Plastic Logic Postpones E-Reader Launch, Citing ‘Changing’ Market

Some of the earliest developers of e-readers are falling by the wayside as the U.S. market increasingly is dominated by more recent Kindles, Nooks and iPads. Plastic Logic, an early developer of plastic semiconductors and displays, shelved plans for the Que proReader (CED Jan 8 p2) after several delays as it works to develop a second-generation device, the company said.

Meanwhile, there were reports that Plastic Logic was in discussions with Russian nanotechnology company Rusnano about an investment that would give it control of the U.K. company. Rusnano’s funding also was conditioned on production of Plastic Logic’s e-reader displays moving to Russia from the company’s Dresden, Germany, facility. Plastic Logic started sample production of 10.7-inch flexible electrophoretic displays using 780x550mm substrates in 2008 (CED May 22/08 p4) at the Dresden plant. The German government covered about one-third of building costs of the plant, which was to have annual capacity for 1 million units.

Rusnano is said to have Russian government backing for relocating production. Russia will spend up to $10.6 billion on nanotechnology by 2015, President Dmitry Medvedev said last year. The Chinese government also is said to have approached Plastic Logic about providing capital, but the two sides didn’t reach agreement. Samsung also was said to be among those interested in buying a stake in Plastic Logic. Plastic Logic has raised $100 million since 2006 to fund construction of the Dresden factory and production from investors that include Oak Capital and other venture capital firms, BASF and Intel. OLED materials developer Cambridge Display Technology (CDT), which was sold to Sumitomo, also was an investor.

"We are fortunate to have investors who are confident and committed to our company’s long-term success in commercializing plastic electronics,” Plastic Logic CEO Richard Archuleta said in a statement. Plastic Logic officials weren’t available for comment Wednesday on Rusnano’s possible investment in the company.

The proReader, which featured a 10.7-inch screen with 1,280x960 resolution, was to be sold through Plastic Logic’s Que.com website and Barnes & Noble’s online and retail stores, in 4 GB ($649) and 8 GB ($799) flash memory configurations. The high-end version was to be compatible with AT&T’s 3G network and feature built-in Wi-Fi and Bluetooth.

While Plastic Logic believed its focus on selling Que proReader to business customers would separate it from lower-priced fare from Barnes & Noble, Amazon and others, the e-reader market has “changed dramatically,” Archuleta said. Much of that change has been led by entry-level pricing, which plunged to $199 earlier this year and more recently hit $139 for a Wi-Fi-equipped Kindle. Plastic Logic originally targeted shipping the Que in April, postponed it to June 24 and then dropped timing altogether.

"We plan to take the necessary time needed to re-enter the market as we refocus, redesign and retool for our next generation ProReader product,” Archuleta said. “With the product delays we have experienced, it no longer makes sense for us to move forward with our first generation electronic reading product. This was a hard decision, but is the best one for our company, our investors and our customers."

While product plans were put on hold, Plastic Logic is “continuing to actively advance” its technology at labs in the U.K. and the Dresden facility, Archuleta said. The company’s plastic electronics technology has many “economic, manufacturing, form factor and environmental benefits” and it will “replace silicon in a variety of devices in the future,” he said. It wasn’t clear whether Plastic Logic, which was said to be struggling for funding, would cut any jobs at the Dresden factory or its U.S. headquarters in Mountain View, Calif. Plastic Logic officials weren’t available for comment.

Another early e-reader developer, iRex Technologies, also is restructuring its business in the face of a changing market. IRex, which launched sales of the DR800SG e-reader on Bestbuy.com in February, filed for bankruptcy protection in the Netherlands earlier this year (CED July 1 p2).