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Nick Sheridon believes in electronic paper. After inventing the stuff in the 1970s at Xerox’s Palo Alto Research Center, he was forced to stand by and watch his work reproduced and then advanced, 2,500 miles away at the MIT Media Lab. Now back on the e-paper trail as head of research at Gyricon Media, a Xerox spin-off, Sheridon is building an e-paper store display that the company plans to test this summer and sell by next year.

But Gyricon is entering the signage market just as its only e-paper competitor, E Ink (inheritor of the MIT effort), disclosed it will stop manufacturing its Immedia retail signs and focus instead on developing displays for handheld devices.

While Immedia was a relatively large (4’x6’) department-level display, Gyricon hopes to sell stores hundreds or thousands of smaller (12”x12”), cheaper displays that allow retailers to update prices over a wireless network. “You can put them all over the store because they’re very reasonably priced and very portable,” says Robert Sprague, acting CEO of Gyricon.

Getting the Bead Picture

Electronic paper consists of millions of micron-sized bichromal beads embedded in a sheet of clear plastic (see Electronic Paper Turns the Page, March 2001).

E Ink and Gyricon use different kinds of beads. But both work on the same principle: a current changes the color of the beads, either by rotating the bead (Gyricon) or by moving particles within the bead (E Ink). Perhaps e-paper’s biggest appeal is that when the current switches off, the image remains fixed. This means e-paper displays can run for years off a single battery.

Nick Sheridon, who invented e-paper at Xerox’s Palo Alto Research Center, now directs research at Gyricon, a Xerox spinoff. Photo by Deanna Horvath, Gyricon.

To print an image on its electronic paper, Gyricon uses an active matrix of transistors. Active matrix displays, also employed by liquid crystal display screens, address each pixel with a separate transistor, which drives up the cost of production and limits the size of displays. “It’s the addressing that slows you down,” Sheridon says. “The addressing has to be as big as the Gyricon sheet, and that’s the weak spot.”

Gyricon is also experimenting with passive matrix addressing, which turns pixels on or off using one transistor for each row and each column. “It works,” Sheridon says, “but we don’t like the images.” The problem, he explains, is that the beads must be extremely uniform. What’s more, both kinds of matrices require a rigid circuit board, defeating one of the main advantages of paper: flexibility.

Sheridon’s ideal solution is a single row of transistors, contained in an electronic wand that a user would pass over the electronic paper, like a handheld scanner in reverse. He carries around a prototype of the wand wherever he goes, and takes it out to show investors. But such a solution would make more sense for a portable display, such as an electronic newspaper, Sheridon admits.

For economic and technical reasons, Gyricon, like E Ink, chose retail displays as the obvious initial application. “You go after the lowest-hanging fruit first,” Sheridon says.

Signs of the Times

Gyricon and E Ink have had their share of setbacks. In December, the specialty-materials powerhouse 3M cancelled a partnership with Gyricon in which it would have mass-produced sheets of Gyricon’s e-paper.

Sprague attributes the parting to 3M’s reluctance to work with a startup. 3M spokeswoman Donna Flemming says it was a difference of goals, adding only that 3M “still believes” in the Gyricon technology.

Then in February, E Ink laid off 37 people-about one-quarter of its workforce-as part of a move to outsource sign manufacturing and focus on handheld devices. Unable to pursue both simultaneously, says CEO Jim Iuliano, “we have aligned our business model in signage with our business model in handheld devices.”

E Ink has been working with Lucent to develop flexible electronics to address its displays. And soon after its layoffs, the company announced a $7.5 million partnership with Philips to develop e-paper screens for handheld devices (the Philips deal precipitated the decision to outsource its signage business, Iuliano insists).

When the Price Is Right

The International Sign Association, an industry trade group, puts the annual sales of on-premise signs at $5.4 billion per year. To compete with other media for a slice of that pie, the e-paper companies need to sell their signs at a price retailers can afford.

According to Kirk Brimley, a sign-industry executive, static indoor signs typically cost between $2 and $20 per square foot. At the high end, prices for liquid crystal display screens skyrocket to roughly $1,000 per square foot.

Sprague says Gyricon will price its displays “way below” liquid crystal display screens, but declines to offer specifics. He says the company will announce its pricing at this month’s GlobalShop convention in Chicago, where it will also unveil a prototype of its retail sign.

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