The Paper Chase

Electronic paper vendors see color as one way to grab a bigger share of the booming digital signage market. 1/02/2005 5:16 AM Eastern

The Paper Chase

Electronic paper vendors see color as one way to grab a bigger share of the booming digital signage market.

THE PERCEPTION that digital signage is everywhere isn't just a hypersensitivity that comes with working in AV. It really is that pervasive. At the end of 2004, the display portion of the worldwide retail signage market was worth about $664 million, according to estimates by iSuppli, an El Segundo, CA-based analyst firm that tracks the AV industry. That amount should double by late 2006, and by 2009, digital signage should be worth about $2.3 billion.

One big driver behind that market is fairly obvious: Signs that are colorful, dynamic, or both attract more attention than black ink on eggshell cardboard. In advertising applications, another driver is the ability to wring more revenue from each sign.

“From retailers' and other users' point of view, a move to digital media is inevitable,” says Sanju Khatri, a senior analyst at iSuppli. “Retailers/users who already have static signs installed in various retail locations have a vested interest in switching to digital signage because they can now offer multiple advertising slots and different ad rates. The question is how fast and what will determine the migration to digital signage.”

LED, LCD, and . . . paper

“Digital signage” is a catchall term that focuses on how the display is used rather than the underlying technology. “I define digital or retail signage as the display and management of information and advertisements in retail and various other commercial environments,” Khatri says.

LED and plasma currently hold the biggest shares of the signage market in terms of revenue, according to iSuppli's estimates, with LCD outpacing LED around 2006. Those market positions overshadow another player: electrophoretic technologies, also sometimes called “electronic paper.”

One example is Gyricon, an Ann Arbor, MI-based company spun off from Xerox PARC in 2000. Gyricon's SmartPaper displays are used in applications such as convention centers and hotel lobbies. A SmartPaper display looks like a monochrome cross between a whiteboard and the screen of a late 1970s computer, with blocky characters of a fixed size. “In the not-too-distant future, these signs will be fully pixilated, so you can put in graphics and change text size,” says Robert Sprague, vice president and CTO of Gyricon.

The design is highly scalable. Gyricon can tile together multiple four-character sections to scale the technology in sizes ranging from an index card to a 4-foot by 8-foot sheet of plywood, and potentially up to a billboard. “Compared to things like LEDs, it's very cheap and very sunlight-readable,” Sprague says. The current products are for indoor applications, but later this year, Gyricon expects to offer an outdoor version that works in temperatures from -70 to 90 degrees Celsius.

The company touts a wide variety of potential applications, including shelf labels, road signs, electronic books, and roll-up displays for hand-held devices such as cell phones. If those markets took off, SmartPaper would start building the volumes necessary to drive down the cost. That would make the technology even more competitive with old-fashioned paper and help stave off conventional display technologies — including LEDs — that begin to encroach on some of SmartPaper's markets as their costs drop.

What SmartPaper lacks in color and resolution it makes up for in cost, flexibility, and readability. For instance, by using batteries or solar power, the displays can be installed in places where electricity isn't available or wouldn't be cost-effective to add. “The batteries will run for a couple of years in most applications,” Sprague says.

That claim is impressive, considering that SmartPaper uses 802.11b WiFi wireless technology to receive updates, such as a new message to display. (Ethernet also is an option.) WiFi is notorious as a battery hog — so much so that vendors such as Intel have spent years figuring out ways to make 802.11b viable for portable devices such as laptops. Gyricon tackles that problem by waking up the WiFi radio only when it's time to refresh the display, rather than having it constantly turned on. Solving the WiFi power riddle is key to adoption because 802.11b is widely used in enterprises and public spaces, so SmartPaper leverages the customer's existing infrastructure rather than forcing them to deploy WiFi just to use SmartPaper.

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The Paper Chase

Electronic paper vendors see color as one way to grab a bigger share of the booming digital signage market.

Balls in the air

Another power-saver is that the displayed message isn't frequently refreshed, and once the message is “set,” no additional power is required to hold it in place. That's because SmartPaper consists of millions or billions of polyethylene balls, each about half the diameter of a human hair, all nestled against a backplane. One side of the ball is black and positively charged, and the other side is white and negatively charged.

When the backplane applies power in a specific pattern, each ball that receives a positive charge rotates its black half to face out, while those that receive a negative charge show their white face. With enough black sides facing out and in the right places, letters and numbers are formed. “These balls are so small that your eye doesn't see the ball,” Sprague says. “It sees the aggregate effect of lots of balls.” (Close-up videos of the balls are available at and

To save power, SmartPaper doesn't use a back-light but instead relies on ambient light reflecting off of the balls' surfaces. Being a reflective technology doesn't necessarily limit the technology's applications. For example, the SyncroSign message board leverages the fact that convention centers are always well lit. “In the daytime, as the sunlight gets brighter, they start to outshine LED signs because those tend to wash out,” Sprague says. “These don't. The more sunlight you put on them, the better they look.”

Gyricon makes SmartPaper by melting polyethylene, which is mixed with black pigment and then poured onto a spinning disk. Meanwhile, white-pigmented polyethylene is poured on the other side of the disk. The centrifugal force pushes the material on both sides to the disk's edge. “When it falls off, surface tension pulls this material into little, round balls that are essentially drops,” Sprague says. “They fly through the air and harden before they hit anything.”

The bichromal balls are mixed with a transparent, silicon-like elastimer and coated onto a sheet using the same coater technology used for manufacturing floppy disks. The sheet is then soaked in silicon oil, which the elastimer absorbs like a sponge, expanding in the process. That expansion frees up just enough room around each ball to create a cavity so that it can rotate when a charge is applied. Finally, the sheet is sandwiched between a backplane and Mylar layer, creating the display.

The materials list and manufacturing process are worth noting because they leverage existing technologies, which helps reduce overhead so that SmartPaper can be priced competitively. The potential catch is whether that technology can be tweaked to support more than monochrome text. “You can build these technologies to work at video rates,” Sprague says. “We've done it in the lab. Other people have electronic paper displays in the lab that run at video rates. So it is possible to get to video speeds. Nobody is selling those right now, but that will come in time.”

Reaching for video

Gyricon is mum on how it would pull off video. Some are skeptical that it's even possible. “SmartPaper and other electrophoretic technologies seem not to be able to support video,” says Kimberly Allen, director of technology and strategic research at iSuppli.

Whether they can do video is almost a side issue compared to whether they should do video. For example, one of the selling points for technologies such as SmartPaper is that they're inexpensive and don't require wiring for power and network connectivity. That mix is tough to beat, at least for certain applications.

“The best strategy for these technologies right now is to focus on supplying a total solution that includes support features and plug-and-play ease of operation and integration,” Allen says. “They can also emphasize their lower weight and work on developing flexible backplanes.”

Color seems to be a more attainable goal. For example, Gyricon is developing a version of SmartPaper that can do pairs of colors, such as red and white or green and white. “It's very bright and sunlight-readable color,” Sprague says. “It's a challenge with reflective signs to do fully saturated color. There's still work to be done.”

In the meantime, Gyricon can play up its adjunct products as a market differentiator. A prime example is its back-end systems that can link hundreds or thousands of signs to, for example, a store's price database so that a one-day sale doesn't require the time and expense of replacing all those paper signs.

“The extra-technical properties of SmartPaper give it a big advantage: associated software, packaging, and service that make the product well adapted to the niche,” Allen says. “I don't see the LCD and PDP players doing as much of that.”

Another way of looking at digital signage is that form follows function, and not all forms can stretch themselves to fit every function. “The requirements of digital signage are vast and depend on the specific location and purpose of each sign,” Khatri says. “One type of display technology will not satisfy the needs of the digital signage market.”

Tim Kridel is a freelance writer and analyst who covers telecom and technology. He's based in Kansas City and can be reached at

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