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Apple’s splash not wilting e-book screen maker

By Erin Ailworth
Globe Staff / January 28, 2010

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In the end, the iPad probably won’t kill the Kindle.

For weeks, Internet rumormongers speculated that Apple Inc.’s tablet computer - the iPad, unveiled yesterday - would make electronic book readers like Amazon’s popular Kindle obsolete.

But executives at E Ink in Cambridge, the leading maker of screens for e-book readers like the Kindle, said they welcomed Apple’s new product. A handheld computer that connects to the Internet, the iPad has a bright color screen that lacks the easy-on-the-eyes reflective quality of E Ink screens, and won’t match the long battery life of devices like the black-and-white Kindle.

For now, analysts said, it does not appear the iPad will wipe out the market for e-readers - the core of E Ink’s business. “I think E Ink can rest a little bit. I bet they were up late last night worrying about it,’’ said Forrester Research media analyst James McQuivey. “Over time, there will be more credible threats to E Ink, but this isn’t it.’’

Instead of being a Kindle killer, he said, the iPad might simply be “competition that will make everybody sell better.’’ He estimated that 6 million e-book readers will be sold this year.

Bill Trippe, an analyst at research firm Gilbane Group in Cambridge, said he thinks the iPad’s price - $500 for a basic version - presents a challenge for Apple and gives E Ink and the e-book readers it supplies the room they need to remain competitive.

“I think it’s high,’’ Trippe said. “I think that probably is a little sigh of relief for Amazon and E Ink. But I was in a meeting with a publisher and they were abuzz about’’ the iPad.

In order to maintain its position as a leader in the e-book world, McQuivey said, E Ink needs to work hard to make sure that its technology is seen as the “sexy’’ option likely to attract consumers.

“There’s no reason the Kindle shouldn’t have a color version,’’ he added. “Color needs to come out and the color needs to be impressive.’’

Sriram Peruvemba, vice president of marketing for E Ink, said the company expects to have a color display ready by the end of the year.

E Ink’s technology is already used in more than 50 devices worldwide, including Amazon’s Kindle and the Sony Reader, Peruvemba added, meaning that it has nearly 100 percent of the market cornered. Yesterday, he called the iPad a validation of his company’s technology, but said the Apple device is more a threat to tablet and netbook computers than it is to digital readers.

“Basically it’s an entertainment device or a laptop-replacement device,’’ Peruvemba said of the iPad. “We still believe we’re the best technology for reading.’’

Amazon didn’t address the iPad threat, but did issue a statement to the Globe touting the Kindle’s attributes: a $259 price, its light weight, and its portability.

Mary Lou Jepsen, chief executive of E Ink competitor Pixel Qi Corp., meanwhile, seemed excited by the new Apple product and what it could do for the e-book industry.

“We are all happy that Steve Jobs is with us and doing what he’s great at,’’ she wrote in an e-mail to the Globe. “We all benefit from the excitement that he has created for the tablet space.’’

Analyst Trippe said E Ink needs to push its technology forward and encourage its customers, the device makers, to improve as well.

“They can be the display technology on any kind of device. Since they’ve partnered with so many folks besides Kindle, they are not totally beholden to them,’’ Trippe said. But, he added, E Ink is “somewhat dependent on the innovation of their licensees, so the more innovative Amazon is with the Kindle, or their other partners are, the more market share they’ll be able to control.’’

Erin Ailworth can be reached at eailworth@globe.com.