PVI: E Ink panel sales up, but cautious outlook

[Alexander Turcic]

PVI's sales of E Ink panels in June have at least partially recovered from the previous month's low. However, compared to one year ago, total sales is still down by a worrisome 33 percent, according to Digitimes. And although the third quater is usually high season, PVI remains cautious about the overall small- to medium-size panel market.

Color me skeptic, but considering that PVI is still the major (only?) provider of E Ink displays, the declining numbers in panel sales do not seem to agree with the projected numbers of e-book devices sold, as provided by various upbeat analysts.

Your opinion on this one?

[LazyScot]

I agree it isn't good news, but it is not necessarily as bad as it looks.

First off, it appears (from yahoo) that the dollar has fallen by about 10% against their currency, which will account for a fair bit of the drop (I'd expect most things to be US dollar priced...).

Next, I thought that they made other products besides E-Ink displays -- it could be that the drop is on other products. We just don't know enough to guarantee that the drop is all down to the E-Ink displays.

The Year to Date seems roughly equal. I don't know the periodicity of their order cycle (from just one year's information). If they are still expecting a 20% drop, I'd guess that they still have some decent orders expected.

Finally, they say:

as demand for niche products, including electrophoretic displays (EPDs), picked up

and

weaker-than-expected demand in the small- to medium-size panel market

which makes me think that their E-Ink displays are doing rather well....

But then, as I've said before I'm an optimist so the truth might be different!

[Mycropht]

IMHO, the present generation of the E-ink based readers is still inferior in some aspects. A present generation of a product (paper books) cannot be replaced by an expensive electronic gadget offering similar functionality. Btw, Jeff Bezos can claim whatever he wants about the Kindle sales but I read that cum grano salis, especially because the Kindle is ugly. If Jeff has a problem with taste, maybe he has also a problem with sincerity.

Personally, I am waiting devices based on the new Epson controller S1D13521. The Broadsheet AM300 EPD Prototype Kit looks impressive (I have seen a video) and my hopes are high for an affordable device with usable pen based navigation and no physical keyboard. For moderately rare occasions when I will need the keyboard (dictionary lookup, text search), I want it to pop up in a window. When someone makes such device, we will see about the E-ink panel sales.

[vivaldirules]

Down from a year ago? The only widely sold user was the Sony, right? Add that to the Kindle and sales should have increased, shouldn't they? Or all the other devices that use these things significant - and decreasing? I don't get it.

[kaas]

Please don't forget the time delay between ordering, receiving the shipment, building the devices and selling them. Since I somehow can't imagine that ebook producers use jit procedures, we could very well see now displays ordered in 07...
cheers,
kaas

[chef]

Originally Posted by LazyScot

I agree it isn't good news, but it is not necessarily as bad as it looks.

First off, it appears (from yahoo) that the dollar has fallen by about 10% against their currency, which will account for a fair bit of the drop (I'd expect most things to be US dollar priced...).

Next, I thought that they made other products besides E-Ink displays -- it could be that the drop is on other products. We just don't know enough to guarantee that the drop is all down to the E-Ink displays.

The Year to Date seems roughly equal. I don't know the periodicity of their order cycle (from just one year's information). If they are still expecting a 20% drop, I'd guess that they still have some decent orders expected.

Finally, they say:

and

which makes me think that their E-Ink displays are doing rather well....

But then, as I've said before I'm an optimist so the truth might be different!

Of course they make displays other than E Ink. They make LCD displays too. If you look at "Small- to medium-size LCD panel shipments miss 2Q targets" (7/10/08), you will notice they are expecting those sales to be off 30%. I can guarantee you their LCD sales are a huge portion of their overall sales right now. That is the larger story because its a) a bigger drop than in EPDs, and b) a drop in a well-established market. May be E Ink is actually starting to cut into LCD sales which is both good and bad for PVI. They are starting to go through the conversion process and as usual, it will be a bumpy ride.

To explain the variability in the monthly sales numbers, maybe things were a little front-end loaded. They ended the 1st quarter of 08 with 44% year-over-year growth. Especially in Feb 08, they had 73% y/y growth. Maybe things wouldn't look so bad relative to each other if the sales numbers were a little more spread out. Obviously there is a slowdown due to the economy or some other reason but they still currently have 6.5%y/y growth through the 1st half of 2008 even with the bad numbers of the 2Q.

I wonder how this would look if the currency conversion was normalized over the length of time.

[jerryleejr]

Could it just be that supply has finally caught up with Demand?

[Alisa]

Originally Posted by jerryleejr

Could it just be that supply has finally caught up with Demand?

It seems likely to me at least at this price point. I've met quite a few people who would like one but aren't quite ready to pay what they cost right now. I have another board I hang out on (not book-related) where the Kindle has come up in discussion quite a few times. A few of us own them but many, many more have said they would like one but either can't or won't pay the current price.

[Argel]

Originally Posted by Alexander Turcic

Your opinion on this one?

I'll repeat what I said the last time this surfaced:

But seriously, I'm not sure that the figures quoted say much about the potential ebook market. The original story lays the blame for the fall in production mainly at the door of a fall in demand for hand-held devices (not ebook readers) in China. At this moment the Shanghai stock exchange stands at half its peak in 2007, so it wouldn't be surprising if discretionary purchases like e-ink devices were taking a hammering.

Until we have a proper analysis of the proportion of their business devoted to e-ink and the proportion of e-ink panels destined for ereaders, gross sales figures don't tell us much - if anything at all - about ereader sales.

It could well be that ereader sales are soaring but they are not sufficient to outweigh the collapse of other sales. Or not.

[chef]

Originally Posted by Argel

It could well be that ereader sales are soaring but they are not sufficient to outweigh the collapse of other sales. Or not.

Exactly, kinda. Replace "ereader" with E Ink and I think that explains it. I mean they did say PVI saw an increase in E Ink sales, but it wasn't enough to overcome the overall drop across all product lines.