Spurred by the growing popularity and strong sales of the Amazon Kindle and Sony Reader, Chinese manufacturers and content providers are rushing to join the domestic eBook market, with the device for reading text on electronic displays projected to become big sellers this year in the world’s most populous country.
Shipments of eBooks in China will reach 3.6 million units in 2010, up 70.7 percent from 2.1 million units in 2009, according to iSuppli Corp. By 2014, eBook shipments inc China will reach 17.6 million.
“Such a massive show of strength is likely to benefit the various participants of the eBook supply chain, including chip providers, OEMs/ODMs, platform vendors, content providers and telecom carriers,” said Loren Zhao, industry analyst for iSuppli’s China Research service. “Playing alongside global giants such as Samsung, Google and Foxconn, Chinese firms have entered nearly all nodes of the eBook chain except one segment—the critical area of displays, for which Chinese OEMs lack the technical know-how. Without representation in this key section of the supply chain, Chinese OEMs will not be able to attain greater profits in the eBook market, iSuppli believes, although they might possess the advantage of low cost and quick, flexible response to changing market conditions.”
Global and Domestic Chinese eBook Players
Among eBook display manufacturers, PVI E Ink is the dominant supplier of Electrophoretic Displays (EPD) to the China market, commanding more than 90 percent market share in 2009. The EPD is a sort of electronic paper or display technology that imitates the appearance of ink on paper.
Trailing PVI E Ink is AUO/SiPix, which has partnered with the Taiwanese OEM/ODM provider Qisda and Beijing-based Hanwang Technology. Despite holding down an enviable second place, AUO/SiPix will not be able to challenge the dominance of PVI E Ink in the foreseeable future, iSuppli predicts.
Other global EPD manufacturers that will supply to the China eBook market include the U.S. firms Plastic Logic and Qualcomm, as well as the Japanese entities Bridgestone Corp. and Fujitsu Frontech.
In another node of the eBook chain, the top providers of processors for eBooks—the so-called eBook chip providers—includes international giants such as Freescale Semiconductor, EPSON and Samsung, as well as Chinese providers like Ingenic and Anyka.
Amazon vs. China Mobile
Although Amazon has achieved great success with its Kindle eBook platform, an equivalent Chinese eBook service by the Seattle, Washington-based giant is currently not available in China. Instead, the G3 Reader by telecom carrier China Mobile seems to be the most possible platform provider of Chinese eBook services at this point in time.
iSuppli believes China Mobile not only hopes to be a mobile pipe provider—a role it already fulfills by being the world’s largest mobile phone operator given its customer base of more than 500 million—it also harbors ambitions to become a central player in the budding Chinese eBook industry. Already, the Chinese state-owned enterprise has established a mobile reading center in the country’s populous Zhejiang province on the eastern seaboard.
Overall, great hopes are riding on the eBook as the future technology of choice for reading in China, iSuppli believes. And while 5,000 years of traditional book reading will not be displaced overnight by the emergence of a newly popular device, the push for continuing wide acceptance of the eBook will likely go unabated. eBook players—global giants and domestic Chinese startups alike—will find it impossible to ignore the gargantuan revenue potential to be mined from a 1.4 billion subscriber market.
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