Que, a higher-cost e-reader marketed to business travelers, may be experiencing another round of delays. In a customer e-mail about a canceled Que order, Plastic Logic CEO Richard Archuleta declined to offer a new ship date. While the Que comes in $649 and $799 versions, the prices of other e-readers have been dipping precipitously, with both Amazon.com's Kindle and Barnes & Noble's Nook plunging below the $200 mark. The e-reader market is responding in many ways to the pressures exerted by Apple's bestselling iPad, which comes with an e-reader application and has a color screen.
Delays in rolling out Plastic Logic's Que, a higher-cost e-reader marketed
to business travelers and executives, have reached the point where customers'
preorders are being canceled. While other e-reader manufacturers have engaged
in a price-cutting war, with Amazon.com's Kindle and Barnes & Noble's Nook
both recently dropping below $200, Plastic Logic seems determined to sell its
product at a premium-a strategy that could very well be backfiring.
In an e-mail sent to a customer, who forwarded it to eWEEK June 24, Plastic
Logic CEO Richard Archuleta implied that the
Que had hit another roadblock.
"We've been working hard to bring the world's first product based on
plastic electronics technology to market-and have decided that delaying the
device a bit longer will result in [sending] a better product to you,"
read the June 24 e-mail. "With that in mind, we need to let you know that
since your unit will not ship on June 24 as planned, our automated ordering
system has automatically cancelled your order."
However, the e-mail added, "We do hope ... that you will stay
on our list of customers interested in knowing about our progress and details
of our upcoming product shipment." Archuleta then insisted that the device
will, in fact, eventually see a commercial release: "We continue to be
excited about the potential that our thin, light and shatter-proof ProReader
will offer to business users everywhere, and hope we can count you among the
first to experience this groundbreaking device."
Archuleta had previously sent an e-mail to customers in March, saying the
need to fine-tune the Que had delayed the device's release until summer.
This particular customer's Que order had been for $649.99. By way of
comparison, Barnes & Noble's original Nook device now costs $199, reduced
from $259 earlier in June, while Amazon's Kindle retails for $189. The Kobo,
which is marketed through Borders, sells for $149, and Sony's Reader Pocket
Edition sells for $169.
In a June 25 e-mail to eWEEK, a Plastic Logic spokesperson wrote: "Plastic
Logic has informed preorder customers they have decided to delay the device a
bit longer ... They continue to refine the product, its technology and features
and are anxious to get in the marketplace as soon as possible."
While e-reader prices have dipped, one analyst holds that there's a limit to
how low manufacturers can go. "With these cuts, ebook readers from Barnes
& Noble as well as Amazon now are priced at about the break-even level with
their Bill of Materials ... and manufacturing costs," iSuppli analyst William
Kidd said in a June 24 statement. "With zero profits on their hardware,
both these companies now hope to make their money in this market through sale
In that way, Kidd suggested, the e-reader market is emulating another
consumer-tech segment: "This is the same 'razor/razor blade' business
model successfully employed in the video game console business, where the
hardware is sold at a loss and profits are made on sales of content."
But unless the segment introduces another technological advance, such as
color e-ink screens, e-readers are unlikely to see a significant increase in
users, according to Kidd: "There is no visible short-term solution to
drive significantly more sales of e-book readers, except to use price as a
Plastic Logic seems to be avoiding the price-reduction strategy, however. In
a conversation with eWEEK at January's Consumer Electronics Show, Stephen
Glass, Plastic Logic's senior director of technical marketing, voiced the
company's rationale for selling a 4GB Que for $649 and an 8GB model for $799: "It's
a higher price point because it's a different demographic: customers who want
to read business documents."
Glass also pointed to the Que's ability to add comments, highlight text and
scribble on documents with a fingertip as another competitive differentiator. "The
rest [of the e-reader manufacturers] aren't doing that, at least in a way they
can annotate," he said.
In the interim, however, rival e-reader manufacturers have been introducing
new features for their software. In May, Amazon.com
updated the Kindle
to allow users to share favorite ebook passages with
other readers via Facebook and Twitter, zoom in on PDF documents, and organize
books and documents into specific categories. Around the same time, Barnes
& Noble added new features to the Nook, including the beta version of a Web
While the burgeoning e-reader market led a number of smaller manufacturers
to debut prototype devices at CES, many of those offerings have not hit the
market; the combination of Amazon.com's and Barnes & Noble's marketing
muscle with the debut of Apple's iPad may have made the e-reader marketplace an
unfriendly one for startups.
"I don't see more than two, maybe three dedicated reading companies in
the market for selling ebooks," William J. Lynch, CEO
& Noble, told The New York Times
June 21. "I think you are
starting to see a shake-out now."
Editor's Note: This
article has been updated with a quote from a Plastic Logic spokesperson.