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When Amazon launched its Kindle e-reader shortly before Christmas in 2007, it was a breakout moment for E Ink, the company that made the device’s black-and-white display. E Ink’s technology—based on microcapsules containing black and white flecks that flip back and forth with the application of an electric current—made the displays readable in bright sunlight and used very little power. It was perfect for a suddenly popular product category.

Fast-forward a few years, and the ascendance of the iPad and competing tablets with high-resolution LCD displays has changed everything. In 2011 consumers snapped up 23 million e-readers, nearly all with E Ink’s technology. Just a year later they bought only 15 million—a number not expected to grow in the coming years, according to one assessment by the analyst firm iSuppli.

But there’s no sign that E Ink’s model is under threat when you tour the company’s new $40 million R&D facility in North Billerica, Massachusetts, which opened last month. Researchers there are testing new compounds and adjusting their manufacturing techniques with the goal of making color screens and improving refresh rates and resolution on the black-and-white ones. And the company is now chasing new applications like smart-watch displays and three-color store signs—while trying to hang on to the bread-and-butter e-reader market with crisper versions of its flagship technology.

The question now is whether E Ink can improve existing displays significantly or find valuable new markets before competing e-reader display technologies eat its lunch.

“Tablets are good and getting better. I think there are multiple technologies that beat the experience that E Ink provides,” says Alva Taylor, faculty director of the Center for Digital Strategies at Dartmouth’s Tuck School of Business. “To me e-ink is like duct tape as a product. They are never going to be as good as nuts and bolts and screws. But for certain kinds of small applications, they are perfect.”

That basic e-ink technology uses microcapsules filled with black and white pigment chips suspended in a clear liquid. A positive electric field across the capsules pushes the white chips to the surface, making the screen white. A negative electric field pushes the black chips up, rendering letters or images.

The best refresh rate is only about an eighth of a second, fast enough for basic animations. Full color has been elusive, though, requiring filters that give the screen a washed-out look (see “E-Paper, in Living Color”). While a few companies offer this color version, these make up less than 1 percent of e-readers sold.

But E Ink—an MIT startup bought by the Taiwanese conglomerate Prime View International in 2009—sees big things in small niches (duct tape, after all, is a $100 million industry in the United States alone). One such niche would be smart watches that are slimmer and easier to read than some existing versions and last longer on a charge (see “Qualcomm’s Toq Is a Watch Smart Enough to Keep It Simple” and “Smart Watches Need a Makeover–and a Shrink Ray”).

Thought it allows only black and white or muted colors, e-ink can work on a flexible substrate and requires only a tiny battery, as a prototype curved smart watch made by an E Ink subsidiary and a partner demonstrates. “This market is still evolving,” says Giovanni Mancini, E Ink’s director of product management. E Ink is hoping some smart-watch manufacturers may settle on lightweight devices with limited, low-power functionality rather than full color and video rendering. “The question is, how many people really want a smart watch that’s a full smartphone?” Mancini adds.

New types of displays still threaten E Ink’s long-term future. In particular, organic light-emitting diodes, or OLEDs—which are also flexible, and are more energy-efficient than LCDs—offer brilliant color and video readiness; a growing number of high-end smartphones are now available with this technology. “My suspicion is that OLEDs will win, certainly in the long run,” says Andrew Rinzler, a physicist at the University of Florida who’s working on electronics for OLEDs. “If people just want readers, then e-ink is going to have a niche. But if people want a multipurpose device, you are not going to get away from battery drain. So you might as well go with OLEDs or active devices.”

OLEDs will continue chipping away at e-ink’s efficiency advantage, Rinzler adds. They are now responsible for about 25 to 30 percent of power consumption in smartphones that use them, but that figure may soon drop to 15 percent, he says.

And OLEDs aren’t the only display technologies that could eat away at E Ink’s business. Qualcomm’s Mirasol, for example, uses tiny MEMS-based mirrors fabricated on chips to refract ambient light and produce different colors. The system has already been introduced in the Toq smart watch. Though the watch is still a prototype with no large-scale manufacturing capacity behind it, Mirasol also offers full color and fast refresh rates. And a few companies have prototyped two-screen devices or smartphone covers with e-ink screens. These would allow you to read a book on a smartphone for hours while stuck on a train without worrying about battery drain, though it’s not clear whether they will turn out to be more than gimmicks.

But E Ink is developing innovations of its own. Though the company still struggles to make high-quality full-color displays, it has managed to add a single rich color directly within the microcapsules, no filters required. While this new approach yields a refresh rate far too slow for a consumer device, it could be appealing to advertisers or retailers, says Vinita Jakhanwal, director for mobile and emerging displays technology at IHS supply, an analyst group.

This and other advances, she adds, could finally give E Ink a chance to develop a major business in the signage market. Cheaper hardware and wireless communication infrastructure make it cheaper to refresh billboards, store signs, and price tags remotely, Jakhanwal says. And in addition to adding a single color, E Ink now makes a custom display that can refresh quickly even in freezers, where cold temperatures slowed earlier versions. Some Japanese businesses, the European chain Tesco, and a growing number of other customers have started using E Ink’s technology in their signage, she says.

For the moment, Amazon and other makers of e-readers are onboard with E Ink’s newest technology, which it calls Carta. And if E Ink manages to build a new market segment in store signage, it’s not likely to face much competition. “If E Ink gets that,” Taylor says, “they can probably keep it.”

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Credit: Photograph by David Talbot | MIT Technology Review

Tagged: Communications, Qualcomm, Amazon

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