not used to it yet) used a press conference on its 2nd Quarter results to reveal some interesting news, as reported by Digitimes. They are increasing their production of FFS (fringe field switching) LCD panels from 50% of the Hydis capacity to 75%, indicating increased interest in these high-end LCD panels. But this move also lowers the capacity available for the production of backplanes for electrophoretic displays for e-readers. To make up for this, E-Ink will buy TFT backplanes for their electrophoretic displays from Chimei Innolux.

On the business side E-Ink Holdings has made good progress by posting US$ 162.4 million for the quarter with a gross margin of almost 40% and an operating profit of US$35 million. This is certainly a very healthy development for E-Ink Holdings. As for the forecast, they expect some higher sales in the 3rd Quarter as the peak season (September - November) approaches. Maybe the newly announced e-readers will contribute as well. They also expect the gross margin to drop slightly down to around 30% as the price pressure from the customers is mounting. Maybe we will be seeing the $100 e-reader by Christmas season after all.

EBRs are becoming big business, with some players moving forward and others stalling or leaving the arena. We are keeping a close look on this market and expect to launch our update e-Book Reader and -e-Tablet report very shortly.