Chinese E-Reader Maker Plans to Enter U.S. This Year

Hanvon Technology Co., the maker of China’s most popular electronic reading device, plans to introduce an e-reader in the U.S. by June or July to challenge Amazon.com Inc.’s Kindle DX.

Hanvon, which says it controls as much as 70 percent of the Chinese e-reader market, is targeting educational and professional users with a 9.7-inch-screen device. The Kindle DX is the largest in Amazon’s family of e-readers.

“The key in the U.S. market is a high-tech product at a low cost,” Jessica Zhang, a general manager at Beijing-based Hanvon, said in an interview at the Consumer Electronics Show in Las Vegas. “Amazon isn’t a technical company but we are, so we’re going to try to make a better product.” She declined to comment on pricing plans.

In November, Hanvon became the first to introduce an e- reader using a color display from E Ink, a company that also makes screens for the Kindle and Sony Corp.’s line of e-readers.

After the release of its international version last year, the Kindle took about 10 percentage points of market share in China from Hanvon, according to Zhang. Now Hanvon is going after Seattle-based Amazon on its home turf.

Hanvon has a product line of e-readers called WISEreader. It’s also known for its handwriting-recognition software that lets users transcribe Chinese, Japanese and English writing into electronic documents.

The company has boosted its research and development staff working on the e-readers to 300 today, from 100 in late 2007, Zhang said. She declined to give estimates on how many devices the company expects to sell in the U.S.

Language Issues

Hanvon hasn’t yet lined up agreements with publishers to distribute e-books on its devices, Zhang said. Millions of out- of-copyright books can now be used on them, she said.

Language issues may become an obstacle to the company’s expansion plans, said Jennifer Colegrove, an analyst at research firm Display Search in San Jose, California.

Hanvon sold 1 million to 2 million e-readers this year, controlling about 8 percent to 10 percent of the global market, Colegrove estimates. She pegs Kindle’s leading global share at 29 percent to 36 percent. Hanvon’s e-reader sales are on par with sales of Barnes & Noble Inc.’s Nook, she said.

“In 2011, they will each hold their leadership in their own regions,” Colegrove said. “But in the long-term future, with all this multilingual content available and software translators, they might start to merge to each other’s region.”

The market for standalone e-readers is growing even as Apple Inc. builds demand for the iPad tablet, which lets users read books, watch videos and carry out computing tasks. Apple, based in Cupertino, California, sold 7.46 million iPads from their April debut through September.

To contact the reporter on this story: Joseph Galante in San Francisco at jgalante3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net.

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