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Bad sign for e-readers? E Ink sales plunge

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Here’s a sign that e-readers are struggling in the U.S.: E Ink Holdings, the Taiwan-based company that makes e-reader screens for companies such as Amazon (s AMZN), Barnes & Noble (s BKS) and Sony (s SNE), just had its worst quarter in four years. The company saw a net loss of NT $1.01 billion (USD $33.7 million) for the second quarter of 2013, and revenues were down 35 percent over the previous year to NT $2.93 billion (USD $98 million).

Market research companies have been forecasting the death of e-readers for awhile now as more consumers buy tablets. Nonetheless, E Ink Holdings sees growth ahead as e-readers become more popular outside the United States. “Customers [i.e., e-reader manufacturers] have put off their new product launches to the third quarter from the second quarter,” CFO Eddie Chen said (via the Taipei Times). In an investor presentation (PDF), E Ink noted that it sees increasing demand for e-readers in Western Europe and Asia, and pointed to the Kindle’s launches in China and India.

Still, the Taipei Times reports that “[to] reduce the impact of tablets, E Ink is seeking new growth areas in developing new e-paper applications such as displays for digital magazines, smart watches, handset covers and luggage tags” — but those are expected to make up less than 5 percent of the company’s revenues by the end of this year, whereas e-reader displays accounted for 70 percent of revenues in the last quarter. And the company said e-reader shipments this year will be between 10 and 15 million — flat compared to last year.

via MobileRead

10 Responses to “Bad sign for e-readers? E Ink sales plunge”

  1. stanoriver

    Current e-ink readers are useless for reading majority of documents except pocket books. It’s so small for any kind of work documents, proposals, scientific papers, technical books, encyclopaedia etc…
    It breaks structured text into small pieces where You have to zoom in, zoom out, move, move again to find the picture to which actual text refers to…

    This slows down reading of any document so that it’s far better to read it on a tablet where You can at least move quickly. Or You just go through the document on a LCD big screen.

    Then it’s speed. Before reading a document into details usually You fly through it to get an idea about it’s content from main titles, pictures, schemes.

    This is something what You simply cannot do on an e-ink reader having an 1000 pages botanical book.

    So people are rather buying paper books, printing tons of articles, aggreement proposals…

    I know 10 people who will buy an e-ink reader for 700 box no problem, which is big enough, light enough, fast enough, so that it really allows normal reading saving their eyes, backs, time

  2. When they develop a front lit reader proven to not affect circadian rhythm then that will be the device to have if you are interested in reading books at night before going to sleep. Everyone seems to avoid discussing this.

  3. Adrian Werner

    The problem isn’t just tablets, because they are vastly inferior as reading devices and people who are satisfied with them aren’t in most cases heavy readers.
    But even Kindle 1 still works well, let alone Kindle 2 . E-ink ereaders remain a completely unique technology, because it’s early adopters were in large part older men/women and housewives. Those people don’t have gadget lust. Once they buy e-ink device they will use it till it breaks instead of uprading yearly.

    • Nisah Cheatham

      I think you are right Adrian Werner.

      But I wouldn’t confine it to early adopters or older people. While I want to upgrade my phone again and again, I only bought a new Kindle Paperwhite because of the back light and the fact that my earlier Kindle was cracked and ragged.

      Now that I don’t need an external light source, and I’m still reading eInk, Why upgrade?

    • unreferenced

      That’s me. Although I’m technologically literate I’m not really an early adopter. I got a Sony PRS-505, what, five years ago? And this thing will probably last at least another five years. As much as I’d love a brand new Kindle, I’m not going to throw this thing away while it still works perfectly well.

  4. Could be calendar+ Barnes and Noble.

    Historically, Barnes and Noble has staggered product releases. The new e-ink model would come out in early summer, and the new tablet just before the holidays.

    This year, they announced they would keep making e-ink models and ditch the tablet. It’s August and we haven’t seen a new E-ink model yet. So presumably, they have shifted the e-ink model release back to fill the now vacant holiday time slot. The Barnes and Noble retail employees would have a hard time making their holiday sales numbers if they didn’t have a new toy to sell.

    This could have an outsized impact on E-ink’s summer revenues since I’m not aware of any other e-ink brand that had a summer release.

  5. Donnybrook

    Seems to me there’d be a relationship between this and the growth of color, tablet-style e-readers with backlighting. Not as good for your eyes, but I could see people wanting them. Also I-Pads and phones one can read on.

  6. pcnerd37

    I’d love to see some analysis about why the sales have plunged, whether its because of e-reading apps on other mobile devices, market saturation or just a reluctance to leave behind dead tree versions of books.

    • Good question – this has been forecast in the U.S. for awhile now by market research firms like IHS. The general argument they make is that e-readers are single-function devices and people are buying tablets instead. It’s still unclear, though, what this transition looks like outside the U.S. Amazon never releases Kindle sales numbers, so most of what we have to go on right now is reports from suppliers like E Ink. But Kobo, which has a strong international focus, recently said its e-reader sales are growing.

  7. Timely article. Just last night my wife was using Kindle on our Nexus 7, and I thought to myself about how fast the technology was developing. Just a few years ago she was reading on our 2nd generation Kindle using an external light source because that device has no backlight. That Kindle seemed so advanced at the time, particularly for the price.

    As to these losses, I would suspect they are either due to amortizing the development costs of the existing devices, or for development costs of future devices. If mainly the former, the company is probably in trouble.