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UPDATED: August 30, 2010 NO. 35 SEPTEMBER 2, 2010
The E-Reader Arena

China's e-reader market has been dominated by a single player: Hanvon, known for its Chinese handwriting recognition software. But now, Yeahmore, an up-and-coming e-reader brand developed by Shanghai Yeahmore E-Reading Media Co. Ltd. with distribution ties through the Xinhua bookstore chain and other major book retailers, is stepping into the fray. And many other companies are following suit. Yeahmore CEO Ding Huiwen talked with Beijing Review about the future of China's expanding e-reader industry. Edited excerpts follow:

Beijing Review: What do you think of China's domestic environment in terms of developing its own e-reader industry? How does it compare to, or what are the differences with, the United States?

Ding Huiwen, CEO of Shanghai Yeahmore E-Reading Media Co. Ltd.

Ding Huiwen: The e-reader industry is a new and emerging industry that only came in vogue one or two years ago with huge market potential. Compared with the e-reader industry in the United States, China still lags behind in terms of digital publication, which provides content for e-readers. Domestic digital publication is in its early stages compared with the U.S. market since there are only a few presses that can provide professional digital content. Some visionary publishing houses are getting started, but many still discriminate against digital content and have refused to follow the digital trend. Therefore, it's hard for hardware companies to provide authentic content to e-reader users in China at this time.

What do you think of the prospects for China's e-reader industry?

Foreign e-readers were developed much earlier and have since matured technologically. The success of Amazon, whose sales of Kindle have far out-paced that of paper books, has in effect declared victory over other e-books and e-readers. Domestically, Hanvon's fame as the only e-reader in China in 2009 is now being challenged by other emerging companies. Operators, content providers and hardware companies all covet a slice of the big e-reader cake. In a small amount of time, a flood of e-readers have crashed through the market, dazzling consumers with so many choices. But frankly speaking, competition is far from sufficient in the e-reader market, as there are only two or three competent producers.

Along with the debut of iPad and Nook, as well as cost reductions thanks to mass production, e-reader gurus like Kindle and Sony started to cut prices in order to win over more users. If the e-reader price falls below 1,000 yuan ($146), the student market would be immediately opened up. If 1 percent of students buy these devices, the sales volume of e-readers will reach 2 million and may even exceed 10 million in 2011.

The domestic e-reader market already has a variety of products. What advantages does your company have over competitors?

At present, the Kindle model—device plus content—is being greatly promoted by domestic e-reader producers like Hanvon. As for Yeahmore, we have officially launched the online e-book store Xinhuaestore.com, and have signed cooperation agreements with more than 100 publishing houses, newspapers and magazine producers in terms of content. In the meantime, Shanghai EDO Electronic Technology Co. Ltd., one of the investors in Yeahmore, will supply the actual device. This combination of device and content will give Yeahmore an edge over its rivals.

The iPad, which has posed a threat to Amazon's Kindle, will soon be sold in China. How will domestic e-reader makers be affected by the iPad's arrival?

Just months after its debut, the Apple's iPad has already exceeded the total sales volume of Kindle e-readers over the past two years. That's a pretty heavy blow to the Kindle. But a breakdown of purchasers tells people that the iPad is projected to be a multi-functional entertainment terminal. Well-known consulting firms have pointed out that iPad owners only spend a small proportion of their time reading on the iPad. Most of the time, they browse photos, watch videos or play games. As a result, the iPad will ultimately be a rival for netbooks and other entertainment terminals, and it will not have a major impact on the e-reader market.

What made you give up the position as CEO of Semiconductor Equipment and Materials International (China) to specialize in e-readers?

I think very highly of the industry and now is the best time to get involved. The promotion of a low-carbon economy and way of life makes it possible for e-books to replace traditional paper books in the future. I expect the domestic e-reader market will maintain a 100-percent annual growth rate in the next three years.

But most importantly, I strongly believe the e-reader business is an undertaking that will benefit all of mankind.

Processing one ton of paper needs to cut down 17 10-year-old trees, which means about 12 million hectares of forests disappear and 600,000 square km of farmland becomes desertified each year. I feel obliged to protect the environment confronted with these looming risks. If one day, e-readers totally replace paper books, we would no longer have to cut down so many trees, and if everyone starts reading e-books, we could live in a greener environment much sooner.

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