I am a big ebook fan, and I own a Bookeen reader from Cybook. However, before we get too excited about Kindle, Cybook or the illiad, we should understand that these are all just experiments and that mass adoption is not only unlikely, but impossible at this stage.

The problem is the limited capacity for eInk display screens that all of these systems use. Currently, the only manufacturer of these screens is a company out of Taiwan called PVI. Do a search on the net and you will find that as of this time last year they were quoted as having capacity for 60,000 per month with capacity expansion planned for 2007/08, I couldn’t find any hard figures on their current capacity, but AFAIK, they had a press release at some time where they quoted a planned capacity from their plant of 1 million screens. Currently, the news from PVI is all about making flexible eInk screens, not about capacity expansion.

Anyway, the point is that this 1 million capacity is spread across all the products that use eInk, including Kindle, Cybook, Illian, Jinke, and I’m sure others that I’ve forgotten about. 1 million worldwide is only a drop in the bucket. As a comparison, there are about 80 million smartphone’s sold per year (IDC: http://www.businessweek.com/globalbiz/content/feb2007/gb20070227_008389.htm). As a comparison, I would argue that smartphones are huge among business people, but they are a bit expensive (phone price plus data plan of at least $30 per month) for the average consumer. The bottom line is that the capacity of e-Ink screens is one to two orders of magnitude below where it would have to be for mass market adoption.

Because of this it is no wonder that current prices are so high. They can’t supply a mass market, so there is no reason to leave money on the table with mass market pricing. The Kindle is sold out; the Cybook is sold out; and this shouldn’t be a surprise.

There have been a number of other companies showing eInk style prototypes to the market, but I haven’t heard of any of these setting up for commercial production. Another problem may be getting anyone to invest in production given the fact that the technology is still undergoing rapid change. If a market is huge (memory chips, integrated circuits) you might support larger production even if manufacturing techniques keep changing (45nm, etcetera) since the investment can still pay off. However, when a technology is still in its infancy (slow refresh, gray scale only, no backlight) and the market is unproven (the only real market for current technology is ebooks you need color and speed to use these screens in wider applications) then it is probably tough to make a multi-million dollar bet on a technology that might be obsolete in a year or two.

Michael