Interesting article in Fast Company yesterday:
E-ink will die mostly because it fundamentally can't compete with tablets. That's why announcements like today's, in which E-Ink (it's a company as well as that company's main--or only?--product) claimed it will release both a color and a touchscreen version by early 2011, is so confusing. But color and interface are hardly the only obstacles e-ink has to overcome to compete with tablets: its refresh rates make video largely impossible, it can't cram in enough pixels to make still photos look any more crisp than a day-old McDonald's french fry, and, most damnably, it's still extremely expensive.
I've used both color and touchscreen e-ink displays before. Before its untimely demise, I saw a prototype version of the Skiff newspaper reader with color, and I've used Sony's Reader Touch Edition as well. The Skiff's color was faded, like a photocopy of a photocopy, an extremely unimpressive display closer to old four-color comics than crisp digital imagery. Sony's Touch Edition suffers from enjoyment-killing glare and a slow response rate. While I'm sure the technology for both color and touch can be advanced, I'm not the least bit convinced that it'll ever get to the point where those features are competitive. By the time e-ink catches up to modern-day LCD (and that's assuming it ever does, which is a hefty assumption), LCD will have advanced as well.
I agree with him (soemwhat), but he has his facts wrong. The problem with a slow refresh rate isn't a problem when all you're doing is reading. You don't need it. And anyway, it's also not a problem because there are a couple different screen controller chips that are fast enough to do video on an E-ink screen. Texas Instruments demoed one (video at the end of the post).
But there is a problem with E-ink screens that he probably didn't know about. I've been told that each screen refresh takes a lot more power for E-ink than for LCD. This means that when you get the screen refresh rate high enough that you can do 30fps video you lose the energy efficiency that is the selling point for E-ink.
But I still think we'll see a color E-ink screen (if not E-ink then Mirasol or Liquavista). Another detail I've noticed is that $200 Android tablets all have really crappy video ability and general poor performance. This gives dedicated ereaders a pretty good shot at competing in that price range; basically ereaders do one thing well and cheap tablets do a bunch of things poorly.