Is Electronic Paper The Future

January 13, 2006
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ANN ARBOR — The Stephen M. Ross School of Business at the University of Michigan recently became one of the nation’s first organizations to adopt the use of electronic paper when it deployed a sign system developed by Ann Arbor firm Gyricon.

For U-M, the firm’s patented technology proved an overwhelming success. But nonetheless, two months later Gyricon was defunct.

“It’s kind of sad,” said Edward Adams, the school’s chief technology officer and director of computer services. “It was really very good technology.”

Gyricon’s SmartPaper consists of a thin sheet of plastic containing row after row of beads that are black on one side, white on the other. When a small voltage is applied, individual beads flip over to form a pattern. A crude, magnetic version of this is used in the Etch A Sketch drawing toy.

At Ross School of Business, the electronic signs were installed outside each classroom, detailing a calendar of events specific to the classroom and administered through a Wi-Fi network. The system not only identified classes, but also advertised events, seminars and labs. The signs are powered by eight D-cell batteries, which last six to eight months.

“The beauty of the signage, from my perspective, was that you could install the signs anywhere,” said Adams, who toured the Gyricon plant last year. “Sending the information was very straightforward. Once the little beads were flipped, it didn’t require a constant power source.”

The signage matched the décor throughout the school’s old and new buildings. It relieved staff of the responsibility of printing and posting fliers. Most importantly, the system was much cheaper than comparable technologies such as LCD monitors and plasma screens, which can run from $5,000 to $8,000.

“You can’t mount a plasma screen outside of every classroom,” Adams said. “That’s an expensive option we can’t do. And it’s such a labor intensive thing to have someone go around to 25 classrooms every morning and post the day’s events.

While Gyricon may have been a hometown hero in Ann Arbor, its parent company, Xerox Global Services, was not satisfied with the young firm’s performance. Last month, it reabsorbed the company and its patents.

“There is a drive toward reducing the cost and improving the longevity of certain content that, by its very nature, if you burn or crumble up a piece of paper, whatever is on it is gone forever,” said Bob Kreha, vice president of projects at NuSoft Solutions in Grand Rapids.

Before joining NuSoft Solutions, then SageStone Consulting, in 2004, Kreha was a managing consultant at Xerox. One of his duties involved overseeing certain aspects of Xerox’s research centers.

Xerox is among the world’s elite research and development organizations. Its Californian and European research centers are world famous, and the company has groups devoted solely to determining which inventions are worth selling and which it should give away for the greater good of the world. As Kreha noted, the group has perhaps the worst track record in modern business — it was Xerox that gave Microsoft and Apple the framework for the Windows and Mac operating systems.

While there are several business models for the development of electronic paper, Xerox believed the value proposition was in signage.

“Say you print a flier up, even announcing that you lost your dog,” Kreha said. “You post it all over the neighborhood, and then your cell phone number changes. All those posters are essentially obsolete.”

This highlights one of two principal shortcomings of paper, Kreha explained. First, it is difficult to separate the content from the physical piece of paper — the driving force behind Xerox’s copier business. Second, as seen in the signage problem, it is difficult to change the content without starting over.

This is a situation that has plagued retailers since the start of the electronic age. Some retailers, such as Kohl’s, have experimented with using watch-sized LCD screens as price tags for some items. But that would be prohibitively expensive to implement throughout a grocery store. Gyricon hoped to develop a more cost-effective product.

“It’s ironic,” Kreha said. “They decided it was just too expensive. But I think they knew it was all along.”

The U-M signs cost $700 each. The cheapest piece of Gyricon electronic paper, Kreha believes, was $300.

Xerox also experimented with using its electronic paper as a content delivery system, akin to an electronic newspaper. With its size and cost, Kreha said, that product did not prove a viable alternative to a laptop computer.

The E Ink Corp. and LG Phillips LCD recently announced a 10.1-inch flexible electronic paper display that is as thin and flexible as construction paper with similar energy requirements as the Xerox system.

At last week’s International Consumer Electronics Show in Las Vegas, Sony announced that its new Sony Reader will be based on this technology. At roughly the size of a paperback novel, the Reader’s largest selling point over a handheld computer is that its paper-like display does not cause the fatigue associated with reading a backlit display for extended periods. The price should be comparable.

In a recent interview with The Washington Post, E Ink CEO Russ Wilcox argued that by 2015, newspapers will be distributing electronic paper displays to readers. Newspapers currently spend $150 per reader, per year, on printing paper, he reasoned, so it would be cheaper to distribute a $300 device that can last several years.

In another, related announcement, German electronic giant Siemens AG claims that it has developed a system of placing miniature displays on consumer goods packaging, including cereal boxes and medicine vials, with a resolution of 80 dpi. It hopes to have this product to market next year, at a cost of 15 cents per square inch.

Kreha has doubts that any electronic paper product will supplant the use of paper. He is skeptical that it will become price effective within the next decade, and philosophically, people may just prefer paper.

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