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Thursday December 10, 2009
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 Look out, e-reader industry. Here comes Taiwan.
According to a statement released by the Taipei Economic and Cultural Office, the Taiwan Cabinet has approved $66 million (NT $2 billion) over the next five years to promote development of the e-publishing industry. The target: secure $3 billion (NT $100 billion) of e-reader revenues for Taiwan by 2013.
According to the Council, Taiwan Premier Wu Den-yih directed the Ministry of Economic Affairs to "assist enterprises involved in the production of
e-readers, including ultrathin 'e-paper' displays, to develop and
commercialize critical technologies, integrate resources and secure
patents."
The government, Wu Den-yih added, should help those e-readers "conform with
international and cross-strait standards so as to fully realize their
potential in the global marketplace."
The government will put forward a four-fold strategy, according to the statement: enhance the global competitiveness of Taiwan's e-publishing industry;
promote technological innovation to strengthen the industry's
"ecology;" encourage the expansion of Chinese-language digital content;
and foster a superior "digital reading society" among Taiwan's citizens.
Taiwan has already taken the first steps on that path after the maker of the Kindle, Taiwan's Prime View, agreed to acquire E Ink in November. As of now, E Ink holds a virtual monopoly on the technology at the heart of e-readers. BenQ has already shown off its own e-reader, and MSI and Asus are expected to announce their own devices, possibly as hybrid laptops.
There's
a cultural stereotype attached to Taiwan that's as much of a compliment
as it is a warning: put simply, when the Taiwan giants enter the
market, wave goodbye to margins. Taiwan excels in commoditizing a
market, which is typically great news for consumers.
The flaw
in this reasoning, however, is that the e-reader market has been driven
by content merchants. Imagine if Amazon made a set-top box. (TiVo has
raced down this path as well, but time is running out.) In this case,
Amazon and Barnes & Noble have built e-reader devices with their
own built-in networks and content delivery systems. The Taiwan
companies will either have to strike similar deals with American
content providers or merchants, or else restrict themselves to the
Asian market -- not a bad decision by any means.
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