Prime View: Electronic Paper Display Leader

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Profits Prime View International (PVI), a small/medium LCD supplier based in Taiwan, is the only Taiwan-based LCD manufacturer that showed increased sales in the second quarter. PVI’s second quarter revenues increased 44% Y/Y to NT$2.8 billion according to the Taiwan External Trade Development Council (TAITRA). PVI supplies the electronic paper displays based on E Ink technology to Amazon’s Kindle and Sony’s Reader.

Growth The electronic paper display (EPD) market is expected to be around US$3 billion by 2013. 1.1 million ebook readers were sold in 2008 and 20 million will be sold in 2012. I’m always a bit skeptical about forecasts going out more than a year or two since there is no way to ascertain all the variables that will or might impact the EPD market. I agree that the EPD market will grow at a fast pace.

Green Cred? PVI is the largest EPD supplier and announced back on June 1 to acquire E Ink for about US$215 million. The company states that epaper is less wasteful and easier to process than paper documents. I’m not sure about that. I understand the production of paper can have negative environmental consequences but the manufacture and usage of EPDs has more of an impact than at fist glance. Let me ask some questions to challenge you to think of the pros and cons of a regular book and an EPD-based book:

  • You can borrow books from the library allowing for access to knowledge to all: an expensive investment in an electronic device is not required.
  • Books are very durable: you can drop it, step on it, bend it, etc.: Ereaders can be easily broken and then thrown away.
  • Books practically lasts forever and can be used by generations: Current ereaders will become obsolete within a few years.
  • Ereader batteries will die.
  • Ereaders will eventually end up in land fills.

Dependence The ereader depends on a multitude of technologies that are in turn not quite green in my opinion. For instance, the ereader requires electricity to use even if the EPD does not require energy when information is not being updated. The electricity is mostly generated by coal. Connected to the use of energy is the battery. Batteries are made of Lithium Ion, Lithium Polymer, Nickel Cadmium, etc.: these are not green chemicals and can be very hazardous if not properly disposed of. The dependence on the battery means you will need to take into consideration the impact of the battery manufacturing business.

Network The Kindle as well as Sony’s new Reader Daily Edition depend on a vast 3G network (AT&T for Kindle and Verizon for Sony), which require significant investments in hardware and software. These networks require signal repeaters all over the US. Personally I do not want one in my back yard because there are reports of increased illnesses who live next to high-power signal towers. When the network is upgraded to next generation technologies, the ebook readers will become less valuable and eventually obsolete. Also, to purchase books using the Kindle or Reader you need to access the online stores that in turn require massive infrastructure and human resources to develop, maintain and update.

I’m not knocking down EPD-based book readers but I do want to challenge the simple notion that these are less wasteful than paper-based books.

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