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Yahoo News wrote:AMSTERDAM (Reuters) - In Neal Stephenson's sci-fi novel "The Diamond Age," a young girl's companion is a book with amazing qualities -- it talks, and the words magically change with the story.
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A decade after Stephenson's book was published, what was once labeled science fiction is finding its way to the real-world market.

"Electronic paper" is a display technology that makes possible flexible or even rollable displays which, unlike current computer screens, can be read in bright sunlight.

But, much like when LCD displays came to the market, consumers are first likely to see the technology in clocks and watches. The popular example of an electronic newspaper that automatically updates itself wirelessly is still years away.

A number of companies are currently working on such displays -- LG.Philips LCD (034220.KS) and Massachusetts-based E Ink announced last month that they have developed a protype 10-inch display, and Fujitsu (6702.T) showed a color display in July.

Philips' (PHG.AS) Polymer Vision unit aims to mass-produce a rollable 5-inch display by the end of 2006, and among the first consumer products is a watch with a curved electronic paper display from Seiko Epson (6724.T), due to hit the Japanese market next year.

Electronic paper was invented in the 1970s at Xerox' (NYSE:XRX - news) Palo Alto Research Center by Nick Sheridon, who now works as research director at Xerox subsidiary Gyricon, which makes electronic paper signs.

"If you remember the green-screen monitors -- it drove him crazy and he was looking for something that was easier on the eyes," Gyricon spokesman Jim Welch said.

ELECTRONIC OR PAPER?

The technology at the heart of electronic paper? Tiny black and white particles that are suspended in capsules about the diameter of a human hair.

The particles respond to electrical charges -- a negative field pushes the negatively charged black particles away to the surface, where they create a black dot. Positively charged white particles create the opposite effect.

At a 10th of a millimeter, the thickness of an ordinary sheet of paper, electronic paper is much thinner than the liquid-crystal displays (LCDs) used in today's computers and mobile phones.

It also consumes 100 times less power because it does not require a back light and only needs electricity to change the image, not to hold it.

Like ordinary paper, it reflects light, making it readable even in difficult conditions such as direct sunlight.

Michigan-based Gyricon is already selling e-paper signs and message boards that can be updated wirelessly -- allowing, for example, to centrally update room signs throughout a building.

MOBILE INTERNET

But it is the potential for boosting mobile Internet use that makes electronic paper displays particularly attractive, said Karl McGoldrick, Chief Executive of Polymer Vision.

Displays that can be rolled up mean that while the screen gets bigger, the actual device can stay small.

"Beyond smart phones, beyond PDAs, displays are simply too small to have any value from a mobile Internet perspective," McGoldrick said.

"This year, there will be something like 700 million mobile phones sold and, out of those, just 5 percent will be smart phones. If you want to bring the mobile Internet to the mainstream, you need to attack the other 670 million phones."

In the first step, McGoldrick envisions a pocket-size standalone device that can download content directly from a PC, via the mobile network or wireless Internet. He said Polymer Vision was currently talking to manufacturers and content providers alike to put such a device together.

The firm says its 5-inch display will be priced comparably with LCD displays of the same size.

Ted Schadler, an analyst at market research group Forrester, cautioned that manufacturers needed to make sure their devices did not end up being a "solution looking for a problem."

"It's not enough to build a product. You have to build an end-to-end solution. Of course Apple (Nasdaq:AAPL - news) has done that brilliantly with the iPod, and they're continuing to push the envelope there, but they're about the only ones," Schadler said.

An electronic newspaper, when the technology is finally available to produce one, still may not be the device to rescue newspaper publishers from an aging readership and dwindling circulation numbers.

Such a device could well be sold by newspaper publishers who would subsidize it in order to sell subscriptions, but it would have to offer other sources to be attractive, Schadler said.

"If you would lock consumers into just one news service, they will not find it interesting. Users might want to read a blog, a competitor, a magazine, a book -- not just the Financial Times, the Herald Tribune, the New York Times," he said.

"They have to be really careful how they open the access to make it more valuable," Schadler said.