Perhaps the most interesting part of the Amazon Kindle DX announcement this week is the price of the product - $489, with even lower pricing in bundles that include a newspaper subscription. The Kindle DX features a 9.7" while the Kindle 2 offers a 6" display for $359. We reported earlier this year that Brother had released a document reader (essentially an electronic book reader, or EBR) that was selling for $1450. It has a similar 9.7" e-paper display. What’s going on?

Norbert Hildebrand
Insight Media Analyst

We have done some analysis of this pricing using our cost model. The Brother pricing is more in line with a scaling of the area from a 6" display to 9.7", but the DX pricing is even lower than a linear scaling from the 6 inch price point. What does this mean? Someone is subsidizing this price point.

The most likely suspect in this subsidy theory is Amazon. This makes sense if Amazon sees their long-term goal in this category to be a seller of books and other content and not as a hardware platform provider. This plays to their strengths. It is the ink jet printer or cell phone model - provide a relatively cheap platform and make money on consumables (cartridges, bandwidth or books).

As a result, we see new dynamics emerging in this larger-area range for e-paper displays. Can Brother continue to sell their product for $1,450? What does this mean for the pricing of the Plastic Logic EBR products? Plastic Logic had delayed its product release to early 2010, but is planning some field tests for the second half of 2009. How about Sony’s larger-size EBR product, which we believe will debut later this year? Can these companies offer a similar subsidized model? If not, Amazon may have delivered a very substantial blow to these competitors and solidified their position in this emerging segment.

Interest in large-sized e-paper displays and applications is growing. In fact, today E Ink announced the release of an electronic prototype kit for a 9.7" display. Besides the E Ink Vizplex display with 150 ppi resolution, the kit contains a Linux x86 operating environment and offers I/O support for USB and Bluetooth. The protype kit is available for pre-orders through E Ink directly and should ship by the end of May.

With these larger sized EBR devices coming to market, a shift in the target market from recreational book reading to textbook, newspaper and document viewing seems to be underway. This trend was already discussed in our ‘E-Paper Technologies and EBR Market Report’ published earlier this year, and we should expect a series of press releases announcing the inclusion of high education publishers in the e-book offerings of e-book stores. Although the larger EBRs are a great match for the higher education application, the content availability question has to be addressed.

For example, nobody has seriously discussed a workable model for EBRs and libraries. In the higher education environment, this functionality will be very important and has to satisfy the requirements of students who want to read the library books on their EBR and the publishing houses who want to control the distribution of the books. Some kind of encrypting scheme using two separate keys (one specific to the EBR and one specific to the library) might be able to do the trick. We will be watching for some solution here.

The next steps in EBR technology will include full color and video. The first color devices are already entering the market (the Fujitsu’s FLEPia), but E Ink has planned their color display introduction for late 2010, as Sriram Peruvemba from E Ink confirmed. Video is currently a research and development effort in many places and will take a little longer to find its way into day-to-day products. But for those of you who believe that this is just a dream, look at the provided video link below.

This video was released a year ago! E Ink stated that in the laboratory they already achieve a full color video rate of 12-15 frames per second. In this case I want my EBR in 40" with full color video (video input and ATSC tuner included)!