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E Ink displays its strength

With Kindle, other deals, company has reversed its fortunes

 Jeff Bezos, chief executive of Amazon.com, introduced the Kindle Paperwhite tablet last week in California. It’s built around an illuminated version of E Ink’s black-and-white screen to make it more readable even in bright light.

PATRICK FALLON/BLOOMBERG NEWS

Jeff Bezos, chief executive of Amazon.com, introduced the Kindle Paperwhite tablet last week in California. It’s built around an illuminated version of E Ink’s black-and-white screen to make it more readable even in bright light.

Thursday was a very good day for E Ink Corp., a Cambridge maker of display screens.

Amazon.com unveiled a new lineup of its Kindle tablet computers and e-readers, including the Kindle Paperwhite, a $119 device built around an illuminated version of E Ink’s power-sipping black-and-white screen.

Amazon’s latest Kindles use E Ink’s power-sipping screens.

Amazon’s latest Kindles use E Ink’s power-sipping screens.

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On the same day, the Canadian e-book maker Kobo Inc. rolled out three new readers with E Ink screens. Both followed an August release of an upgraded e-book, also with an E Ink screen, from the Japanese electronics giant Sony Corp.

It’s a welcome reversal of fortunes for the company, which suffered as the boom in tablet computers like Apple Inc.’s iPad, with its high-resolution color display, dented demand for the inexpensive e-book­ readers built around E Ink’s screen technology.

“The potential size of the business has definitely been reset to a lower level because of tablets,” said Paul Semenza, an analyst with the market research firm DisplaySearch in Santa Clara, Calif.

Worldwide sales of e-paper screens from E Ink and its rivals fell from 5 million in the second quarter of 2011 to 1.2 million in the same period this year, according­ to DisplaySearch. And E Ink’s Taiwanese parent company, E Ink Holdings Inc., reported a $26 million loss in the first quarter of 2012, compared with a $43 million profit in the previous quarter.

 Total sales of so-called e-paper screens have fallen, but Cambridge-based E Ink now dominates that market.

PATRICK FALLON/BLOOMBERG NEWS

Total sales of so-called e-paper screens have fallen, but Cambridge-based E Ink now dominates that market.

However, the market for those screens is now dominated by E Ink, Semenza said. Last month, the company agreed to buy SiPix Technology Inc., its main competitor, leaving E Ink as “the last man standing” in a diminished but still profitable e-paper market.

And the development of new E Ink screen-centered devices demonstrates how the rising tablet tide has helped to sell e-readers­ like the Kindle, said Sri Peruvemba, E Ink’s chief marketing officer.

“If you go back and look at when the first iPad was launched, every headline screamed that this would be the end of e-readers,” he said. “But our business actually grew in the first year after the iPad was launched.”

Peruvemba believes Apple’s hugely popular tablet showed consumers the value of a thin, lightweight computer as a reading device. As for the decline in demand for e-paper screens, Peruvemba­ blamed a glut of tablet computers from rivals like Samsung Corp., seeking to chip away at Apple’s dominance of that market. “That did definitely impact our revenue,” he said.

Meanwhile, E Ink plans to diversify beyond e-readers. One idea: a dual-screen smartphone that would combine an LCD touchscreen with an e-paper screen for reading e-books. The phone might have a clamshell design, Peruvemba said, or it could be a one-piece device, with the LCD screen on one side and E Ink’s screen on the other.

E Ink also has a foothold in LCD production. Peruvemba said it holds 3,000 patents on LCD technology, and they have been licensed to most of the world’s leading screen makers. E Ink also manufactures some LCD screens in South Korea. While Peruvemba refused to name specific customers, Semenza said the company makes screens for the Kindle Fire.

E Ink‘s core mission remains the development of displays, whatever the underlying technology, Preuvemba said. “LCD’s really not our competitor. I think our nearest competitor is printed paper.”

Hiawatha Bray can be reached at bray@globe.com.
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