Neonode is best known for their IR touchscreen technology that mainstream e-readers employed, before most of them gravitated towards capacitive touch. The Amazon Kindle Touch, Kobo Glo, Sony PRS-T1 and similar models all employed Infrared sensors alongside the bezel. This provided these companies a dramatically affordable way to incorporate touchscreen technology into e-readers that were at war with each other over lower prices. The rise and fall of Neonode reads like a textbook of the e-reader industry as a whole.
Neonode is a publically traded company and files all of their financial information on a quarterly and yearly basis with the SEC. Their accounts receivable info reads like a textbook on the rise and fall of the e-reader industry. In 2010 the company garnered a paltry $200 thousand and the companies fortunes spiked dramatically in 2011 with over $3.3 million in licensing fees. Revenue dropped by over a million in 2012 when they earned $2.1 million and in 2013 they received $1 million.
This yearly financial returns are not indicative to just the eBook reader industry, as they have their hands in cell phones, tablets and a number of other enterprises. When it comes to e-readers in 2011 they had eleven contracts signed with the whos who of industry. This included the Sony Pocket Edition, Sony Touch Edition, Daily and the PRS-T1 model. Other notables include the Kobo eReader Touch and Barnes & Noble Simple Touch Reader. In 2012 Amazon accounted for 46% of their revenue, followed by Kobo at 16% and Sony at 14%. During 2013 Neonode lost Amazon as their primary customer and instead is leaning on Kobo (19%) Leapfrog (16%) and Sony (15%) for their e-reader revenue. Finally in the first quarter of 2014, Leap Frog is their biggest customer (30%) followed by Sony Corporation (16%) and older Kobo devices (11%).
Kobo is using their older Glo and Touch Screen e-readers in their efforts to expand into international markets, because of the lower price point on outdated components. Sony on the other hand have all but bowed out of the e-reader industry with the total abandonment of their Sony Reader bookstore in North America, Europe and Australia, but still sell the PRS-T3 in many retail environments. Leapfrog primarily sells kids tablets in retail stores like Toys R US and bigbox stores.
Neonode Z-Force technology is currently being phased out by many of the other eBook vendors in the world. Amazon, Kobo, and Tolino are all employing capacitive touchscreen technology and therefore not paying Neonode licensing fees. The lack of income is not stopping them from spending $1.8 million in the last three months, compared to $1.6 million for the same period in 2013. This has led to contracts with HP for multisense touchscreen printers and developing patents for virtual keyboards.
What is the future of Neonode in the e-Reader industry? Likely they are abandoning innovation in this sector and instead are focusing on zForce AIR Technology for phones, zForce NEMO Technology for 100% Waterproof Devices and MultiSensing technology for in-car systems.
Michael Kozlowski is the Editor in Chief of Good e-Reader. He has been writing about audiobooks and e-readers for the past ten years. His articles have been picked up by major and local news sources and websites such as the CBC, CNET, Engadget, Huffington Post and the New York Times.