Two companies behind Kindle display technology to merge

Amazon.com's Kindle electronic reader relies heavily on a couple major technology vendors: Taiwan's Prime View International, which manufactures the electronic readers, and E Ink, which provides the digital ink technology. Now those two vendors are combining into one, with Prime View acquiring E Ink, of Cambridge, Mass., for about $215 million.

What does this mean for Amazon? In the short-term, the online retailer will be dealing with a single technology provider for many of its Kindle needs. But as the e-book market grows, the sector may attract other vendors, giving Amazon more choices.

Prime View and E Ink, in a joint statement, said they have collaborated on technology for the Kindle 2 and Kindle DX as well as the rival Sony Reader. The companies cited an iSuppli analyst who expects the electronic book reader market will grow to 20 million units in 2012 from 1.1 million units in 2008.

E-Ink has raised more than $150 million from investors including publisher Hearts, Motorola, Intel and others.

Amazon CEO Jeff Bezos recently indicated his company may never share Kindle sales numbers, and Amazon has in the past declined to reveal the costs of making the devices.

Amazon said today it plans to start shipping the new large-screen Kindle DX on June 10.

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About Eric Engleman

ERIC ENGLEMAN is senior technology staff writer for TechFlash and the Puget Sound Business Journal, covering online retail giant Amazon.com. Engleman tracks Amazon's increasingly complex business, spanning ecommerce, Kindle, cloud computing, and more. He's been covering technology and other industries for the Business Journal since 2003.

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