Revenues last quarter dropped by nearly 2/3 from Q1 2011, resulting in a loss of nearly $27 million dollars. needless to say, revenue was also down slightly in Q4 2011, though it didn't show nearly this steep of a decline. The loss is being attributed to excess production capacity and an oversupply of screens stored in warehouses.
Note, though, that this should have been expected at some point. E-ink's screen tech was at best a compromise. It ruled the roost when its benefits (bi-stable screen, battery life) outweighed its detractions (grayscale, slow to refresh, cost). As soon as there was a viable alternative people adopted it in droves.
When I curse the Kindle Fire, I'm actually not joking. Yesterday we learned that the the Kindle Fire had 54% of the Android tablet market in February. Even assuming that the KF grew the market, it's a considerable number of tablets. And all that money spent on tablets had to come from somewhere. It's my bet that Android tablets have finally gotten good enough that they look like a better option than an ereader with an E-ink screen.
Now, I'm not convinced yet that the E-ink screen is through, but it does look like its heyday is past. This screen tech is still to be around and it's going to be used on many different products, but there likely won't be quite so many ereaders using it as before.