E-reader prices will be going down to about $150 this year, claims Freescale Semiconductor INC. This semiconductor company, which produces processors for more than 90 percent e-book readers, is coming up with a new chip that they believe will bring down the cost of e-readers to just about $150.
What Freescale Semiconductors are up to is that they are in the process of producing samples of a new chip that will take over the functionality of all chips in an E-Reader under one, thereby reducing the manufacturing cost of the e-reader.
Freescale’s biggest customers, Amazon.com Inc and Sony Corp, who are dominant leaders in the electronic readers market, have predicted that e-readers will soon be able to take over paper books in the near future. What the company believes is that there’s a big unsaturated market for e-readers and price is the biggest hurdle in making a dent in this sector, something that can be redressed to a large extent with the advent of the new chip. While the company has sold as many as 4 million chips last year, they are optimistic of a two fold increase in sales this year.
This new chip can control the display functionality of the e-book reading device and help in removing features that are not used in an e-reader. The cost reduction will reduce by $30 if the older chips are replaced.
It will take the company about six months for the chip being sampled and added to the finished product before they are ready for sale. The company however, declined to comment on whether Freescale’s customers will be willing to sell devices on this new chip. The company also makes processors for the telecom and automobile industry.
Amazon’s Kindle is priced at $259 and $489. Sony’s devices range from $199.99 to $399.99. However the new entry Apple’s iPad, priced at $499 and $699 won’t see a change in prices as Apple uses its own designed chip rather than Freescale’s processors.
Amazon and Sony use the E-ink display technologies in their e-reader that makes the display to look almost like a real paper with ink. This functionality is supported by separate chips that control the display, which in turn, add to the manufacturing cost of the device. It also slows down the turning of the pages of an E-Book in the e-reader. This new chip will lead to a positive change in the entire functionality of the e-reader. Page turn times will come down to less than half a second from the over two seconds that it takes to turn now.
Freescale was acquired in a private-equity deal worth $17.6 billion by a group led by Blackstone Group LP, Carlyle Group, Permira Advisers LLP and the former Texas Pacific Group in 2006.
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