Seeking Alpha is Wrong About the Potential Qalcomm/Nook Media Partnership
Have you seen the new editorial over on Seeking Alpha about Qualcomm and NookMedia? If you haven’t read it yet, don’t bother. And if you have read it, forget what you read.
Peter Larson takes the position that Qualcomm and Nook Media are secretly working on a co-branded device that uses a Mirasol screen. Yes, he thinks that Nook Media is going to produce a Nook that uses a screen that, so far as we know, stopped being produced in mid-2012.
Unfortunately, the ridiculousness of the premise is only the beginnings of the problems with that article. Larson also fails to support his arguments with accurate info. Instead he gets details wrong, misinterprets what data he has, and completely ignores the possibility that his theory has holes in it that you could drive a truck through.
Sidenote: Larson also completely missed the real story concerning a possible Qualcomm/Nook Media synergy, and I will explain that at the end of this post.
First and foremost, Larson failed to get current data before writing the article. For example, he sites that Qualcomm built a factory to produce Mirasol screens:
Qualcomm recently invested $975 million dollars to build a factory to produce Mirasol devices. That factory was scheduled to come online in late 2012, so they should be ready to mass produce devices soon.
That means Qualcomm must find a North American distribution partner for Mirasol, and nook may be the only viable candidate.
The problem here is that Larson neglected to say whether he asked Qualcomm if they ever followed through on the plans to build a factory. Something tells me that once Qualcomm ended production of Mirasol screens last year they also ended construction on the factory where they were going to make the screens.
Don’t you think Larson should have checked on that before he posted?
Larson also misses the fact that Qualcomm was having a lot of QC problems in screen production. This was likely why the screen never saw a more general launch before Qualcomm ceased production last year.
Here’s how I put it last year:
Way back before Prime View International bought E-ink and then changed its name, PVI acted as a manufacturing partner for a number of companies. They used to do small production runs for Qualcomm to produce the Mirasol screen (this was before Qualcomm’s own factory was up and running). According to my source PVI could never get the QA rating high enough for the screen to be cost-effective for the consumer market; too many screens failed the final checks.
And that production issue likely carried over into Qualcomm’s own factory. In checking back over my notes, I see that one of my sources with Pocketbook told me in April 2011 that the reason Pocketbook hadn’t produced the Pocketbook Mirasol eReader was that they lost “about half of the screens in mass production”.
I have no info to show that Qualcomm fixed these issues, and Larson sure as heck didn’t present any plausible explanation as to how Qualcomm might have done so. And that means that we have no way to know for sure that Qualcomm can produce enough Mirasol screens cheaply enough to make them worthwhile.
And that’s not the only technical problem with Mirasol screens. They also simply don’t look nice, but Larson missed that detail as well.
After flubbing the production issues Larson then goes on to fail to convey accurate info on the quality issues of Mirasol screens:
Q: Why, what makes nook so special?
The patented nook glowlight.
Early reviews of the Mirasol products have pointed out that the biggest flaw in the technology is that colors are not as vibrant as they are on LCD screens. This is because Mirasol is not backlit, and unless you are reading outside on a sunny day ambient lighting is often missing a few wavelengths.
The most likely solution to this problem is to equip Mirasol with a frontlight. Nook media can do that.
First, the Kyobo Mirasol eReader had a frontlight. I know because I was the first to post a review (part 1, part 2). The screen still sucked.
Furthermore, the Kyobo Mirasol eReader’s biggest issue wasn’t the lack of a backlight. It was the way that the color quality dropped off significantly as you changed the angle of the screen. Even staring at it straight on the color quality was marginal but if you turned the ereader more than 20% in any direction the color quality turned to shit.
Do we have any evidence that Qualcomm has fixed the screen quality issue? I don’t, and Larson sure as heck didn’t present any.
Before I go on to point out the info that Larson should have included but missed due to shallow research, I want to address a point he raised in the comments section. The very first commenter argues that Mirasol is dead, and Larson defends Qualcomm with:
As of May 21, they were still debuting new products at SID display week.
No, they were not debuting new Mirasol products at SID Display Week. The only new Mirasol screen was a super-high resolution 5″ smartphone screen that didn’t even work. It was a dummy unit, and if that is your idea of debuting a new product then you have truly started drinking the purple kool-aid.
Of course, if Larson had done his research he might have realized that Pixtronix, Qualcomm’s other screen tech company, did show off a new screen at SID Display Week. It’s not Mirasol, so it doesn’t have the clickbait value that Larson wanted, but IMO that other screen tech is more likely to hit the consumer market first.
The new Pixtronix screen is based on a Sharp IZGO backplane combined with a low-power frontplane. It measured 7″ and had an unimpressive screen resolution, but since it is designed to work with the same backplanes as LCD screens there is no reason that the resolution can’t be increased. Click here for more details.
And that’s not the only detail that Larson missed. I’m not going to make the full argument that Larson missed, but I will point out that he neglected to mention Qualcomm’s internal hardware and Android OS development teams.
Have you ever heard of the Qualcomm Reference Design Program?
While Qualcomm is known for selling chips, they also have the development teams that can produce reference designs (both the hardware and the OS running on it). Remember the 4 Mirasol ereaders? Qualcomm designed them. Qualcomm also designed this Android tablet, this Windows tablet, and this smartphone (among many others).
Remember the unofficial Android OS firmware for the HP TouchPad? It came from one of Qualcomm’s divisions.
At this point it probably won’t surprise you to learn that Qualcomm is on my short list for potential buyers/partners for Nook Media. Based on what I know about Qualcomm, it makes a lot of sense.
Nook Media would be able to offload the development costs they can no longer afford, and Qualcomm would pick up a high profile partner and customer (plus they could cherry pick the better developers from Nook Media). The possibly synergy of the pairing is obvious, IMO.
It’s a shame that Larson didn’t see it.
igorsk September 2, 2013 um 11:20 am
Great job as usual, Nate. Is this Larson guy famous or something?
Nate Hoffelder September 2, 2013 um 11:30 am
I can’t find any sign that he has any real influence, no. In fact, I don’t see why he was writing for seeking alpha.
fjtorres September 2, 2013 um 12:23 pm
Isn’t Seeking Alpha one of those crowd-sourced websites monetizing articles from pretty much anybody willing to step-up?
The few times I’ve seen their content quoted it has been promoting "fringe" ideas (to be polite) such as shorting Amazon because of their *imminent* bankruptcy.
Nate Hoffelder September 2, 2013 um 12:26 pm
That has been said about it, yes.
Peter Larson September 3, 2013 um 1:45 pm
flo September 2, 2013 um 3:42 pm
It’s not the craziest idea ever.. but I also find his arguments suck.
Also, Mirasol doesn’t seem to be a good choice at all. But what other choices do they have, if they want to compete with a Liquavista Kindle?
Nate Hoffelder September 2, 2013 um 4:00 pm
Pixtronix (Qualcomm’s other screen tech company). This might actually be the better option – if it hits the market. It has better color quality.
Edit: Or how about they don’t really need an alternative to Liquavista?
fjtorres September 2, 2013 um 4:24 pm
If by "they" you mean Nook, one would hope their focus today is on getting their house in order for the XMAS selling season instead of worrying about a hypothetical 2014-15 Kindle.
The case can be made that a good portion of B&N’s problems stem from having Amazon on the brain and trying to be something they never could be.
Job one for B&N should be clearing inventory of aging hardware.
Job two, stop the bleeding in the storefronts.
Job three, stop the Nook market share bleeding.
None of those wounds is addressed by adopting an unproven display tech.
Nate Hoffelder September 2, 2013 um 4:54 pm
Peter Larson September 3, 2013 um 3:10 pm
Thank you for the read and the refutation. I obviously have a lot of regard for what you do here.
Based on what you’ve said here, it sounds like Pixtronix or even a plain LCD screen from Qualcomm would be more likely than Mirasol; that’s a fair enough criticism and I wouldn’t disagree with it.
Seeking Alpha is an investment blogging site rather than a hardware rumors or news site, so I’m more interested in the business and financial aspects than exact hardware details.
I tried to make it clear that this is part of a speculative investment thesis, rather than news but perhaps I failed in drawing that distinction.
I’m actually also looking at Flextronics as a potential manufacturing and co-branding partner- there has been some Barnes and Noble staff migrating there and vice versa. Also, like Qualcomm, they are big enough to offer inventory guarantees. My concern with Flextronics is that I don’t think they would consider Barnes and Noble a major client, the way Qualcomm and E-ink would. But I’m less concerned with determining exactly who they work with or what they make as much as I am concerned with pointing out that they will, in fact, do something.
Thank you for pointing out that the Kyobo did have a frontlight. I do believe that Qualcomm would see that as a needed feature and as such there is value in partnering with other companies to improve that functionality. Yes, the colors would still suck anyways, but that doesn’t mean they won’t do it.