E Ink Holdings Faces First Quarterly Loss in Over Two Years Amid Tablet Competition and Market Challenges

It’s somewhat surprising, but with the rise of cheap tablets, especially in the U.S., it was something you could have foreseen: E Ink Holdings is reporting losses for the first time after 10 profitable quarters. For the first quarter of 2012, these amount to about 27 million US dollars.

E Ink Holdings is the manufacturer of eInk Pearl displays, which you’ll currently find in almost every modern eBook reader—from Amazon and Kobo to Sony and PocketBook.

Compared to the first quarter of 2011, sales have dropped by 63 percent. As E Ink Holdings explains, this is partly due to “off-season effects,” meaning generally lower sales outside the strong holiday season, and partly because their partners have sufficient stock of eInk displays.

As mentioned, you can’t forget the tablet effect either, because at 200 US dollars, the Kindle Fire & Co have become affordable for the mass market audience in the U.S. for the first time.

However, E Ink Holdings remains optimistic. Sales are expected to rise back to previous levels in the second half of the year. It will be interesting to see if this forecast comes with new color eInk displays in tow.

But even if not, you shouldn’t overlook Europe as a growth market, because 2012 is the first year when there are extensive eBook (reader) offerings here as well. This suggests a significant growth can be predicted for the European markets, and accordingly, E Ink Holdings might indeed tread old paths once more.

In the distant future, however, things might get a bit tighter for E Ink Holdings. Not necessarily because of the tablet competition, but also because other manufacturers, like Pixel Qi and Qualcomm, want to bring ePaper displays to the market. So far, their attempts haven’t been particularly successful, but sooner or later, you’ll probably see their displays in one product or another on our market.