E InkThe latest quarterly financial results for E Ink Holdings Inc., the leader in epaper displays, point to an alarming decline in demand for e-readers, as the company registered its worst quarterly sales performance in four years, according to the Taipei Times, with a net loss of US$33.63 million.

E Ink supplies Amazon, Kobo, Nook, Sony, and legions of other e-reader and device manufacturers with their paper displays.

As a caution that no one should read too much into one quarter’s figures, E Ink shares actually rose after the announcement, as investors digested the company’s optimistic third quarter forecasts, when new expansion drives by Amazon and Kobo in developing markets, as well as new e-reader devices, are expected to boost sales, according to the Taiwanese sources. The Taipei Times quoted E Ink CFO Eddie Chen as saying: “There is enormous growth momentum to arrive in the third quarter.”

All the same, E Ink appears to be taking no chances, and has gone pedal to the metal in the race for innovations to offset the slackening demand for dedicated e-readers. In May it announced E Ink Spectra, claimed to be “the world’s first three pigment electronic paper display,” followed in June by a digital signage and display visionary, a 1.73″ flexible display in “its Mobius product line of flexible  electronic paper display (EPD) technology” for smartwatches.

It could be an unsettling sign of the times that E Ink is now describing itself in these releases as “a digital signage and display visionary.” If you have Amazon as your committed downstream partner, and you still feel the need to diversify away from that partnership to seek other product areas, what does that say about your basic proposition?

E InkSo although one bad quarter does not make a terminal tailspin, the writing does seems to be on the (digital signage?) wall for dedicated e-readers. It’s worth considering whether they ever had much merit in the public eye beyond price, when compared to general-purpose tablets.

No matter how much better the reading experience, most consumers still seem to be opting for the color-screen multi-purpose device when offered a choice at the same price point. High-contrast daylight-readable and lasting text apparently just isn’t enough.