Complementary Technologies to Successfully Commercialize
For any product to gain widespread diffusion in the market there are often complementary technologies which must also be developed. E-paper is no different. Four main areas have been identified. These are product specific problems, issues concerning delivery of the product to the consumer, education of both the consumer and business, and the support net.
|
Complementary Technologies |
| Product Specific |
|
| Product to Consumer |
|
| Education |
|
| Support net |
The first is the battery that powers the device. This is less important for products that do not change because of the bistable nature of the technology. However …
The boosting speed is another complementary technology that must be developed …
The third complementary technology in this category is the semiconductor chips. As electronic devices decrease in size, the corresponding semiconductor chips will too. The advancement of this micro-chip technology will be critical in enhancing sales. In the future, smaller chips or even nanotechnology may be important. Improved semiconductor technology is necessary for businesses to control multiple e-paper products. Wireless or satellite technology will be needed to increase the utility of e-paper in these circumstances. For example, if Walmart wants shelf pricing to be monitored or changed on e-paper labels, they will need a wireless system throughout the store to transmit the data to all e-paper labels. Or if an advertiser wants to change a message on all buses throughout the country they may have to use satellite technology to communicate that message to all e-paper displays. A restaurant …
Additional complementary technologies must also be developed that enable the manufacturer to deliver the product to the customer. Fortunately, e-paper has low investment costs and does not require an expensive production line. The packaging and shipping requirements are also not very strict. This is due to the flexible nature … It will also be necessary to educate both consumers and businesses. This technology is a relatively difficult concept to understand. It is not unreasonable to assume many potential users will have many questions as to the exact nature of the product. Due to the uniqueness of e-paper, education is going to be crucial for successful commercialization. It is also necessary to construct a good support net for this product. A support net is necessary …
Strategies to Commercialize
There are a variety of potential applications and an assortment of markets for e-paper. This is attributable to the versatility of the technology. One of the major segments this product can be applied to specifically is the publishing industry, but in general, any type of printed material. This includes e-newspapers, e-books, electronic shelf labels, restaurant menus, electronic road signs, advertisements and more. The successful commercialization of this product into other market segments is going to be dependent on its success in the segments that it has already penetrated.
Currently, the best selling products that utilize e-paper are e-books such as the Amazon Kindle. E-books offer many benefits to their consumers; however, they have not reached widespread use.
|
Advantages & Disadvantages to e-books |
|
|
Advantages |
Disadvantages |
|
Searchable |
Digital Rights Management (DRM) issues |
|
Easy to cross-reference |
Hardware/software failure |
|
Lightweight |
Less enjoyable reading experience |
|
Resizable text |
Compatibility issues |
|
Hands free |
|
|
Easy to duplicate |
|
|
Environmentally friendly |
|
In addition, many consumers are unfamiliar with the technology, prefer the feel of a traditional book, or believe the cost of the readers is too high. It may be difficult for e-paper readers to supplant traditional books.
We believe that students would be more open to using devices such as the Amazon Kindle to read textbooks. There are over 500 million students currently in primary and middle schools in the United States (“Paper-like Display…”) …
The revenues from this first commercialization opportunity will then go toward a second area: advertising, particularly advertising that will be viewed mostly during the day. The billboard and sign manufacturing industry had revenues of $12.3 billion in 2008 and has grown by an average of 1.5% per year since 2004 (“Billboard and Sign…”). Exports have also been increasing, particularly to the developing world. Because e-paper is such a new and high-tech product, it’s likely that developing countries will have difficulty replicating the technology in the near future. E-paper manufacturers may be able to increase market share in the developing world for some time.
E-paper has several features which makes it attractive in outdoor advertisements …
… Non-electric screen-printed and non-screen-printed signs make up 47% of the market (“Billboard and Sign…”). E-paper has many advantages over digital signs as well and digital signs make up another 23% of the market. Digital signs require backlighting to be seen, and are difficult to view if there are strong environmental rays. This is why LCDs and other digital signage are difficult to view outside on a sunny day. E-paper does not require backlighting and …
… The technology does have certain disadvantages …
In the advertising situation …
We feel that advertising is a potentially huge market for e-paper. Currently, the biggest hurdle in this area is the fact that e-paper only produces black-and-white images. If e-paper technology progresses as hoped and can produce color, it could easily be used in any type of outdoor advertising. Even black-and-white e-paper could be very useful in many advertising situations. For instance, e-paper could be used in interactive posters to give daily, hourly, or real time updates at sports events, concerts, or airports where signage may need to change frequently …
… Both large-scale advertising and store label uses of e-paper would require complementary assets to be in place. The stores or billboards would have to be set up to accommodate e-paper and installed so that the thin battery and wireless receiver that allows updates would function properly. In addition, a maintenance force would have to be trained to service or replace the signs if they break down. Alternatively, e-paper companies could partner with another established electronics service firm to provide service to e-paper signs. Because the technology is very stable – once images are updated power is not required to hold the image and the image does not decay – it’s unlikely that there will be a great need for repairs. Once the technology has been placed in these markets, economies of scale should bring the cost of e-paper down to the level where replacement signs or labels are relatively cheap. If a sign is ripped, damaged, or somehow lost, the buyer can easily replace the label. Better yet, advertisers could have a supply of labels in place to cover any that are damaged. They would then only need to set up the wireless updating system to account for the new signs.
Once these commercial applications are in place, e-paper companies should have enough revenues and production capacity so that e-paper will be cost effective enough for disposable consumer uses. Eventually, e-paper can replace traditional paper for newspapers and periodicals. In today’s 24 hour news environment, once a day newspapers are becoming less convenient as internet news is available via mobile devices. E-paper newspapers could continuously update with the latest breaking news, stock quotes, sports scores, and other information. E-paper magazines could update themselves frequently instead of having to print and send new magazines once ever several weeks. This would allow e-magazines to better compete in today’s environment.
This technology could take one of two paths …
Funding Requirements and Sources
Funding for a new technology can come from several sources. “Most upstarts initially get funded through friends and family, bank loans and credit card debt” (Deagon, “Startups”). However, e-paper will have costs beyond this scope. The amount of funding will be similar to a chip company and a chip company typically needs “$60 to $100 million in venture funding to emerge as a healthy adult” (Deagon, “Startups”). We’ve calculated that with an initial 20 million dollars an e-paper company could produce prototypes of sign advertisements for buses and e-paper billboards to begin marketing and selling to customers.
Primary targets for funding will not be through loans and this type of debt because revenues may be low or unstable in the early years, which will raise fears of default. Debt also has the drawback of higher risk premiums that investors require from riskier technologies like e-paper. The yields on risky bonds like this would equate to usury and thus an equity stake is the most sensible option, except in recessionary times … Typically, for “a $5 million investment in a company you could get 20% ownership…Today, you can get 35% due to the tougher economic climate” (Deagon, “Silicon”) …
Conclusion
E-paper’s future is uncertain. While there are various markets that e-paper has the potential to transform, it is still unclear whether this technology will be a viable substitute in markets where fairly recent innovations have been established, such as LCD technology. There is also the potential that e-paper is a transitory technology, similar to that of mini-discs in the digital music industry. Yet, even with these uncertainties, e-paper, specifically flexible e-paper, has many advantages that cannot be replicated easily. Crucial to getting e-paper into mass production and achieving widespread commercial success will require the adoption of users in certain markets, particularly by those in education. As the technology is developed further, markets currently unavailable may open and create further value for e-paper’s various attributes. Flexible e-paper or a similar technology, with proper funding and the right investments, will change how we communicate through virtually any medium.
This concludes my posts about the commercialization of e-paper. I left a few sections and pertinent points out of this final post. For additional information or to gain a more thorough understanding about the obstacles and potential implications that the commercialization of e-paper faces, please email or contact MoyerWallace Communications. My next few posts will detail a case study that was created by our team after an in-depth analysis of the newspaper industry’s current business model. Not only have we detailed the problems that are facing the industry as it tries to revamp its business model, but we lay out a plan that small, medium, and large publishers can follow in order to develop long-term and sustainable revenue streams.
Works Cited
“Billboard and Sign Manufacturing.” U.S. Industry Report. 7 July 2008. 28 Nov. 2008. http://www.ibisworld.com/industry/default.aspx?indid=902
Deagon, Bryan. “Startups Find Funding Scarce As IPOs Dry Up, Takeovers Fall .” Investors Business Daily, Oct. 2, 2008. Pg. A4.
“Paper-like Display Industry Report, 2007 (Chinese Version).” ResearchAndMarkets. June 2007. 2 Nov. 2008. http://www.researchandmarkets.com/reports/497715/paper_like_display_industry_report_2007
