Plastic Logic Encounters Turbulence

On Monday the FT reports that control of the company may be transferred to Rusnano, a state-owned Russian company. Today, Wednesday, Plastic Logic announces it has canned its product line.

Plastic Logic is one of several UK high-tech investments which are about ten years-old, which have received $100-200 million in venture money, and which are not cash-flow positive.

Investors include Hermann Hauser's Amadeus Capital Partners, Intel Capital, Oak Investment, Tudor Investment, and BASF. They've put in a collective $200 million.

The company has a deal with Merck for the supply of semiconductors and a factory in Dresden.

Plastic Logic has been hailed as the route to ultra-cheap electronics devices of all kinds, but its first commercial product was not an IC, but an e-reader called QUE ProReader.

QUE was to be one third of an inch thick, with a 10.7 inch screen, weighing less than 1lb.

QUE was announced at this year's CES, and, if it had not suffered production delays, would have been on sale by now for $650 for a WiFi-only version, and $800 for a WiFi + 3G version.

The decision to can QUE may have been affected by the launch of the $500 iPad, and the drop in price to $169 of the Amazon Kindle e-reader.

Plastic Logic will now concentrate on a second generation e-reader. "We plan to take the necessary time needed to re-enter the market as we refocus, redesign and retool for our next generation ProReader product," says Richard Archuleta, CEO of Plastic Logic, who adds: "We are fortunate to have investors who are committed to our company's long-term success in commercialising plastic electronics."

Hope he's right.