E-paper developers are tapping potential demand in Europe and China for e-reader technology.
The biggest market for e-paper is the US, based on sales of Amazon's digital book e-reader, since its launch in late 2007. But developers of e-paper and e-reader devices anticipate demand from Europe, then China, over the coming years.
E-paper technology, which creates low-power and highly reflective displays to simulate reading print on paper, has applications in markets traditionally served by print, as well as those supplied by the information display industry.
Electronic shelf-labels (ESLs) for dynamic pricing, advertising and point-of-sale, mobile and smart phones, ATM machines and clothing-integrated information displays are just a few applications for e-paper beyond e-readers.
Staying focused
There is the temptation to target every conceivable market and application, says Russ Wilcox, CEO of e-paper developer E Ink. 'But the inevitable risk of doing this is spreading yourself too thin, too early.'
E Ink, working with backplane partners such as Prime View International (PVI) in Taiwan, supplies e-paper modules. E Ink's and PVI's biggest customer is Amazon for the Kindle, but the companies also supply several e-reader developers in China and a few in Europe.
He adds: 'In 2009, the US is likely to remain our main consumer market, predominantly for ereaders;
but from 2010, it will be Europe.'
E-readers marketed to Europe now include the Sony Reader, sold through UK book chain Waterstones, and iRex's e-readers, sold through Borders in the UK. Since launching its iLiad ebook reader a few years ago iRex, a Netherlands-based Philips spin-out, has developed and launched an e-reader featuring the largest display to date. The device, launched in 2008, is branded as the DR1000 and is rewritable, with screen dimensions similar to A5. Larger display dimensions allow for more content to be rendered clearly on e-reader devices.
The company has seen demand for this e-reader from what it calls the professional market. This market includes public sector offices and departments.
iRex Technologies founder Alex Henzen believes this may be because e-readers are perceived as a 'green technology' and the public sector gets through lots of paper and documentation. 'Our first clients were in the Netherlands and we are working with others further afield. We initially thought it would be slower than it has been.'
While European newspapers were among the first to embrace e-readers, the splash that Amazon pulled off in the US has yet to occur.
According to Henzen and other sources, Europe is a more challenging market to commercialise e-readers in because each country has its own copyright rules, publishing markets, as well as the challenge of being a multilingual continent.
But, when Amazon does eventually launch an e-reader in Europe - and it does have its eye on the market - demand could grow exponentially based just on the ripples caused by the US launch. A report by Insight Media in the US, titled E-Paper Displays, Applications and the E-Book Reader Market, estimated one million e-readers sold in 2008. By 2013, this could triple and much of this demand will come from Europe.
China
To lay its hands on additional capacity to make e-paper display backplanes, PVI bought a 74% stake in Korean flat-panel maker Hydis Technologies (previously BOE Hydis) in 2008.
TH Peng is director of corporate strategy at PVI and CFO of Hydis.
'In 3-5 years, China will be the biggest market for e-paper in Asia,' says Peng, who identifies several reasons for this: 'The government sees e-paper and products based on this technology as 'green' - they are low-energy and also curb demand for paper and printed media.' China has spent several years trying to clean up its paper and pulp industry, closing down smaller polluting factories in favour of large mills with cleaner, closed-loop processes and is interested in alternatives to paper and print.
There are plenty of companies that can produce e-readers at low-cost in China', says Peng. The most high profile of these is Hanvon, which recently launched an e-reader that can be written to.
'While China's economy is more resilient than those in the west, it will want to offset falling export demand by selling electronics and other goods to its domestic consumers', he adds.
E-readers present one such opportunity. Literacy rates are rising and Chinese printers are struggling to meet demand for reading material, despite substantial investment in the print industry.
Copyrighting laws, which are less strict in China compared with other countries, could also facilitate a swift, broad uptake of e-readers, adds Wilcox.
According to Tom Wang, senior VP of marketing and sales at E Ink's competitor SiPix: 'China will galvanise itself at governmental level to set up the infrastructure needed for an ebook market, such as software - what is needed to make text digital and standardised for e-readers, and what technology e-readers themselves need to have, at an affordable price,
such as colour, and the ability to annotate.'
As well as the government's go-ahead and the hardware supply chain a large publisher retailer, with enough ebooks, texts, channels and the brand to market them is needed. China could choose to go it alone, or tie up with a western partner keen to share the market - perhaps Amazon or even Google, already popular with the Chinese government.