Developing luminescent materials that convert the color of light is a major materials-science challenge. "There aren't any materials in nature that do all the things we'd like," Gibson says. The group has developed composites for each color. In the red composite, for example, blue and green light is passed along from dye molecule to dye molecule, gradually converting it to the red wavelength with as little loss as possible. Blue remains a challenge because there's not enough higher-wavelength light in sunlight or ambient room lighting to convert to blue. So the company's prototypes either use a conventional, larger blue sub-pixel or rely on blue light in a white subpixel to achieve sufficient brightness.

In theory, the HP materials should be brighter than a perfect color reflector, says Gibson. So far, Gibson says, they've made materials that are stable over time, and have demonstrated these materials in optical systems similar to those that could be used in a display. As they continue to tinker with the materials, HP researchers are developing manufacturing systems for complete displays. Gibson says they should be compatible with high-volume production processes such as ink-jet printing.

The popularity of the iPad shows that there is "clearly an appetite for color electronic gizmos for reading magazines, books, and other content," says Nick Colaneri, director of the Flexible Display Center at Arizona State University. "Vibrant, color e-paper will feed off that, and will multiply the market," he predicts.

Down the road, HP may combine reflective displays with flexible, rugged plastic electronics being developed as part of another project from the Palo Alto labs. "That would be really innovative," says Paul Semenza, a senior analyst at industry research firm Display Search. "A flexible, low-power color display is the Holy Grail," he adds. "The key thing is, can they identify and manufacture all the materials and get it to work as it seems it should?"

Meanwhile, E Ink product manager Lawrence Schwartz says the company's color electronic paper will be in products at the end of the year. The company is compensating for some of the light loss through the color filters by capitalizing on improvements in its ink formulations to produce higher contrast between white and black. The company is also improving the switching speed of its displays, which will eventually mean more animation and video.