More than three years after Kindle announced its exit from the Chinese market, a Guangzhou-based "survivor" is demonstrating to the capital markets that the e-ink screen business is not only alive but can be built into a company with potential for a public listing. Recently, Guangzhou Onyx Technology Inc. (hereinafter referred to as "Onyx") submitted a listing application to the Hong Kong Stock Exchange. Onyx's business logic can be described as "anti-Kindle." Unlike Amazon's attempt with a closed-system model of "low-price hardware + revenue from book sales," Onyx's e-ink products primarily feature an open system, allowing users to freely download various apps like WeRead from app stores. This strategy allowed Onyx to quickly fill the vacuum left by Amazon's departure. In 2024, Onyx's revenue reached 1.018 billion yuan, a year-on-year increase of 26.62%, securing a significant share of the downstream e-ink market. However, behind the impressive figures lie underlying concerns. While Onyx has captured users from the ruins of Kindle's exit, it must also directly confront the challenges of the "hard business" of hardware manufacturing: competitors' "product-flooding strategy" and constraints from upstream giants. To keep pace with the product release speed of manufacturers like Ireader Technology Co.,Ltd., Onyx launched 13 new products in 2024 and 9 in 2025, a release cadence comparable to major domestic smartphone makers. Even so, Onyx's revenue growth rate for the first three quarters of 2025 was only about 10% year-on-year, lagging behind the full-year 2024 growth rate. Onyx is now expanding into overseas markets, preparing for a direct competition in the US, Kindle's home turf. Whether its open-system approach can succeed internationally is being closely watched.
**Squeeze from Giants and Competitors** The memory of Amazon.com's e-ink reader Kindle failing in the Chinese market remains vivid, primarily because its "razor-and-blades" business model faced severe incompatibility locally. Amazon's logic was that hardware could be sold at break-even or a loss, relying on a closed system to bind users to the Kindle store and generate revenue through frequent ebook purchases. This model proved difficult to sustain in China. On one hand, domestic ebook pricing strategies were chaotic, piracy was rampant, and user willingness to pay was extremely low. On the other hand, the strong rise of free or subscription-based apps like WeRead could not be integrated into Amazon's closed system. Kindle's proud closed ecosystem became a shackle, creating an opportunity for the rise of Chinese manufacturers like Onyx. Onyx focuses on an open Android ecosystem, allowing installation of third-party apps like WeRead and compatibility with various file formats, offering a more personalized reading experience. This "content-agnostic, tool-focused" approach enabled Onyx to capture a portion of the market after Kindle's exit. Its revenue reached 1.018 billion yuan in 2024, a year-on-year increase of over 25%. Breaking down the products, Onyx's main revenue comes from e-readers (small size) and tablets (large size). In the first three quarters of 2025, these segments generated 293 million yuan and 472 million yuan, accounting for 36.7% and 59% of revenue, respectively. However, capturing part of Kindle's former market does not mean Onyx can rest easy. In the downstream market, besides Onyx, Chinese manufacturers like Ireader Technology Co.,Ltd., Iflytek Co.,Ltd., and Hanwang Technology Co.,Ltd. are all eyeing this space keenly. Although Onyx cites Frost & Sullivan data stating it is China's number one knowledge-focused productivity tools brand by 2024 retail revenue, its top position appears less secure from other third-party perspectives. According to data from Runto Technology, based on sales volume, Iflytek Co.,Ltd. held over 80% of the overall offline market share, while another brand led online, full-channel sales. Competitors are also heavily engaged in a "product-flooding war." In 2025, 83 e-paper tablet products were launched in the Chinese market. Ireader Technology Co.,Ltd. released 13 models at once, while a determined Onyx launched 10. Upstream, Onyx faces constraints from raw material suppliers. As the core component of e-readers, approximately 90% of global e-paper display supply is concentrated with E Ink Holdings. Onyx acknowledges it primarily procures e-paper displays from E Ink, with purchases from E Ink accounting for 28.1% and 27.4% of its total procurement value in 2024 and the first three quarters of 2025, respectively. Given this monopolistic position, E Ink captures the majority of the industry's profits. In 2024, E Ink's gross profit margin and net profit margin were as high as 49.64% and 27.28%, exceeding Onyx's margins by 12.73 and 15.37 percentage points, respectively. Caught between a monopolistic upstream and a fiercely competitive downstream, Onyx's path to breaking through faces significant tests.
**Is Global Expansion the Solution?** A business model relying solely on "selling hardware" clearly lacks appeal in the capital markets. In its prospectus, Onyx outlined its growth strategy, which involves transitioning from a "hardware-led" model to a more diversified structure encompassing "hardware + subscription + ecosystem." For subscription services, Onyx has developed its own note-taking app, StarNote, offering various value-added services like handwriting correction. Regarding its ecosystem, Onyx plans to gradually open its operating system interfaces to attract developers to create applications designed for eye-friendly reading and focused writing environments, consolidating its position as an open platform operator. Currently, the contribution from these areas remains relatively low. In the first three quarters of 2025, revenue from accessories, external e-ink displays, the StarNote app, and similar businesses combined was only 35 million yuan, accounting for 4.3% of total revenue. Whether this business segment can achieve a qualitative leap alongside increasing device installations remains uncertain. This is especially true domestically, where internet platforms often operate on models where core services are subsidized, leading to generally low user willingness to pay for apps like note-taking. However, Onyx's advantage lies in having already secured a certain market share in overseas markets where users exhibit higher payment willingness. In the first three quarters of 2025, markets in Europe, the US, and Asia (excluding China) contributed revenues of 170 million yuan, 149 million yuan, and 117 million yuan, respectively, collectively accounting for 54.9% of total revenue. To deepen its presence in overseas markets, Onyx has also launched region-specific products like the Note Air5 C and BOOX Go 7, primarily tailored for office user needs. However, earning US dollars is challenging. In the first three quarters of 2025, Onyx's revenue growth rate in the US market was 8% year-on-year, lagging behind the domestic market growth rate by over 4 percentage points. Overall, Onyx aims to convey that it is not merely a hardware company but a consumer electronics manufacturer that, like Apple, can win market share through software ecosystems and globalization. However, with its revenue growth rate for the first three quarters of 2025 at only 10.31%, more than 10 percentage points lower than the full-year 2024 rate, the viability of Onyx's "hardware + subscription + ecosystem" path remains to be seen.
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