E-paper rivals in race to prove their innovations
boston.com
By Scott Kirsner, 2/3/2003
Back in the days when technology companies were still allowed to think big, E Ink and Gyricon Media, two competing start-ups with local operations, unveiled a very big idea: the last book.
Splashing ink on dead trees was on the way out, they said. The future was flexible electronic ''paper'' embedded with beads of electronic ink.
Your last book would also be your last newspaper and magazine -- a one-page volume that could present any piece of content you desired. Up to date. With high contrast for easy readability. And unlike your computer monitor, even when the power was switched off, you'd be able to see the characters and images on the page.
Now, the companies are hurrying to find smaller steps that will take them closer to that big goal. Their backers are leaning on them to prove that their innovations can create value in the marketplace, right now.
If the late 1990s were the era of lofty and exciting concepts, then 2003, says E Ink chief executive Jim Iuliano, is ''the year of commercialization.'' No one is willing to fund research projects anymore; investors want revenue-producing products.
Both companies say they've already secured enough financing to carry them through early next year. So they'll spend the rest of 2003 in prove-it-or-lose-it mode. If they can turn out products that generate interest (and significant orders), they'll get the next round of funding, and move closer to perfecting the last book. If not, this year could simply be the last chapter.
Cambridge-based E Ink sprang from research at MIT's Media Lab, and Michigan-based Gyricon is a spinoff of Xerox's Palo Alto Research Center, with a 10-person software group in Canton. E Ink has attracted $105 million in funding; Gyricon has banked less than that, though executives there won't be specific. Gyricon has about 60 employees, and E Ink has 75, down from a peak of 130 in 2001.
There's no love lost between the two. ''We've been very thrifty in hiring,'' says Geoffrey Greve of Gyricon's Canton office, implying that E Ink grew imprudently. E Ink general manager Russ Wilcox says, ''I doubt Gyricon will have a commercially viable product. It's an inferior technology, they're slower to market, and I don't think they'll be able to raise enough [funding] to achieve escape velocity.''
The companies take the same basic approach in trying to create an electronic version of the newspaper you're reading. Essentially, imagine two layers of plastic with a layer of tiny ping-pong balls inside. The ping-pong balls are black on one side and white on the other. An electric charge can induce the balls to rotate so that either the black or white side is facing up, creating dots on the ''paper.'' And once the charge is switched off, they stay in that position.
But E Ink and Gyricon will spend 2003 chasing different market opportunities.
Gyricon is concentrating on retail signage. The company concluded a test project at a Macy's store in Braintree last week. Thirty of its double-sided ''MaestroSigns'' were deployed in various departments. Using an in-store 802.11b wireless network, the pricing on the signs could be easily changed, for example, during a Saturday morning sale, and then changed back once the sale was over.
The signs used at Macy's are slightly larger than a legal pad, and while the technology inside them may be dazzling, visually they are deadly dull. Black letters on a gray background. No graphics, no animation, no color. As a result, Gyricon executives emphasize that they are focusing on informational signage, intended to convey price and product data, as opposed to flashy promotional signage, intended to persuade you to buy something you didn't know you needed.
Greve says the company expects to conduct more pilot tests with retailers this year, and will continue working with Macy's to prove MaestroSign's value. ''You get rid of printing costs, and labor costs for putting up and taking down signage,'' he says. ''Customers are happy when they get accurate prices for a product, and the retailer gains the ability to change signs dynamically.''
Gyricon will also work to improve the resolution of its signs, make the background whiter, and bring the price down. Right now, each sign costs several hundred dollars.
Unlike Gyricon, which has yet to start selling its products, E Ink sold two different types of electronic signage before deciding to withdraw from that market. One, called Immedia, failed when the wireless pager network on which it relied for updates turned out not to offer sufficient coverage.
Another product line, called Ink-in-Motion, resembled ''a paper form of neon,'' in Wilcox's words. It has been used in Target stores to advertise a Spalding basketball with a built-in pump, explaining with eye-catching, color graphics how the pump works. E Ink sold those non-networked, battery-powered signs for $20 each. But Ink-in-Motion was discontinued late last year because ''the cost to produce it and sell it and support it was higher than the cash flow we'd get in the near term,'' Wilcox says.
''Neither was a commercial success, but we learned a tremendous amount,'' says Axel Bichara, a partner at Atlas Venture in Waltham who serves on E Ink's board. One thing the company learned was that it ought to rely on partners in Asia for manufacturing, rather than doing it in Cambridge.
The company hopes to debut two products this year. One, to be sold in China, will be an electronic book reader, perhaps with two hinged halves like a traditional book and displays on both sides. (One of the benefits of E Ink's technology is that it requires far less power than a conventional liquid crystal display, and weighs about half as much.) Another product will be a ''wearable'' information display. E Ink executives are vague, but this could possibly be a new take on the digital watch.
Both Gyricon and E Ink know 2003 will be a crucial year for proving their technology.
''You can't be a concept company in this environment,'' Greve says. ''You have to get beyond `gee whiz,' and offer something useful at a price that's right.''
Says Iuliano: ''If I had to go back to the world and say that we're not ready, that we need another 24 to 36 months . . .'' He doesn't finish the sentence. It's unthinkable.
Scott Kirsner is a contributing editor at Wired and Fast Company magazines. He can be reached at kirsner@att.net.
This story ran on page C1 of the Boston Globe on 2/3/2003.
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