The show floor of January's Consumer Electronics Show was swamped with E-Ink-based e-readers of all shapes and sizes, to the point that it seemed that a tsunami of Kindle knock-offs was going to hit the US market in the first quarter of 2010. But in hindsight, it turns out that the wave actually crested at CES, and has now almost entirely subsided.

First, Sprint and Hearst cancelled the Skiff e-reader, then the Plastic Logic QUE was delayed yet gain. Last month, long-time Dutch e-reader maker IREX went bankrupt—the Iliad e-reader just didn't sell well enough in the US, and the company ran out of cash.

The latest development in the e-reader market's rapid downward spiral is that the Plastic Logic QUE has been cancelled.

"We recognize the market has dramatically changed, and with the product delays we have experienced, it no longer make sense for us to move forward with our first-generation electronic reading product," Plastic Logic CEO Richard Archuleta said in a prepared statement. "This was a hard decision, but is the best one for our company, our investors and our customers."

Plastic Logic claims that it will continue to work on a "more advanced" e-reader, and has framed the cancellation as a decision to skip the first-generation QUE and focus entirely on its second-generation product.

The one thing that the two highest-profile e-reader cancellations had in common was that they both married the same E-Ink technology that's used in the Kindle and the Nook with a flexible substrate—the Skiff's substrate was foil, while the QUE's was plastic. And the thing held in common by all three of the troubled e-readers mentioned (Skiff, Iliad, and QUE) was they were all touchscreen designs.

The problem for these products is that the e-reader market appears to consist almost exclusively of people who want to use the devices to read, which means that they don't really care about being able to bend or flex the e-reader a little bit, nor are they willing to pay the huge premium that a touchscreen commands. Neither of these features enhances the basic reading experience that's at the core of why people pick an E-Ink device over a reader with an LCD screen.

For those who just want to read, the Kindle is now very cheap. And if you're going to pay for a touchscreen, you might as well spend a bit extra get an iPad.

Mind the gap

While there is a significant price gap between the $500 iPad and the $140 Kindle, nothing compelling has emerged that really fits in that gap (aside from maybe the DX, which really isn't that compelling when compared to the iPad). And given how far E-Ink is from offering a compelling color option (seriously, the color prototypes look awful), it's hard to imagine anything based on the technology filling that void. Again, the three readers above tried, but nobody cares about touchscreens or flexibility.

The two options that spring to mind as possibilities for the $200 to $450 price range are Android tablets and readers based on technology by Pixel Qi. The former are steadily making their way to market, and will fit precisely into the aforementioned price spectrum.

As for Pixel Qi, it's still hard to determine when devices based on the technology will come to market. This year was supposed to be the year that we were going to see all manner of netbooks and notebooks based on the company's reflective LCD tech, but the year is half over and all that has happened is a small, do-it-yourself panel launch that quickly sold out. Pixel Qi CEO Mary Lou Jepsen has mentioned some unspecified "bigger customers," and we wonder if one or more of those bigger customers aren't eating up the entire supply of displays for some as-yet unannounced product. Either way, the Android tablets seem significantly closer to filling in the $250 price gap between the Kindle and the iPad than anything Pixel Qi-based.