Kindling a Revolution: E Ink’s Russ Wilcox on E-Paper, Amazon, and the Future of Publishing
Almost as soon as Amazon released the Kindle e-book reader in November 2007, I settled in to wait for the Kindle 2. Like many other observers, I thought Amazon had made a good first stab at building a usable e-book device, but that it needed a sleeker profile, better ergonomics, new features such as text-to-speech capability, and a lower price point. Well, 15 months later, Amazon has thoughtfully delivered on most of my requests. From all accounts, the Kindle 2, which was unveiled on February 9 and began arriving on customers’ doorsteps this week, is such a giant improvement that it makes the first Kindle look like a clunky lab prototype. (Now if they’d only consider lowering the $359 price tag.)
But there’s someone who has been waiting a lot longer than I have for the Kindle 2, and for the huge buzz it’s creating around e-reading—about 11 years longer, in fact. It’s Russ Wilcox, co-founder and CEO of E Ink, the Cambridge, MA company behind the low-power, high-contrast “electronic paper” screen that is the Kindle’s main selling point. I had a chance to meet with Wilcox on Tuesday—and to play briefly with a Kindle 2, which had just arrived that morning. My first question was about whether any of E Ink’s founders thought it would take so much time, and so much money, to bring e-paper to the mass market.
After all, E Ink was launched in 1997, and has had to raise more than $150 million—mostly from big industry players like Intel, Motorola, Philips, Hearst Interactive Media, and Japan’s TOPPAN Printing—to transform e-paper from a drawing-board concept into a manufacturable product. Conceived at the MIT Media Lab, E Ink’s material consists of a layer of tiny fluid-filled microcapsules that contain positively charged white particles and negatively charged black particles. Applying a voltage across the microcapsules pushes the white particles to the top and pulls the black particles to the bottom, forming white pixels that are clearly visible without the backlighting needed in traditional liquid-crystal displays. Applying the opposite voltage across the microcapsules creates black pixels. The material is “bistable,” meaning the particles stay in place after a voltage is applied—which is why the batteries in the Kindle, the Sony PRS-700, and other devices with E Ink screens last so long.
It sounds simple enough, but Wilcox says the company spent six years getting the technology to the point where Sony could use it in the world’s first e-paper-based e-book reader, the Librié, introduced in 2004. And it’s taken another five years for Sony, Amazon, and their competitors to create e-publishing ecosystems that consumers are interested in inhabiting (meaning not just the devices, but the content available for them and the mechanisms for purchasing, storing, searching, and annotating that content).
So while E Ink has been happy to leave the media spotlight to Amazon this month, the Kindle 2 and the near-iPhone-scale excitement that has greeted it represent an important coming-of-age for the 100-employee company. It’s perhaps the first moment when the founders’ vision for a world of publishing sans paper has seemed feasible. E Ink continues to explore applications for its e-paper displays outside the realm of publishing—Wilcox and his team showed me examples like a remote key fob for high-end automobiles, a credit-card-sized one-time password device for logging into a secure computer network, and a decorative cell phone cover—but the company’s core mission, Wilcox told me, is to “provide the world’s best digital reading experience.” That means creating better displays for handheld e-book devices, but it also means designing larger screens—and eventually, color versions—that would be better for magazine-style or newspaper-style content.
There’s still a lot of uncertainty over the prospects for such technologies. Many potential Kindle buyers (myself included) are balking at the device’s steep price tag, and if Amazon comes out with a rumored tablet-sized version aimed at the college textbook market, it’s sure to be even more expensive. (When I asked marketing vice president Sriram Peruvemba whether E Ink is working with Amazon on such a product, his answer was “No comment.”)
But over the long term, Wilcox expects that simple economics will drive more and more print-media companies toward electronic platforms, and that E Ink will be there to scoop up their business. When Silicon Alley Insider calculated recently that the New York Times could save more than $300 million every year if it stopped printing and delivering its newspaper and simply gave every subscriber a free Kindle, it was with tongue firmly in cheek. But for Wilcox, such suggestions are deadly serious. “What we’ve got here is a technology that could be saving the [global print media] $80 billion a year,” he insists.
Below are some of the other interesting outtakes from my conversation with Wilcox.
On the early days of E Ink, and the importance of being naive:
I co-founded E Ink with three fellows out of MIT and with Jerry Rubin, the founder of Lexis-Nexis. I wrote the business plan in my study, and got copies bound at Staples, and mailed it out through Kinko’s, and all that. I did all the things you should apocryphally do when you’re an entrepreneur. At the time, we had no idea it was going to take so long. It may be that naivete is your friend when you’re starting out in such a daunting venture. We understood that it was probably going to take two years to make something that people wanted to buy. And in terms of making something that looked good, we did that. But what we didn’t see in the beginning, and learned over time, was that it would take another two years to go from something that looked good to something that would look good for many years under all operating conditions—in other words, to achieve stability and robustness. And then it would take another two years to get something that you could reproducibly manufacture, at an affordable cost point.
On finding a sustainable business model:
We went through the bubble bursting like everyone else. We had several different applications on the table. And we had to figure out how we were going to have a big impact on the world with a very small amount of cash. We came up with a grand vision of doing “radio paper”—a complete device and a service. [Essentially, the Kindle, but about eight years before it was feasible---Eds.] But it became clear that, even after spending $100 million, we still had work to do just on the display technology. We were diluting our efforts too much. So we turned to a business model where we would make the ink—a film of microparticles that would be the front part of a display—and we would sell that to the world’s display companies, who could drop it in on top of the same backplanes they use for LCD screens, turning their LCDs into e-paper. And more or less, that vision has held. We sell a component that allows LCD companies to become e-paper companies.
On the first Japanese e-book using E Ink e-paper, and the birth of the Kindle:
In 2004 Sony launched in Japan with the Librié. And it didn’t really work very well in Japan. Critics loved the hardware, but there were only 1,000 books available, and that does not make a successful publishing market. And it turns out that e-books are a tough sell in Japan because there is a thriving used bookstore market. People don’t have bookshelf space in their homes to store a lifetime of books, so they have this well-developed practice of returning books to used bookstores, so you can get any used book you want for a dollar. At the same time, people were getting used to standing on trains and reading on their little cell-phone displays. So between those two things, it was very hard to launch the Librié.
But Sony had the vision that if they added a bunch more content and brought it out in the U.S., they would have a product. And at the same time Amazon took note, and said, ‘Aha, the time might finally be right for e-books, if we were to tackle this as a service and sell the content.’ So the Sony PRS-500 launched in 2006 and Amazon came out with the wireless Kindle in 2007, and those guys have each progressively improved their products. From a business point of view, there were some tough times along the way. But since 2004, when we first saw the Librié come out in Japan, our revenues have doubled every year, because we have just been getting more and more devices out there.
On the latest technological improvements in the E Ink system:
For the upgrade from the Sony Librié to the PRS-500 we upgraded the ink. And for the PRS-700 and the Kindle 2 we have upgraded the electronics.
Making the ink better is all about the quality of the ink coating—the whiteness of the white and the darkness of the black in terms of pigments. It’s also about selecting the right ingredients so the ink can move quickly and hold its image accurately. You also want it to work well in the cold, withstand a certain amount of pressure, and be able to manufacture it at a reasonable cost, reproducibly, and find upstream suppliers who are reliable. It’s a very complex system design that combines chemistry, material science, electronics, optics, and mechanical engineering. It’s not trivial to put together, which is why it’s taken 12 years and $150 million.
One of the big advances for this generation is that we’ve developed a new method for driving the electronics—essentially, a new graphics card, the Broadsheet. The Sony PRS-700 and the Kindle 2 are the only two products that have it. It gives you the ability to do stuff like scrolling around more smoothly, and writing with a pen, and typing up to 200 words a minute, and showing enhanced grayscale images.
Broadsheet has the ability to, in parallel, update 16 different regions of the screen. Before, to get a dark area of the display to turn white, you would turn on your voltage for a period of time, maybe half a second. (If you want a shade of gray, you just turn it on for a shorter period.) During that time, the display would scan rows and columns of pixels serially, from top to bottom. [Before Broadsheet, in other words, changing any portion of the picture---scrolling through highlighted items on a pop-up menu, for example---required redrawing the entire screen.---Eds.] But the Broadsheet allows you to have 16 regions that you can define on the fly, and start the switching at different times. So instead of waiting for one scan to finish, you can start the next one, and stagger them, which gives you the impression of movement. The bottom line is that when you do this, plus some clever programming, you end up with animation and a much more interactive system, even though the native ability of the ink has not changed.
The result is that for both the PRS-700 and the Kindle 2 we have improved the user experience with faster navigation. You can more easily switch between titles. You can more easily navigate within a book to find the place you’re reading. You can more easily type the names of books you want, and make notes to yourself. Before, it was painfully slow to add annotations; now you can annotate as quickly as you can type. The other side of it is that you can now use the screen as an input device, for typing, touching, or pen writing. So you will start to see products on the market that let you write on the e-paper, just like a diary.
On the cost of the Kindle’s 6-inch e-paper screen:
We don’t disclose that. Our customers wouldn’t be happy with us. But if you want to buy a development kit and design your own device, it’s $3,000. With the development kit, you get everything that’s inside an e-book, including a little chip that runs Linux and a bunch of open source drivers, a touch screen with pen input, and the Broadsheet chip. People are doing all sorts of fancy stuff with that. There’s a fellow in Malaysia who has ported the Linux X Windows system to the device, and there are some folks on the West Coast who have ported Android to it. So part of what we’re doing is just making this open and trying to let lots of people find interesting uses for it.
On the fact that electronic paper is still far more expensive to manufacture than LCDs:
The beauty of E Ink technology is that by and large, what we’re doing fits in with the existing LCD industry. You do have the cost hurdle that you need to worry about, because E Ink has smaller production runs, against the billions of LCDs shipped every year. But we use a lot of the same components as LCDs, so as their cost comes down, we come down too. In the long term, you will see E Ink being similar to LCDs in price. And in the very long term, it should be cheaper than LCDs, because what you can do with E Ink that you can’t do with LCDs is manufacture them using a roll-to-roll process. If you ever want to make a billion of anything cheaply, you print it. We announced last year that we are working with Hewlett-Packard. They have set up a process to develop roll-to-roll, impact lithography printing of active-matrix panels. So they can print a backplane, and our stuff comes in on top. That’s five, seven, maybe 10 years away. So it’s clearly not tomorrow. But in the long term, E Ink should be very competitive on price.
On what’s coming from E Ink in the short term:
What you’ll see next is a great range of screen sizes. So far the industry has been using the 6-inch size, which has helped to drive down the cost for everybody, by consolidating on one manufacturing process. But we are starting to introduce displays that are in many different sizes. And you will see flexible displays going to market, at small volumes this year, but 2010 will be a big year for flexible displays. And then at the end of 2010, you will start to see improvements in the ink. We will have a whiter white and a blacker black, and we will start to experiment with color. You will probably see 2011 be the year of color.
All of those things will progressively broaden and deepen the applications. As you have flexible displays, you can do big displays and something that is much more like a newspaper experience, or in color so that it’s much more like a magazine. So we’ve taken on books, and we will extend to other types of formats over a relatively short period of time. There are a lot of mobile devices that could use a low-power, thin, plastic display, so you will see us in other types of devices as well. But our key focus and mission is to provide the world’s best digital reading experience.
On whether a consumer electronics company should be happy if its device works so well that it becomes “invisible” in the hands of the user [as Amazon executive Ian Freed told CNET in a recent interview]:
I think it’s a good thing. That’s what you want out of a book—you want to be projected into the author’s mind. That’s all about providing a great reading experience. So we take it as a compliment when you lose yourself in a book. Another kind of goodness is that the display shouldn’t break, and that it should be flexible, and that you should be able to read for a long time in your alternate reality without having to recharge. In that sense, our product is very visible, and we’re lucky our display is the face of the Sony and Amazon products.
On selling the same screen technology in Sony’s devices to Amazon, and then to other e-book makers:
We’re in a situation analogous to Nutrasweet enabling the diet cola industry. How do you sell Nutrasweet to Coke when you already have Pepsi as a customer? The answer is, “Very carefully.” We keep as neutral as possible. Our goal is to offer a platform that everybody can innovate on. And by and large, people are making very different product decisions and exploring the boundaries of what’s possible. No two companies have made the same device, they each have their pros and cons, and are good for some people and not for others.
On how e-paper can save the book industry:
Worldwide, the book industry is an $80 billion industry. If, by distributing electronically, they could save 30 percent on their costs, that would add $25 billion a year to their profitability. The newspaper industry is twice as large, and could probably save 50 percent. What we’ve got here is a technology that could be saving the world $80 billion a year. So we take the long view. This is a business problem that you could drive a truck through. So what we need to do is simply be a good supplier, provide a platform upon which others can participate, and provide an ecosystem where lots of companies want to gather.
On the future of newspapers:
The next big wave after e-books will be e-newspapers, enabled by the flexible screens in larger sizes. Then there will be a second wave of e-newspapers enabled by color. The benefit of that is that color enables advertising. The majority of print media is heavily subsidized by advertising, including almost all magazines and newspapers, so e-paper can’t really get to where it’s going until it supports advertising. Once that happens, you’ll see whole new business models emerging. We are still in the second inning of the ball game.