Thomas White Global Investing
Taiwan Stamp
December 28, 2009
A Postcard from the Asia Pacific
Taiwan: Government to Help the E-book Industry


Taiwan is also planning to assist local publishers with the introduction of 100,000 e-books in the Chinese language.

Amazon started it all. Their revolutionary product, the Kindle, sparked the imagination and forced other companies to innovate and introduce similar gadgets. Now, Sony has its Daily Edition e-reader while Barnes & Noble’s Nook is aiming to give Kindle a run for its money. All this action has happened primarily in the U.S., but few know that Taiwan has had an important role to play in the e-book rage. The tiny nation is the top supplier of electronic paper displays for the burgeoning e-book industry. In fact, with the recession hurting its traditional electronic goods exports, Taiwan is doing all it can to strengthen its foothold in the futuristic e-book sector.

The government of Taiwan, which is struggling to crank up the nation’s growth engine amid the downturn, has promised to invest $66 million over the next five years to help the e-book industry. The government believes that e-books are the way forward, envisaging them as personal hand-held computers that can perform as many functions as a typical laptop. That day may not be far as color e-readers are slated to be released as early as next year, and the Ministry of Economic Affairs’ Industrial Development Bureau is facilitating the creation of an online Chinese-language digital publications service similar to the one supported by Amazon. The bureau has promised to bear up to 40% of the project’s research and development expenses.

The government has also inked an in-principle agreement with China to promote the EPUB (.epub) e-book format for Chinese e-readers. EPUB is an open-standard format, unlike Amazon’s AZW (.azw) format, which works only on the Kindle. In other words, books downloaded in the AZW format keep the reader tied to Amazon, but books in the EPUB format can be read on all e-readers. Further, Taiwan already has an edge in the Chinese digital publishing market, which has 1.3 billion potential readers. Globally too, the market is expanding – despite the lingering effects of the recession, world e-book sales are expected to cross four million this year and eight million in 2010.

Taiwanese company Prime View International, which supplies components for the Kindle, dominates the e-paper display market, with close competition from another Taiwan-based firm, AU Optronics Corporation. Foxconn, also a large domestic company, manufactures the Kindle for Amazon. Several other smaller players are expected to enter the market following the government boost, and eventually, the mass-production of e-readers may help lower retail prices to as little as $100. Such a price tag would widen the customer base further.

These are early days for the e-book industry, but Taiwan is showing the way to the future long before other countries have sensed the sector’s potential. The country may be small, but it is an undisputed giant in the electronics industry clearly because of its farsightedness. If the next decade heralds the era of the e-book, Taiwan will certainly be at its forefront.

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