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Peter Larson
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A humble engineer and family man. Never been to Wall Street. Not psychic or anything. The idea behind DCFHub: I realized one day that it is possible to automatically calculate and track a net present value for just about every stock by simply plugging the analyst consensus growth estimates into... More
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  • How Amazon May Already Be Copying The Upcoming Nook 0 comments
    Aug 11, 2012 9:28 PM | about stocks: BKS, AMZN

    Gizmodo is reporting that Amazon (NASDAQ:AMZN) may be releasing new version(s) of the Kindle as early as next week. I agree, so it's time for some hardware speculating!

    I'll take a round-a-bout approach toward Kindle speculation by first figuring out what the competition is doing. There's a reason for this- take a look at the historical pattern:

    • In May 2010, rumors began surfacing about a Wi-Fi Kindle. That product wasn't released until that fall, but in July 2010 Barnes and Noble released the Nook Wifi.
    • In September 2010, rumors began surfacing about a Kindle Tablet. That product wouldn't be realeased for almost a full year, but in October 2010 Barnes and Noble released the Nook Color.
    • Then in May of this year, rumors began surfacing about a Frontlit Kindle. That product still doesn't exist, but in October 2010 Barnes and Noble released the Nook Glowlight.

    If you are wondering how Amazon seems to know what the competition is up to before it is even announced. You can find the answer on Linkedin- multiple ex-nook employees now work at Lab126.

    On to the current projects. It was reported last month that Barnes and Noble (NYSE:BKS) is working on a "revolutionary new screen technology" for the next version of the Nook.

    Now, this may seem like a bit of an odd statement: what could make a screen revolutionary? Something Microsoft related? A flexible screen? Does it automatically de-roll analyst's eyes when they use the phrases "revolutionary technology", "Barnes and Noble", and "credible" in the same sentence?

    My belief is that Barnes and Noble is refering to one of several color E-paper display technologies that have been seeking mass-market distribution partners over the last two years. The objective is to combine the sunlight readability, low power consumption, and low eye strain benefits of epaper associated with ereaders with the ability of LCD screens to show colors and videos.

    Perhaps the best known color e-paper technology is Qualcomm's (NASDAQ:QCOM) Mirasol screen. But it does not appear that Mirasol will ever make it to either the Nook or the Kindle- Qualcomm has recently backed out of production of that product.

    But there is another likely partner; Pixel Qi. Pixel Qi's screens are traditional LCD screens, but they also offer a lower pow consumption, reflective mode where the backlight is turned off. In late April of this year, Pixel Qi blogged that they were working on a next generation display that could match the resolution of the Ipad 3.

    So I think it is likely that the rumored Nook will be a Pixel Qi tablet, perhaps incorporating Barnes and Noble's glowlight technology as a third mode.

    And I believe this because a recent hire at Amazon (AMZN) indicates that Kindle is already hard at work copying that product.

    In May, just days after Pixel Qi's new screen announcement, Amazon's Lab126 hired away Pixel Qi's Vice President of Display Module Engineering and made him their new Manager of display hardware. Once again, thank you Linkedin!

    So Amazon and Barnes and Noble are both planning Pixel Qi style screens. And it's possible we will start to see them next week. But given how recent that new hire was, I think it is more likely that we will see that frontlit Kindle next week, and the color product is still in development.

    -----------------------------

    This was originally planned to be my first article for Seeking Alpha, but I am switching it to an instaspost due to the time sensitivity. Thanks to Dana Blankenhorn for encouraging me to submit my first post, and to Nate at the Digital Reader for being an excellent daily source of everything ereader.

    Disclosure: I am long BKS.

    Additional disclosure: I am short AMZN.

    Themes: QCOM, LNKD Stocks: BKS, AMZN
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