E-ink Posted a Loss Last Quarter (Damn the Kindle Fire)

The hot news this morning is the less-than-pleasant earnings report that E-ink filed in Taiwan. They're a publicly traded company, so E-ink is required to file a report much like American companies file with the SEC.

And the news was not good.  E-ink's nearly 3 year long bubble, which had been fueled by their screen tech dominating the ereader market, has come to an end. This morning Digitimes reported that E-ink posted their first quarterly loss following 10 quarters of profitability.

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.

14 thoughts on “E-ink Posted a Loss Last Quarter (Damn the Kindle Fire)

  1. eInk is still fine – none of the tablets are readable in sunlight (or like me in the car last night with sun on half the page but no issue – better than a book!) … and the front-lit will add some spark. I refuse to have the lights or lighted covers… more junk to carry… so when the Kindle comes out hopefully they will have front-lit in a keyboard option (not all of us have both hands or use of both hands!!)

    1. “so when the Kindle comes out hopefully they will have front-lit in a keyboard option (not all of us have both hands or use of both hands!!)”

      Are you implying that you can’t use one hand on the Kindle Touch? I prefer hardware buttons too (because of the tactical feel), but the Kindle Touch can easily be used with one hand.

    2. According to the following article, Apple has sold 68 million iPads since its introduction two years ago. Amazon started selling the Fire last November… and has sold nearly 30 million of them.

      That’s half of Apple’s sales, in just five months. Apple’s numbers are growing. The Kindle Fire’s numbers are growing like gangbusters. And yet, during the same time period, E Ink display sales suffered a decline?

      This from a company that supplies Amazon, and B&N, and Sony, and Kobo? That’s not good.

      See http://www.iSights.org/2012/04/the-death-of-e-ink-and-the-dedicated-e-book-reader-1.html

  2. With 70+ percent of their sales going to NorthAmerican eInk has long been vulnerable to a slowdown in dedicated reader adoption.
    Not much question that there is one going on, is there?

  3. To point out the obvious – If e-ink corp. goes belly-up then e-ink is toast regardless of whether or not there is still a market.

    A 66% YOY REVENUE decline is tough for any company to survive.

  4. >>>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.

    The NookColor proved this. And I saw someone reading a book on the NookColor at the ferry terminal this morning. Someone else was reading on an iPad.

  5. I prefer the look of eink, it is easy on the eyes… but there is a history of people wanting one device to do everything, not many specialized devices. An eink reader is specialized in function, a tablet is generalized. Tablets will swiftly overcome the eink readers, making eink readers a niche product. I’m not surprised that eink is posting a loss.

  6. eInk devices are a niche market, and as soon as the company realigns to serving that goal they will be fine.

    Alos, they need to get a not-crappy color version working.

  7. This is what happens when you offer the same basic product for multiple cycles to the technology market, which demands ever increased performance. We’ve had the same basic e-ink technology on the market for e-readers since the Kindle 3 back in 2010 — and there have been no real improvements in contrast or resolution since then.

    The displays have become commoditized, and e-ink can no longer charge the premium they could back in the day; unless they invent something new; either color, or greyscale with twice the resolution and refresh rate.

    Moral of story: Innovate or die in the tech sector.

  8. Well, they haven’t released a new product for a long time.
    The new Kobo i still using the old 600×800 pixel screen.
    If you have a 2-3 year old e-reader, I don’t see a reason to buy a new one
    now.

    They may have become stagnant with the lack of competition in this market (e-ink screens).

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