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Let me see if I have this straight.
I think what may have happened is that Barnes and Noble was developing a new e-reader that used a new screen from eInk. Somewhat late in the development cycle, B&N cancelled the project. Much of the engineering work for the screen had already been done, so eInk was likely able to offer the screen at a somewhat reduced cost (maybe just for the parts themselves without a development fee) and with a reduced lead time. Kobo came in and snatched them up.
I think one of Nate's points that many here don't understand is that companies like Kobo, Barnes and Noble, and perhaps even Amazon aren't really doing a lot of their own engineering work for these devices. Yes, they may design the externals and choose specifications, but I doubt they're hiring engineers to do GD&T on the plastics or PCB design. That's almost certainly all farmed out to other companies.
I've seen it happen in my industry where a customer will have a supplier start development on a product only to cancel it later on. Since the supplier has already done a lot of work, they're able to apply that to future products for other customers at a reduced cost. This actually happens a lot.
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