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Follow-Up: The Tablet Really Is Killing The E-Reader

kindle-bustE Ink Holdings, the firm behind the allegedly easy-on-the-eye daylight readable electronic paper that once made your Kindle or Nook so great, has just reported its first loss in 10 successive quarters. 

The company made a net loss of NT$787 million (a little under $27 million) for the first three months of 2012, after it saw a 63% slump in revenues from the previous quarter to NT$3.84 billion. The company says it's due to "off-season effects and inventory adjustments at clients." Yes, we're inclined to believe that the shift from the always-lucrative holiday season quarter to the dim, wintery first three months of the year could quite definitely adjust how many e-reader devices the average consumer buys. But a 63% slump in revenues is pretty enormous.

Because what we think is happening is that the era of the e-reader as a must-have device is drawing to a close. Back in March some research suggested that expectations for e-reader sales for the quarter were way down on the previous year's, and those predictions now look to have been right on target.

In fact, we called this back in 2010, though we thought 2010 itself was going to be the "Only Year Of The E-Reader," and the phenomenon bathed a little longer in the limelight than we thought.

The reasons why that time is over are a perfect storm of innovative competitors. It starts with Amazon's own Kindle Fire, a full-featured tablet PC at a bargain-basement price, sporting a forked version of Android beneath Amazon's own content-centric UI and thus capable of playing nicely with apps. You know, those lovely toys we like to play with for gaming, social networking, emailing and whathaveyou...all making the most of the full-color LCD screen. Amazon's sold so many of these that they now make up over 50% of all Android-powered tablets. Which, since they only were launched at the latter half of 2011, is a storming success.

The thing is, say e-ink afficionados, those Fire screens don't really work in the daytime, nor are they as gentle on the eye as e-ink, which is supposedly closer to the look and feel of real ink on real paper partly because of its high contrast, and partly because of the smooth edges e-ink can give to digital fonts. 

And that's where the iPad 3 comes in, of course. Its high-resolution LCD screen is astonishing, and it packs more pixels than probably any computer display you've used—e-book text on its screen is so flawless it's like reading a slightly glowing magazine page. And Apple has sold a ton of them, alongside its already hugely successful iPad 2.

Then there's the rumors of a super-low-price Google-branded Android tablet coming sometime soon. Would you hand over cash for an e-ink e-reader, knowing that for only a few dollars more you'd soon be able to buy a tablet that not only can display e-books, but also play videos, let you browse Facebook, get your Angry Birds game on, do some Instagramming, even, crazily, actually generate some content for work? The e-reader isn't going away overnight, of course...and its sales trajectory will soar onward for a few years yet. It's just that rocketing above it, faster, higher and more powerfully, is the tablet PC. Innovation in action.

[Image: Flickr user quinn.anya]

Chat about this news with Kit Eaton on Twitter and Fast Company too.

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  • Filipe Dias

    One thing that everyone is doing is pointing out what each kind of device is best for, but no one is discussing about how to make e-ink displays popular.
    I own a Kindle and adore this kind of display, but the display is not only useful for books, only seeing that is being way too limited. So what is the definining features of this type of display? Reflectiveness and maintains information without consuming power.
    Have you seen the Pebble watch on Kickstarter? An excellent use of these features for example. What else can we do with these kinds of screens? Tons of stuff, but unfortunately it's only seen for ebook readers, why is there such little diversity?
    LCDs are everywhere, not just in tablets, and for e-ink displays to survive they have to diversify or else if they remain attached to only one kind of product, when a product fails so will they. It's much easier to kill a cow than all the ants in an ant farm, sorry for the dark example.
    I would love to create a recipe e-ink display for when I cook, or a to-do list screen on the wall, something that consumes very little power and stays "always on".
    Again, either the display is linked to different products or probably it'll be stuck in a niche market forever.

  • Zachary Self

    Duh. I don't understand why anyone would purchase an eReader? It's obsolete technology with the advent of tablet PCs. The that will win the war will combine all of our mobile activity into one slick device. Apple and Google look to be at the forefront. Companies developing eReader's are just riding the tech trend. It's like a pocket knife vs a swiss army knife. No contest.

  • Susan R

    I am on a limited budget and am planning on buying a "new" iPad next month. It's a big big deal for me. Even with that in mind, I bought a Kindle Touch. Why? Because it's easier to replace a $100 device if it gets stolen, broken, or lost while I'm out and about or on vacation. It's also lighter for toting around and reading in bed. Until the smaller Andriod devices get to the point where they are serious competitors of the iPad, I think we'll still see a market for readers.

  • Afam Edozie

    VHS killed Betamax; Windows killed (well almost) Mac; eInk may well be superior for shear reading pleasure, but its never been purely about technological superiority, look ahead 18 months to 3 years, pixel density, contrast, resolution, power consumption, etc. are all improving faster on AMOLED technologies. With the benefit of flexibility and versatility eInk will most definitely end up in a small niche.

  • Steven Dubin

    I don't think it's fair to compare. eInk devices were designed for one thing, reading pleasure. Tablets, including the Kindle Fire, were designed for multiple tasks. While I'm sure commuters will enjoy carrying one device for the commute, the serious reader, for long reads, may find the back lit tablet screens a bit much on the eyes. The eInk readers shine for people who may spend up to an hour or longer of serious reading. That is what they were designed for and they do this job very well. Wait for the dust to settle and consumers sort out their needs. I think eInk has it's own space to fill. 

  • Adam Huda

    I believe Kit is right with this analysis. The mass market is shifting towards tablets. That's not to say that e ink based readers will go away. I believe there will be a small market for these devices. E ink does indeed have key advantages in readability and battery. Those advantages will largely be ignored by the mainstream as tablets takeover. The challenge for E Ink holdings to survive and adapt as their market shrinks. 

    In the end, the tablet experience will win and the art of storytelling will enter a new era. The magical quality of the iPad's canvas is one advantage e ink can't overcome. 

  • Sérgio Carvalho

    I really hope this is a wrong call. Amazon's Kindle is *not* a tablet. It is no good at browsing, has no app market, nothing of the sorts. However, it is an excellent book reader. The battery alone is a killer feature: I'm a heavy reader, and I charge the Kindle about once a month. Add to the battery the amazing e-ink display, and you have a very specific device, for a very specific purpose, which has no equivalent.

    E-book readers are not tablets. I know Kindle owners know that. I just hope the market also perceives that, rendering FastCompany's call wrong.

  • rollo47

    I usually think Fast Company makes the right call on the way technology is headed but I disagree on this one. I'm reminded of the comment Tim Cook made the other day; "anything can be forced to converge, you can converge a toaster and a refrigerator, but those things are not going to be pleasing to the user". 

    In my view the e-Ink display IS much easier on the eye than any back-lit display, even the iPad 3. But the main point here is convenience. The latest Kindle (basic model without touch or keyboard) is light, small and the battery lasts a month. I'm reading an 800-page book right now (Pinker's Better Angels, recommended) and frankly it's a joy to read on the Kindle. It's more practical than the printed book (lighter, searchable) and more convenient and pleasurable than reading on my iPad or iPhone (easier on the eye, no battery anxiety). I also find a dedicated e-reader less distracting than a multi-purpose device which encourages you to flip from one media source to another.

    Sure, if you just want to read a short story or perhaps a PDF, then a tablet is fine. It maybe true that e-reader devices will become less popular as people with different needs find tablets fit the bill. But for people who regularly read long books (which I admit is likely a small percentage of the population), e-readers will remain the device of choice for some years to come.