E-readers: the medium is not the message

The technology developed by Plastic Logic for e-readers and other applications is really rather good – flexible displays with very low power sounds and looks like it’s a real breakthrough but faces an uphill struggle because its investors  will demand a return on their money before economies of scale kick in.

With a string of investors including Amadeus Capital Partners, Oak  Investment Partners, Bank of America, Polytechnos, Intel, Dow,  Morningside, O-BASF, Nanotech Partners, Siemens and Yasuda,  it has  also obtained private financial funding for a production facility of over $100 million –  it has total funding of $200 million.

As I listened to the presentation from Plastic Logic at the International Electronics Forum last week,  a UK CEO was  playing with his latest toy – an Apple iPad. That comes with full  colour and sells for around one third of the price of Plastic’s QUE  Proreader – a black and white model will cost around $750 when it’s  released in June – a colour version may be available at the end of  next year. CEOs might well be able to afford iPads and QUE Proreaders – they’re not for the plebs, that’s for sure.

When question time came, I asked the rep from Plastic Logic how a price tag of $750 could be justified when essentially people wanted an  affordable medium to read books, magazines and other content. The  answer wasn’t very re-assuring – the QUE Proreader is being aimed at  business people and content agreements have been signed with a number  of providers including the Wall Street Journal, the Huffington Post,  The Sporting News,  and some high end business and scientific magazines.

Hossein Yassaie, the CEO of Imagination Technologies, came to Plastic  Logic’s aid. He asked whether if the fabrication facilities were big  enough, could the price of the flexible display be brought down  sufficiently to make the technology really affordable. The answer to  that question, said Plastic Logic, was yes. Later, on a moving walkway  at London Heathrow, Yassaie said that he believed that one day such  displays would cost pennies.

The real question, of course,  is when that day will dawn. Companies  like Apple and Amazon with products like the iPad and the Kindle are  at the leading edge of e-reader technology – they’re relying on people  thinking that the coolness of having a fancy gizmo will give somewhat  immediate returns on investment. But what I want is a sheet of  flexible electronic paper with good connectivity and which costs  closer to $50 or $100 than $500 or $750.  As Plastic Logic pointed  out, economies of scale – that is to say a bigger fab churning out  more of this flexible display – would allow it to do this in the future. 

When Intel first started out touting netbooks or UMPCs, they  were $1,000 plus when they should have been $200.

Plastic Logic, we hope, is in this game for the long haul. Its  founders include Stuart M. Evans, Professor Sir Richard Friend – the  Cavendish Professor of Physics at Cambridge, and Professor Henning  Sirringhaus, the Hitachi Professor of Electron Device Physics at Cambridge University.

Perhaps it is time for the co-founders of the company to put some  pressure on their high profile industrial backers to really get  production moving. At only several dollars for the Bill of Materials  (BOM), such products would really put the horse before the cart. This isn’t the time for caution, it’s the perfect time to grab the concept and run with it.

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All stories from IEF 2010