Among the developing benefits of attending the SID exposition and conference are the growing partnerships established with market research companies like DisplaySearch and, more recently, IMS Research. On Thursday, while the technical programs were in full swing and most exhibitors were busy on the show floor, the e-Book & Tablet Market Evolution conference got underway—and the program didn’t disappoint.
Sriram Peruvemba, CMO of E-Ink, gave the opening keynote, startling the crowd with the prospects of a new “specialty material” from his company featuring a whopping “720 DPI high resolution in both matte and glossy versions…” only to confess this was not an electronic display, but "real ink" on paper—sold by a different division. But remarkably, this set the tone for the early presentations that looked to find distinctions between the e-book reader (EBR) and growing popularity of tablets.
Case in point: while the bulk of LCD fabs world-wide are suffering from the down side of the “Crystal Cycle,” the non-crystal E Ink Holdings display is having a banner year. Peruvemba said the EBR market is characterized by the “hockey stick” driven by 165% growth in 2010, with 44M EBRs forecast to ship in 2012 and 71M by 2015, according to IMS Research’s count.
And while E-Ink did its part to lay out the development plans for future EPH-based products that include the new Triton color displays and applications that cover a spectrum of diversity from smart credit cards to jump drives and watches, and even snowboards with directional compass EPH displays, it’s still EBRs that lead the pack for the low-power display technology. Ross Young underscored the point in his comprehensive market review that (as usual) set the bar for industry research data. He showed on one graph a 40% gross margin for E Ink Holdings (EH) in Q2-10, with numbers hovering around the 30% range since then, through Q1-11. His comment: “the company’s dominance in frontplanes and ePaper displays, and patent holder of FFS is a desirable position to be in.”
CEA’s Director of Research, Shawn Dubravac, made the point that eReaders are distinct products, with only 12% of EBR shoppers considering a substitute device. That’s lowest by far among the group that includes: Netbooks (66%) Tablets (29%), and Laptops (20%) according to the Google/Compete Portable PC Shopping Study (Oct-2010.) And interest in EBRs remains high, as CEA studies show that plans to purchase the devices are still accelerating among “non-owners.” Tablet vs. EBR owners even look at themselves differently, Dubravac said, showing a slide that characterized 35- to 40% of households buying tablets as considering themselves “early adopters” versus only 15- to 20% of EBR households. To Dubravac, this is “…not surprising given what the technology is doing.” We’ve already adopted “book technology” and he considers EBRs simply “…another iteration of it.” This is an indicator of how consumers are thinking about that category, and what the EBR does for them, “…with implications on how this category evolves”
So for the near term, conventional thinking sees tablets and EBRs continuing to coexist, with one the multi-purpose “second screen” identified by Steve Jobs at the original iPad product launch, and an app base growing by the thousands every month, and the other, a single-purpose book reader that is simply an extension of a 1000 year old process that started with Guttenberg.
But by definition, evolution is not static, and full-color saturated magazine content is already being delivered in next-generation formats, on the iPad. And some people are still not convinced that a single-purpose device (extension of a thousand-year-old practice or not) can survive the onslaught of both innovation and consumers’ desire for full color, full-motion video, and a next-generation intelligent interface, all in sexy packaging.
When push comes to shove, do you carry that single purpose EBR, or the all-purpose tablet? We’ll see. Suffice to say, this SID/IMS conference gave us some real food for thought. –--Steve Sechrist