E Ink Holdings, best known for the screens found on the Kobo Aura, Kindle Paperwhite, and Nook Simple Touch, is raising some money. The company is selling 60 million new shares in a bid to get enough working capital to sustain its business.
The e-paper company has seen some dramatic loses in 2012 of around $25.4 million. The company axed its former CEO Scott Liu, who had been with the company since 2009. E Ink is in a state of flux, as the current climate of the e-reader market is not enough to remain profitable.
In order to sell more shares of the company, E Ink was showing off Seiko electronic watches, credit cards, and electronic shelf labels at an event in Taiwan. The company is hoping to diversify the number of products in its portfolio and reassure investors.
We have talked to a number of key people in the e-paper industry and they are drawing parallels between e-Ink and Neonode. Neonode once had 80% of the e-reader industry using its IR display screens. The first generation Kindle, Kobo, and Nook e-Readers all used this technology to power their screens. The biggest customer Neonode had was Amazon, which accounted for 40% of their business in 2011. Barnes and Noble was the second largest customer with 26%, followed by Sony at 21%, and Kobo with 11%. This amounted to a grand total of $5.8 million dollars earned in 2011. In early, 2012, the CEO of Neonode announced that it lost Amazon as a customer and then lost everyone else. Most of these companies switched to the capacitive touch screen technology and higher resolution that E Ink was offering.
The industry is worried right now that E Ink might meet the exact same fate as Neonode, and both companies have failed to remain relevant outside of the e-paper segment. Still, E Ink does have contracts with a number of large e-reader companies, and its business should be sustainable for the next twelve months. There will be a new Kindle, Nook, and Sony e-reader released within the next five months using the new HD displays.