Taking a page out of the e-book

(Business 2.0 Magazine) -- Back in 2000, the handheld electronic book was thought to be as much a part of the future as MP3s, broadband video, and ad-supported websites. That year, Forrester Research predicted $251 million in sales of e-book content by 2005. It seemed a modest goal, but today the market is so small that Forrester doesn't even track it. Held back by a lack of available titles and stifling copy protection, the e-book reader gathered dust while other dotcom-era innovations flourished.

But one part of the stalled e-book industry could yet surprise us: electronic paper. At the forefront of the technology is E-Ink, a company spun off from MIT in 1997. E-Ink's thin film display functions as a screen and looks much more natural than its LCD counterparts. Instead of using standard pixels, e-paper contains millions of microcapsules that change color when an electric charge is sent through them - mimicking the look of real ink on real paper, without any backlight to hurt your eyes. The power required is negligible.

Right now e-paper is still married to bulky devices like the Sony Reader and the Motorola MotoFone, which use e-paper in their displays. But in the next three years, according to E-Ink, e-paper will become untethered. E-Ink customers like Samsung and LG Philips have already created 14-inch color displays nearly as thin as a piece of paper.

E-paper's success, says Lawrence Gasman, principal analyst at tech research firm NanoMarkets, "depends not so much on the technology as on designers coming up with cool stuff." In 2008, for example, U.K.-based Polymer Vision will launch the Readius, a mobile device with a flexible 5-inch e-paper display that unfurls like a scroll.

By 2010, look for stand-alone e-paper that plugs into your laptop to update its content. Eventually e-paper could display video and contain tiny Wi-Fi chips to update itself on the go. (E-Ink has demonstrated paper with limited Internet connectivity.)

If that makes you think of the moving, self-updating newspaper featured in the movie Minority Report, you're on the right track, says Kenneth Bronfin, president of interactive media for Hearst and chairman of E-Ink's board of directors. "The dollar you pay for your newspaper doesn't even pay the printing costs," he says. "If there was a device that newspapers could give consumers to eliminate the printing cost, the economics could really work." Sign up for a two-year subscription to an e-paper, he suggests, and you might get the device for free. E-Ink's profit in such a venture would be more than paper-thin.