E Ink Holdings Inc (元太科技), which supplies e-paper displays to Amazon and Sony Corp, said quarterly revenues broke a new record again last quarter after clients launched new products, including a tablet device that drew a positive market response.
Revenues rose 33 percent to a historic high of NT$4.6 billion (US$150 million) last month, from NT$3.47 billion in August, bringing the third-quarter revenues to NT$10.92 billion, a spike of 58 percent from NT$6.93 billion in the second quarter.
Growth momentum this month would be even stronger than last month, company chairman Scott Liu (劉思誠) told investors on Aug. 23. About 70 percent of E Ink’s revenues came from e-paper displays.
“Our major customers launched several high-performance and sleek products at affordable prices to cope with the weakening global economy. Those products have stimulated demand,” Liu said in a statement released yesterday.
One of E Ink’s major customers launched a tablet device with a consumer-friendly price tag that created a buzz with those who pre-ordered the product.
On Wednesday last week, Amazon debuted its first tablet device, the Kindle Fire, at US$199, which is 60 percent cheaper than Apple Inc’s iPad 2, which sells for US$499. Citigroup forecast Amazon would ship 4 million units of the product by the end of the year.
“The tablet device is equipped with a [LCD] display made by E Ink’s Korean affiliate Hydis ... We expect the strong sale of the tablet device to give an extra boost to E Ink’s revenues and profits,” Liu said.
Liu reiterated that sales of tablet devices would not eat into e-reader sales, given their differences in features and target users.
E Ink made a much lower margin from its LCD panels, compared with e-paper displays, where E Ink enjoyed better profit because of its leadership status in the industry, Liu told investors. Gross margin was expected to slide to about 30 percent last quarter from 32.5 percent in the second quarter after customers increased orders on lower-margin LCD orders, he said at the time.
Liu said he was optimistic about the fourth quarter based on what customers’ messages indicated, and many customers tend to prepare launching new products by year-end.
Along with the Kindle Fire, Amazon also launched three new e-readers with prices ranging from US$79 to US$149 on the same day.
Liu revised his forecast for global shipments of e-readers slightly upward to between 25 million and 30 million units this year, from his prior estimate of the 20 million to 30 million range. That would be 1.5-times or two times the growth from last year’s 10 million units.
Shares of E Ink jumped 3.58 percent to NT$63.70 yesterday.
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