Digital paper looks and feels like traditional paper, even if you can\u2019t wrap fish in it. On the other hand, the "ink" in digital paper can\u2019t stain your hands. The technology also promises to save trees, reduce the amount of wastepaper that clogs landfills and make reading more convenient.Digital paper is arriving in the form of thin plastic sheets that display high-resolution text and graphic images. "The medium offers the prime attributes of paper?portability, physical flexibility and high contrast?while also being reusable," says Tim Bajarin, president of Creative Strategies, a Campbell, Calif.-based technology research company. Like other digital paper proponents, Bajarin believes the technology has the potential to become a popular display medium for publishing, signs and mobile devices. "The technology will supplement or, for many applications, even replace paper and liquid crystal panels," he says.Digital paper\u2019s future currently lies in the research labs of two companies: Gyricon Media and E Ink. "The race is on to develop a practical digital paper technology," says Bajarin. "The company that creates a digital paper that most closely resembles real paper in terms of size, flexibility, resolution, contrast and cost stands to reap enormous gains."Yet as digital paper inches closer to reality, some wonder if it\u2019s an innovation that people really need?or want. Amy Wohl, president of Wohl Associates, a Narberth, Pa.-based technology research company, says past predictions that technology would eliminate the need for physical documents have proved to be wrong. "Who\u2019s to say if they will be right this time?" asks Wohl, who also wonders if digital paper will really be as sharp, flexible and portable as its advocates promise. "It\u2019s rare indeed for any technology to immediately live up to its advance hype," she says. "With digital paper, anything less than full print quality and convenience would be a disappointment."Practical Paper Developing practical digital paper requires finding a way to mimic the output of a liquid crystal display (LCD) but without the need for a thick plastic case and backlight. E Ink, a startup in Cambridge, Mass., is working on a technology that uses a liquid filled with millions of tiny microcapsules. Each microcapsule contains white particles suspended in a dark dye. When subjected to an electric field, the white particles move to one end of the microcapsule where they become visible, making the digital paper surface appear white at that spot. An opposite electric field pulls the particles to the other end of the microcapsules where they are hidden by the dye, making the surface appear dark. "We\u2019re using the same basic substance people write with?ink," says Russ Wilcox, E Ink\u2019s vice president and general manager. "But instead of drying, it remains liquid."In Palo Alto, Calif., Xerox spinoff Gyricon Media is developing a flexible me-dium that uses millions of tiny black and white balls that act like rotatable toner particles. The beads reside in oil trapped in a plastic sheet. When a voltage level is applied across the balls, they rotate to show a particular side to the viewer, creating detailed text and images. "There are between 2 billion and 3 billion of these little balls in an 8-and-a-half-by-11-inch sheet," says Robert Sprague, Gyricon\u2019s interim CEO and manager of Xerox PARC\u2019s Document Hardware Lab. "The sheet acts like a computer screen but looks like paper."The E Ink and Gyricon technologies both show promise, but industry analysts aren\u2019t yet ready to declare that one product is superior to the other. "There haven\u2019t yet been enough real-world applications to make a judgment on quality or cost," says Wohl. But E Ink has taken the early lead in at least one area: marketing. While Gyricon has been working on digital paper technology for more than a decade, the company has fallen behind E Ink in developing marketable products and building bridges with potential partners. Although E Ink has already started testing digital paper-based products with customers and has established development links with Lucent Technologies, Philips and others, Gyricon has kept a low profile. "We have a great technology, but we haven\u2019t made a lot of noise yet," says Sprague.The RolloutDigital paper\u2019s first real-world application is an informational sign. Users can update digital signs more easily than printed ones, and digital paper signs require less power and maintenance than lights, CRTs, mechanical alphanumeric characters, plasma screens and other commonly used signage technologies. Late last year, E Ink tested a 3-foot-by-4-foot digital paper sign for about $1,500. The 7-pound product featured a one font and two-color display that customers could quickly rewrite via wireless commands. Based on customers\u2019 feedback, E Ink will launch a revised product later this year. "The lightweight material is easy to attach to walls and can be curved to fit an irregular surface," says E Ink\u2019s Wilcox. "It can even be rolled up and stored away when it isn\u2019t needed." Gyricon plans to begin offering its first sign product later this year.In about three years, digital paper will begin appearing in PDAs and mobile phones, predicts Bajarin. "Limited screen size is a major complaint of portable device users," he says. "Large, thin screens would give users more viewing area without adding weight."Both companies are striving to make thin screen mobile devices a reality. In February, E Ink announced a partnership with Philips under which it will develop a digital paper product that Philips will integrate with the electronic screen circuitry and drivers used by PDAs. Sprague says Gyricon is also looking at the handheld device market, but the company hasn\u2019t yet announced how and when it will enter the field.Digital paper will begin moving into publishing in about five to 10 years, predicts Bajarin. "It will be used to present the content of books, newspapers and magazines," he says. Although slightly thicker than its pulp counterpart, a single sheet of digital paper would still be more convenient to carry than the dozens of sheets of paper that constitute the typical book, newspaper or magazine, says Wohl. "Digital paper would also be less expensive over the long term," she says. According to Wohl, about half the cost of producing a newspaper comes from printing and delivery expenses. "Digital paper would eliminate these costs," she says. Just as a computer CRT or LCD now provides a window to the Internet, a single sheet of digital paper would give users access to an entire library of books and newspapers.Documentation would especially benefit from digital paper technology. Users would always have access to the most current documentation version available. "The information would never go out-of-date," says Bajarin. This could be a boon to manufacturing, aircraft maintenance and other fields where workers spend vast amounts of time tracking service updates and bulletins.Paper CutsDespite the apparent benefits, opinions vary on digital paper\u2019s prospects. Some believe the technology will be limited to specific niches?mobile phones and billboards, for example. Others foresee a much greater impact. Kenneth Bronfin, senior vice president of New York City-based Hearst Interactive Media, Hearst Corp.\u2019s electronic publishing unit, believes that digital paper has the potential to redefine publishing. "Think of a newspaper or magazine that\u2019s as up-to-date as electronic media," he says. "Content will be continuously updated by radio signals wherever you go."Digital paper technology also has the potential to make reading a more interesting and interactive experience, says Bronfin. "Pages will be able to display more than just static text and pictures," he says. "Articles, books, instruction manuals and other documents could include animated text, animation and even video images."Yet Bronfin worries that some people will be reluctant to swap pulp for plastic. "There will be a different page size, and some individuals may miss the feel of physically flipping through pages or having the ability to snip out coupons," he says.Another potential roadblock that could derail the acceptance of digital paper is the lack of full-color imaging. "This is a big drawback in a world where color plays a major role in most printed materials," says Wohl. Inadequate image resolution and tardy refresh rates?the number of times per second a screen is updated?are two other key barriers. "The technology still isn\u2019t quite ready for highly demanding PDA and publishing applications," she says. "It\u2019s one thing to use digital paper on a sign that\u2019s several feet high, it\u2019s quite another to make it suitable for personal uses."But Wilcox and Sprague are both confident that digital paper\u2019s current technical limitations can be overcome within the next few years. Wilcox says E Ink has improved its technology\u2019s refresh rate by more than thirtyfold over the past year. He also notes that resolution is now up to 200 dots per inch, with 600 dots per inch on the horizon. The color problem could be remedied by adding differently hued dual-color balls to digital paper sheets, says Sprague. "That\u2019s not too difficult."Turning the PageIf digital paper follows the trail set by pulp paper, it will likely be used for increasingly mundane purposes. "You probably won\u2019t blow your nose into digital paper, but you may eventually see things like digital Post-it notes," says Wohl.But before cyber stick-em-ups arrive, consumers will likely encounter digital paper-based price tags. "Don\u2019t be surprised if someday you see a product\u2019s price change before your eyes," says Sprague. He notes that retailers will be able to instantly update prices throughout a store, or even in stores around the world, with just the push of a button.Digital paper ID cards may also be on the way. "A pass or license, for example, could be instantly updated to show an updated address or new restrictions or privileges," says Wohl. On the whimsical side, digital paper could open new doors for novelty product manufacturers. How about baseball caps with digital paper logos (change your team allegiance depending on who\u2019s winning the game) or bumper stickers that change messages?"If you think about it," says Hearst\u2019s Bronfin, "digital paper actually has the potential to erase the word indelible from the dictionary."