Investing in Electronic Ink (E Ink)

What is Electronic Ink or E Ink?

Electronic Ink or E Ink is a display technology that creates electronic pages which look like printed paper with dense black type on a pearly white background. What makes E Ink unique is one very powerful fact. Once something has been drawn on the screen, that image will stay there without the need for a continuous flow of energy. This is why e-readers have such long battery life. E Ink itself is made up of a layer of negatively charged black particles, positively charged white particles, and a transparent liquid. When electrical charges are applied to the layer, black and white pixels are formed depending on whether the charge is positive or negative:

How_EInk_Works

Similar to an etch-a-sketch, once the charges have been applied and the particles render a shape, no more electrical charge is required to maintain the shape. You only need to apply charge if you want to change the shape.

E Ink for E-Readers

If you’ve heard of electronic ink or E Ink before, it was probably in respect to the use of E Ink in e-readers. The most popular e-reader device, the Amazon Kindle, was first released on November 19, 2007.

The Amazon Kindle

Retailing for US$399 at the time, the popular Kindle sold out in just five and a half hours. Since then, many other companies have come out with e-readers and the devices have achieved respectable adoption rates. However going forward, the future does not look bright for e-readers. IHS iSuppli estimates that shipments of dedicated e-readers peaked in 2011 and predicts that 2012 shipments slid to 14.9 million units, down 36% from a year earlier. By 2015, it expects unit sales of dedicated e-readers to be just 7.8 million.

EBook_Sales

One of the reasons for this decline in popularity is the falling price of tablets. Why buy an e-reader which often includes a monochrome screen and rudimentary Web surfing capabilities when I can buy a tablet instead? Although an e-reader can offer months of battery life when compared to a tablet, users typically do not want to carry multiple devices. Even Amazon is recognizing this with the release of their new Kindle Fire which they claim is the most powerful tablet under $100. Another problem is that existing users of e-readers do not feel compelled to go out and upgrade their device. If the original allows me to accomplish the basic task of reading, a method which I have now become accustomed to, why upgrade?

The Future of Electronic Ink

Even with the outlook for e-readers bleak, electronic ink has many other potential uses. One of the more disruptive uses for E Ink is that of electronic price tags for grocery and retail. With companies such as Amazon changing prices on a daily basis, it very advantageous to have price tags that can be changed via wireless at any time and all at once. These prices can also be synchronized with the company’s website so that products offered online have the same price as products in store. Other uses include digital signage for restaurants and stores, billboards, bus stops, etc. One very unique use of E Ink is in the new Plastc credit card which is essentially one credit card that can store up to 20 debit, credit, identity or loyalty cards:

EINK_PLASTC

You can pre-order one today for the hefty price of $155.

Investing in E Ink

Initial research for E Ink was started at MIT’s Media Lab with rights to the technology owned by the E-Ink Corporation, a Taiwanese technology company which was acquired by Prime View International. Prime View, a maker of e-readers including the Kindle, used to be E-Ink Corporation’s biggest customer. The combined company now trades on the Taiwanese stock exchange under the ticker 8069 and has fallen over 70% in the past 5 years, possibly as a result of the bleak outlook for e-readers. E-Ink Corporation is currently being sued for patent infringement by Research Frontiers, a topic we covered in a previous article.

While E-Ink Corporation seems to be the market leader, there have been some other companies developing E Ink as well. Xerox is developing a type of electronic paper called Gyricon. SiPix was a competitor to E Ink before being acquired by E Ink in 2012. Bridgestone was developing E Ink until they ceased in 2012.

While E Ink Corporation may not represent the most compelling investment opportunity, E Ink technology remains an area to watch given the many potential disruptive applications to which it can be applied. In a future article, we will highlight Pricer, a Swedish company involved in electronic shelf labels for retail.

Here at Nanalyze, we write about tech stocks a lot, but most of our money goes into a dividend growth strategy. Our 30 dividend stocks provide an income which increases every year. Find out how to build your own growing income streams with dividend growth stocks - Quantigence - A Dividend Growth Investing Strategy - freely available to Nanalyze Premium subscribers.

3 thoughts on “Investing in Electronic Ink (E Ink)

  1. Is any public company working on creating this for retailers? “Even with the outlook for e-readers bleak, electronic ink has many other potential uses. One of the more disruptive uses for E Ink is that of electronic price tags for grocery and retail. With companies such as Amazon changing prices on a daily basis, it very advantageous to have price tags that can be changed via wireless at any time and all at once. These prices can also be synchronized with the company’s website so that products offered online have the same price as products in store.”

  2. No mention of the *main*reasons why one might want to buy an e-ink tablet rather than an (O)LED one – weight (half) and energy consumption (1/100th – for non-moving display content at least).

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