Analysis: E-readers grapple with a future on the shelf
By Jeremy Wagstaff
SINGAPORE (Reuters) - Amidst our growing love affair with the tablet, spare a thought for its increasingly shelfbound sibling: the e-reader.
Take Taiwan's E Ink Holdings Inc, which makes most of the monochrome displays for devices such as Amazon.com Inc's Kindle and Barnes & Noble Inc's Nook. After five years of heady growth during which shipments rose 100-fold, it got a jolt at the end of 2011 when monthly revenues dropped 91 percent in two months.
"The bottom fell out of the market," says E Ink Chief Marketing Officer Sriram Peruvemba.
E-readers initially benefited from their reflective displays, which can be read in sunlight and require very little power. But the success of Apple Inc's iPad, improved backlit displays, power-saving technologies and new smaller tablets all point to one thing: the e-reader has become a transitional technology.
Think the harpsichord, replaced by the piano. Or Apple's iPod music player, which helped popularize the MP3 player until the arrival of the iPhone, which could play music but also do a lot of other things.
Now electronic paper companies like E Ink are scrabbling for new ways to sell the technology or in some cases, are pulling the plug entirely.
A recent survey by the Pew Research Center found that of those Americans over 30 who read e-books, less than half do so on an e-reader. For those under 30, the number falls to less than a quarter.
Analysts have cut forecasts, sometimes dramatically. IHS iSuppli predicted last December there would be 43 million e-readers shipped in 2014. When it revised those numbers last month, the estimate was lowered by two thirds. Continued...