The world’s largest epaper manufacturer released itson Tuesday. With hardware sales of NT$3.7 billion and licensing revenues of NT$1.56 billion, E-ink reported a net profit of NT$793 million (or about $25.3 million USD), up from NT$100 million in the previous quarter, but down from NT$1.0 billion in the same quarter last year.
Hardware sales were down from last quarter (8.7%) and last year (36.6%), resulting in a quarterly operating loss three times as large as it the same period last year.
“We have made efforts to improve our operations… Revenues are still below [break-even] level and we still have some idle capacity. Costs are still high,” financial executive Lloyd Chen said during the investor’s call on Monday.
Fortunately E-ink was able to make up their losses via licensing fees. Taipei Times reports that the company attributed the spike in royalty income to a new license deal with Apple.
I don’t have specifics, but Apple is reportedly using E-ink’s LCD tech in its new iPhones. Apple launched a 4.7″ iPhone 6 and 5.5″ iPhone 6+ late in the 3rd quarter, selling a record 74.5 million units.
E-ink is best known for its epaper screen tech, but it also owns Hydis, a cutting edge LCD R&D and component manufacturer. Based in Korea, Hydis screens have been used in a number of tablets, including the Nook tablets, and it also licenses its tech to other companies.
It is uncommon for anyone to speak publicly about this type of licensing deal, so I was surprised to read Apple’s name today, but we’re probably going to read more reports like this on Hydis. It shuttered two unprofitable factories in January, suggesting that it could be shifting more towards licensing the tech its R&D teams invent rather than selling components built using that tech.
In related news, E-ink is expecting shipments of epaper screens for ereaders to be flat this year from last year. However, the company is producing epaper screens for other markets, including signage, shelf labels, and smartphones.
For the whole of last year, E-ink’s net profits dropped to NT$13 million, from NT$29 million. Annual revenues fell to NT$14.6 billion ($ 467 million USD), down from NT$18.9 billion ($ 605 million USD).
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