E Ink Inc., the leader of the e-paper display supplier market, has reported operating profits for the first time in the last five years. The company credited this change to a deliberate strategic shift from being an LCD panel maker to being a dedicated e-paper display supplier to companies including Amazon.com and Rakuten Kobo Inc.
Amid growing industry wide overcapacity and falling prices in LCD panel market in 2015, E Inc. started on a major product revamp, divested from unprofitable business of LCD panel manufacturing and focused on an asset-light business model. As a result, the gross margin improved to reach 36% in FY16 with the LCD panel business accounting for only 10% in total revenues.
The company is optimistic on continued revenue growth in 2017 on account of new sales drivers, such as e-paper display applications, electronic shelf labels (ESLs) and electronic signage. It sees ESLs as a particularly good opportunity.
