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Amazon is Going to Buy Liquavista

liquavista-display[1]Amazon has long been rumored to be interested in making a color Kindle, but so far all the rumors have turned out to be hooey. Now I wonder if perhaps Amazon’s interest in Liquavista goes back far enough that it inspired all those rumors.

Remember last week when I reported that there might be a connection between Amazon and the screen tech company Liquavista? I didn’t have any proof last week, and I don’t have solid proof now, but I do have some evidence that is strong enough that I am going to go on the record and say that this deal is in the works.

Amazon is going to buy Liquavista from Samsung.

Last week I showed you that Amazon’s hardware subsidiary Lab 126 employed a screen tech person and a CPU architect, 2 interesting details that suggest Amazon is going to develop custom components for the Kindle hardware. I happened across this info while looking for a connection between Liquavista and Amazon, but I didn’t receive any proof until after I posted that story.

The next day a friend of mine, Martijn Joosse of eReaders.nl, got back to me with the business records I asked him to look for. There’s no paperwork that shows Amazon owns Liquavista (that’s how we proved Samsung bought the company), but there is a new registration for

  • Amazon Development Center (Netherlands) B.V.

According to the records this company was formed as a software developer and a financial holding company. That doesn’t look like much, but once I started to look into the company things got really weird – so weird that it’s pretty clear that this is not one of Amazon’s usual subsidiaries.

For example, there’s no job listings on Amazon or any job site which mentions that location. Amazon is hiring lots of software people in Europe but none in the Netherlands. Of course, the company is only a few weeks so they might not be ready to hire people , but it does make you wonder.

And then there’s the location. This company is based at the Schiphol Airport World Trade Center. That is fairly expensive office space, and if this were really a software development office I would expect it to be located elsewhere in the Netherlands. This location is more suited to, say, a financial holding company owned by folks from Seattle where they could meet folks from Korea  and negotiate a deal concerning a Netherlands based screen tech company.

Edit: A reader pointed out that the address I found was most likely a mail drop, not an office. That makes things even stranger, IMO, given that the software developers won’t be able to fit inside the mailbox.

But that’s not the most interesting bit of detail about this business registration. No, the best part is that I can’t prove this company belongs to Amazon. It leads back to a faceless LLC registered in Delaware, and the trail dead ends in a faceless holding company called CSC (remember them?).

I can’t actually tell you for certain who owns the newly registered company in the Netherlands. But that’s okay, because we’ve been in this situation before.

When Amazon filed the FCC paperwork for the recently launched Kindle Fire HD tablets, they used a number of different faceless front companies to try to hide their connection to the devices. Someone is using that exact same trick to hide a connection between this new company in the Netherlands and whoever is really making the deal.

If this isn’t Amazon then it is someone who is as equally obsessed with secrecy and I can’t think of anyone who would copy this trick so carefully.

Amazon is buying Liquavista. Or at the very least they are buying part of the company (making a major investment) and plan to use Liquavista’s screen in the next Kindle.

Samsung bought Liquavista in early 2011, and quickly renamed the company Liquavista/SNRC (Samsung Netherlands Research Center). They’ve been funding research at Liquavista for the past couple years but so far as I know they have not actually released a device which used a Liquavista screen. This tech is going to have the same color qualities as LCDs while also being much more energy-efficient. It’s been under development for 10 years now and was supposed to enter mass production in 2010, 2011, and this year (it keeps getting pushed back).

From what I can tell Liquavista has not shown off any new demos since June 2011 2010. They were partnered with Freescale at the time and showed off a few demos at Freescale’s HQ in Toulouse, France. This was of course before Samsung bought the company.

Liquavista was at SID Display Week 2011 where Engadget shot this video:

The latest info I have is that Liquavista expected to have their screen tech in mass production this year. This deal could be a sign that the screen tech is ready, and that Amazon is so interested that they are investing in Liquavista.

But we won’t know for sure until Amazon makes it official.

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Comments


Mike Cane January 21, 2013 um 6:35 pm

Liquavista better have some damn fat rabbit in its hat. Because just slapping its color screen on a Kindle isn’t really going to do much. To make this purchase cost-effective, Amazon would have to sell frikkin jillions of them. And at or near current eInk Kindle prices. Maybe the could slap them in their tablets instead, but I don’t see the value if LV’s screens aren’t as color-popping as IPS.

Guillaume January 21, 2013 um 6:42 pm

Maybe it’s intended for a Kindle DX color.

Mike Cane January 21, 2013 um 6:50 pm

OK, I hadn’t considered an educational market slant to this. Could be.


fjtorres January 21, 2013 um 7:54 pm

There are two question to ponder here:
1- Why would Amazon but a new display tech?
2- Why would Samsung sell a new display tech?
There are several scenarios that might make sense for Amazon to buy into Liquavista but under what scenario would it make sense for Samsung to sell?
Samsung is pretty big in LCD and their tech is pretty good so maybe they don’t see Liquavista ramping up to commercial viability as an LCD replacement/competitor. This was always doubtful: the odds of any tech replacing LCD any time soon is pretty low.
Now, if liquavista works reasonably well but not well enough to play against LCD, it could still have a future as an eInk competitor. But only if it can find a launch partner willing to design an ebook product around it. And the best (only?) partner would be Amazon.

That brings up two scenarios: Amazon pays upfront to help ramp up production in return for preferential access to production, or Amazon unwillingness to pay Samsung’s minimal asking price for the components led Samsung to offer the entire unit for sale.

I’m sorry but I can’t see the latter, so it has to be the former.
My take is Amazon is setting up the lodgings where a skunkworks team is going to work *with* Liquavista to integrate their screen into an Amazon product or three. The R&D to be done at the Netherlands will be everything *but* the screen; screen drivers, graphics chip, CPU, etc. Probably as a rush job, because otherwise they wouldn’t need expensive lodging near the Liquavista facilties. And a rush job would point to a 2013 launch and the need for top-grade secrecy.
So, I’d say the odds of Samsung *selling* Liquavista are fairly low but higher that Amazon is going to deal with the slowdown of dedicated readers by bringing on a whole new generation of devices.

Then again, I thought Amazon putting the Kindle brand on a tablet was brand dillution.
(shrug)

Mike Cane January 21, 2013 um 8:18 pm

Amazon: We have a color backlit ereader. For $149. B&N and Kobo don’t — and can’t.

I don’t see Mirasol riding to anyone’s rescue.

Nate Hoffelder January 21, 2013 um 8:21 pm

It is a strange situation, is it not? Samsung makes parts for their competition so there’s no reason why they couldn’t make them for Amazon as well. On the other hand maybe Samsung has given up on using Liquavista in place of LCD screens. Or perhaps this deal includes a license for the IP which would let Samsung use the patents and brainpower without having to fund it.

I firmly believe that Amazon is at least making a major investment in the company. That’s why they have a holding company in the Netherlands. The exact details are still up in the air.

Edit: And if this were a skunkworks installation then it would be better to place it inside Liquavista’s facilities, not near the airport.

Nate Hoffelder January 21, 2013 um 8:38 pm

Mike reminded me that i should have checked Youtube better. It turns out Samsung brought Liquavista screens to show off at SID Display Week 2011 but not at SID Display Week 2012.

Doesn’t that suggest that they were less interested in the screen tech?

fjtorres January 21, 2013 um 10:58 pm

It’s a sign in that direction.
But it would have to be a pretty odd set of circumstances that makes Liquavista a reasonable buy for Amazon but not a worthy investment for Samsung, no?
For example, if the volume manufacturing cost were projected to be about the same or slightly higher than a comparable LCD so that any kind of reasonable markup would kill its viability. Amazon owning the IP and selling to themselves at cost could justify it as a way to beat their competition on battery life and outdoor readability.
Or it could be that the tech is inherently limited in the resolution or refresh rate so its only good for dedicated readers but not smartphones or tablets.
Either way, we’re talking a golden B-B scenario…

Nate Hoffelder January 21, 2013 um 11:11 pm

Well, Samsung has the screen on the Galaxy Note already in production. That has a resolution of 800×1280, or about 285 ppi. That’s pretty much the minimum standard for higher quality screens, and the color quality is excellent. Maybe Liquavista’s screen tech simply wasn’t getting good enough fast enough to satisfy Samsung. It wouldn’t be the first time they abandoned screen tech research.

And as for production, another possible intricacy could be that Samsung will manufacture the screens for Amazon

Mike Cane January 22, 2013 um 7:20 am

Given how Amazon is willing to burn money to grab and keep market share, I wouldn’t be surprised if they do buy Liquavista just to keep their hold on the eBook market. We haven’t seen *anyone* adopting Pixel Qi screens. And Amazon could take the cost hit on the screen by trying to make it up with Kindle book sales, something neither B&N nor Kobo can really do. But hell, Liquavista must have improved the colors because watching those demo videos, I noticed I see primarily red and blue. Where’s green and yellow? A color screen with a limited palette in 2013 would be a hard sell. Since it could do video too, how bad would those videos look with a restricted color range? Also thinking, if Amazon were to shift the Kindle reader to Android, they’d have record-breaking sales that would sink everyone else — because people would jailbreak the hell out of it as they have the Nook eInk devices. People would buy it for that alone — and the perception of Amazon killing everyone else (even while losing money *per device*) would be enough to gravely wound B&N and Kobo. Hell, I’d want to buy one just for that, aside from using it for Kindle books!

Nate Hoffelder January 22, 2013 um 8:05 am

Here’s a recent video. It shows what is clearly a pre-production model but it does look better than earlier demo screens.
http://www.youtube.com/watch?feature=player_embedded&v=Bf1GjCaYzYg


Mike Cane January 21, 2013 um 8:27 pm

YouTube search irony. Sorted by date with search term Liquavista brings up this:
http://youtu.be/drgyZoo77WE

Nate Hoffelder January 21, 2013 um 8:39 pm

LOL

Thanks. I missed the Engadget video before. It’s an interesting detail.


Zetmolm January 22, 2013 um 2:43 am

Nate, you may be right, but your arguments do not sound very convincing to me. Lots of companies from abroad have holding companies in the Netherlands. Not because they want to DO something over here, but just for tax reasons. The fact that Amazon do not have any staff on this location might indicate that they "opened" this location just for that reason.

BTW, did you check whether the size of the office space they are renting is more than one square foot (the size of a mailbox)?


Tom January 22, 2013 um 3:17 am

Like Zetmolm said, it’s just a holding company, to avoid paying taxes.
That address at Schiphol WTC holds 319 companies according to the Dutch chamber of commerce.


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Next Reader January 22, 2013 um 5:18 am

Not a tax expert here but it look more like Dutch sandwich (tax structure) to me.

Nate Hoffelder January 22, 2013 um 7:48 am

I’m going to counter all these arguments in one go. First, I know what a Dutch sandwich is:
https://the-digital-reader.com/2012/03/02/bns-new-dutch-sub-does-not-imply-an-ebookstore/

I have 2 points to counter it.
Why the secrecy in calling it a software development firm?
Why the secrecy in hiding the ownership?

Zetmolm January 22, 2013 um 9:51 am

Why call it a software development firm? The answer is in your post: they are hiring lots of software developers in Europe, and it looks like they registered the company in the Netherlands. Yes, for tax reasons.

Why hide the ownership? That is just the way they do things. They build complex corporate structures. Perhaps not so much because they want to hide the ownership, but, again, primarily for financial reasons.

Granted, all this may indicate that they are planning to do something they don’t want to tell us yet. But to call all this evidence that they are going to buy Liquavista seems a bit far fetched to me.

It would be nice if it turns out you’re right, though.

Nate Hoffelder January 22, 2013 um 10:39 am

Except that Amazon doesn’t always want to keep things a secret. For example, they openly invested in the PDF specialists Foxit. They have openly launched other subsidiaries. Lab 126 was launched in the open in 2004.

And if this new sub is related to the rest of Amazon’s extensive operations in Europe then why was it only launched this year? Amazon already has people employed all over Europe. There’s no need to launch a new sub and then hide it.

fjtorres January 22, 2013 um 12:24 pm

Plus, they already have a (legal) financial tricks subsidiary in Europe. They don’t need another. And even if they did, trying to hide it as an R&D outfit could be seen as money laundering.
They may not be buying Liquavista (that *is* a stretch) but they *are* Up.To.Something.
And the M.O. suggests a new hardware venture.

Nate Hoffelder January 22, 2013 um 5:06 pm

Liquavista has not talked to me in months, and Amazon has not denied the story. That tells me there is something going on. Also, my original source has insisted that there is a relationship here.


Mike Cane January 22, 2013 um 11:42 am

@Nate Colors still flat, unlike IPS. But put that in a 6″ and 8″ size and they’d sell a jillion of them if they could be rooted and run CyanogenMod.

Nate Hoffelder January 22, 2013 um 11:45 am

That’s because IPS dcreens have a light shining out of their arse.

fjtorres January 22, 2013 um 12:27 pm

Amazon knows how to shine a light up their armpits. 🙂


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