A Kindle Killer?

The race to win over bookworms with digital ink may no longer be a two-horse race.

One of the products being demonstrated during this week's DEMO conference is an electronic tablet by British chipmaker Plastic Logic. The unnamed prototype uses the same E Ink display technology as Sony's (NYSE: SNE  ) Reader and Amazon.com's (Nasdaq: AMZN  ) Kindle that makes reading soft on the eyes. It may hit the market as early as the first half of next year.

Do we really need another e-book reader? Well, Plastic Logic's device differs in that it offers a bigger display than its more compact rivals-to-be. With essentially the same dimensions as a notepad, the new gadget offers a letter-sized screen, which may make it more suitable to read newspapers and magazines that are delivered wirelessly.

The chances of it changing the world and slaying the Kindle? Unlikely.

Sony has been at it for a couple of years now. Amazon has the online-store ecosystem that encourages self-publishing and is already selling digital subscriptions of popular dailies like New York Times (NYSE: NYT  ) , Washington Post (NYSE: WPO  ) , and News Corp.'s (NYSE: NWS  ) The Wall Street Journal. There are also smaller players like Franklin, Etaco, and iRex in this market.

A rookie is going to have to offer more, especially because Amazon is already admittedly working on new and improved versions of Kindle, which it started selling last year. With Amazon's dreams of entering the education market likely requiring a larger display to render textbook graphics accurately, you can't butt heads with the country's leading online retailer unless you're at least two steps ahead of it.

The only way to make a dent in Amazon -- or Sony for that matter -- is to create tablets so cheap that newspaper companies can subsidize the costs by sending them out to their willing subscribers, knowing that they will make that up in interactive advertising. Because print and delivery costs make up the lion's share of a newspaper's operating overhead, this may actually make sense. However, what's to stop Amazon from striking similar "free Kindle" deals where e-book readers become the new "free wireless handset" for customers who commit to two-year contracts?

A New York Times article detailing Plastic Logic's device points to the eventual future when E Ink's black-on-white display gets colorized and ads are clickable and multimedia. Cool, right? Just like a high-tech version of those Harry Potter movie newspapers, no?

Psst. We have that already. It's called the Internet. With laptops becoming even more portable, cheaper, and wirelessly accessible, isn't tomorrow already here?

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Longtime Fool contributor Rick Munarriz has been shopping online for about as long as Amazon.com has been in business. He owns a Kindle. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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