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June 2, 2009

Why did E Ink sell?

E Ink has sold itself to Prime View International, a large Taiwanese display manufacturer, and I don’t understand why.

Now, it’s not surprising I don’t understand why. I have no info about E Ink’s financial state other than this article by Robert Weisman in the Boston Globe, and in any case I’m not a great financial guy (and I have the bank statements to prove it). So, my surprise may well be due to nothing but ignorance. Nevertheless, here’s why I was taken aback by the announcement.
E Ink is on a roll in a market that is about to explode (in the good sense). After ten years of work developing a low-power, highly legible display, it’s got something that works. Thanks to Kindle, it’s proven itself in the mass market and it’s in lots of people’s hands. And the market is about to take off now that we have digital delivery systems, a new generation of hardware, and a huge disruption in the traditional publishing market. So, why would E Ink sell itself?

The price — $215M — seems relatively low for such a hot product. If they need the money to fund R&D or to build manufacturing facilities, surely (= it’s not at all sure) there were other possibilities. Apparently the market crisis made an IPO implausible, although, to tell the truth, I — with my weak financial grasp — am not convinced. Investors are looking for places to invest, and E Ink looks like it’s exactly the sort of company they’d love to back: a proven leader in a market that’s obviously on the verge of explosive growth. It’d be like getting in on the early stage of iPods, only potentially bigger, since everyone who reads eventually will have an e-reader. But, if an IPO was out, why wouldn’t E Ink have preferred other forms of investment, including giving a partnership and equity stake to Prime View?

The most likely explanation by far is that I don’t understand what I’m talking about. Another explanation is that the company and its investors simply wanted to cash in by cashing out; the Globe article suggests this. But, that again raises the question of why they’d want to exit a company with a product in a market that’s about to take off. Perhaps they have reason to think the market is not going to take off , but that seems wrong; note that Google yesterday announced it’s going to enter the online book sales business. Or maybe they have doubts about E Ink technology. Maybe they worry the cost won’t drop fast enough for a commoditized market. Maybe color isn’t on its way fast enough. Maybe they’re worried about the inability (or so I’m presuming) of their tech ever to handle video, since the winning e-reader will eventually be multimedia. Maybe they know about ebooks on the way — Apple iPad or whatever the presumed product will be called — that will make static, black-on-gray pages seem obsolete.

So, I don’t know. But it smells fishy to me…although, as I may have mentioned, my financial sniffer has never been very reliable, and I’ll be happy to be set straight about this.

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February 7, 2009

Spot the difference!

Can you spot the most important difference?

Here’s a well-known photo of the original, extant Kindle:

Kindle 1 - Bezos holding it on cover of Newsweek

Here’s a photo from MobileRead that purports to be of the soon-to-be-announced Kindle 2.

Kindle 2

If you said that the Kindle 2 can be held without inadvertently pressing buttons, you win!!!

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December 20, 2008

On air: My love-hate relationship with my Kindle

Well, hate is too strong a word. But so is love.

Anyway, here’s a segment I did for the public radio show [Tags: ]


October 28, 2008

Big book news from Google

Google has reached a settlement agreement in the lawsuit brought by publishers who were afraid that awareness of the existence of the publishers’ books might leak out onto the Internet. (Non-biased translation: Google has settled with the publishers suing over its book search service.)

As far as I can tell from Google’s plain-English explanation (which, overall, is exceptionally clear), the default for out-of-print books that are still under copyright will be that they are available through Google Book Search. You’ll be able to not only see snippets (as now) but will be able to purchase them, with the money being distributed through a new, independent, book rights registry. In addition, libraries and universities will be able to purchase site licenses for all the books Google’s scanned.

For books currently in print and under copyright, it sounds like not much has changed. Google says publishers can “turn on” the purchase and preview options. Couldn’t they before?

Once this settlement is agreed on, we will have what sounds like a reasonable program for working within the bounds of copyright. Much will depend, of course, on what the pricing is.

Now we have to work on fixing copyright so that it serves its original purpose — providing an incentive sufficient to bring authors to write — rather than being used to create an artificial scarcity to serve the economic interests of an industry entrenched in a ditch carved into paper.

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Wendy Seltzer worries that Google will now become iTunes for books …


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