The new iPod?
Trying to predict the next big thing in technology is a dangerous game; but it can also be hugely profitable as Apple found with the iPod. We think there is a good chance that one of the most important next technologies is electronic paper (e-paper), the technology underpinning a new generation of e-readers.
E-paper is not a new concept, but developing a practical and affordable version had until recently seemed a step too far. Prior to e-paper, e-books were available mainly via laptops and handheld devices with screens that displayed text and images on a backlit or LCD screen. These never really caught on with the public, primarily because they didn’t work very well in different light - particularly bright sunlight. There were also problems with battery life and screen size, but the biggest obstacle was that they simply weren’t as robust or as cheap as printing on paper.
Fortunately, researchers like those at Cambridge University spin-out Plastic Logic, persisted in their attempts to develop e-paper and their hard work can now be seen in the new generation of e-readers with e-paper displays. The key difference with the new generation of e-readers is their e-paper screens will be flexible and can be read in most all light conditions because the displays use reflected ambient light rather than backlit or LCD.
The first generation, just released, have many of the drawbacks of early e-books. However, the second generation will have colour screens, flexible displays, wireless connectivity and retail at far lower prices when they are expected to reach consumers during 2007.
The three first generation e-readers are being produced by iRex (a subsidiary of Philips), Sony and Tainjin Jinke Corporation (China). Each takes a somewhat different approach and prices (about US$400) are too high for most consumers. The key driver to build this market and lower prices may be the education sector.
The largest early adopter market for e-readers is likely to be the Chinese education market. In China the driver for the introduction of e-books will be pure economics. With a huge, rapidly evolving education system, bureaucrats are seriously considering buying 160m e-readers for students because the cost will probably be less than that for printing and distributing traditional textbooks. To put this market in context, Macmillan have just published a textbook called New Standard English which has sold more than 105,000,000 copies. That’s a huge amount of trees, ink and energy, all for just one book!
If the market develops rapidly, e-readers are expected to fall from about US$400 to US$100 by late 2007. At this price they will be a serious competitor to traditional textbooks.
While the weight of school bags sounds like an unlikely driver of new technology, US states like California are limiting the weight of textbooks to try and stave off litigation. Many US students now regularly carry school bags weighing as much as 30% of their bodyweight. Such heavy burdens are dangerous for growing bodies, and in a land renowned for litigation, e-readers may be a cheap way to circumvent possible class actions by parents and students.
E-reader trials have also been running in Europe with selected newspapers and magazines. Progress in developing this market may be slower, but e-readers will offer cheaper distribution (than print) and publishers will also be able to take advantage of the built-in interactive features to compete for advertising revenue.
We think e-paper and e-readers could grow to become far more important than the iPod, particularly in education. The technology (e-paper) which will underpin this market is also a metaphor for the close link between education, innovation and economic development. On Tainjin Jinke’s website the company describes its success as being due to the fact that ninety-five percent of their staff hold post-graduate degrees. In a country so fascinated by Chinese tertiary students, it would be very interesting to know how many of Tainjin Jinke’s staff studied in the UK?