IRex Technologies, maker of the e-reader iLiad, has filed for bankruptcy, reports PaidContent. The company, which began selling the iRex DR800SG in February, reports that sales of the device have been below expectations. The DR800SG had received a good deal of attention for it's unique model, which gave publishers more control over the distribution of their content. Unlike Amazon's Kindle, iRex's device allowed for publishers to set their own prices. Moreover the company, which does lack brand recognition by consumers, has distribution agreements with both Best Buy and Barnes and Noble.

Part of the device's failure can be explained by its repeatedly delayed debut, which caused the e-reader to miss the 2009 holiday season. The delays, caused by setbacks on FCC approval of the device, may have forced the e-reader the miss the most critical time for its sales. Despite its high-profile launch in the US, the e-reader was unable to attain the popularity of other e-readers.

iRex's bankruptcy signals the thinning out of the e-reader landscape. While this could be good news for e-reader producers who will have less competition, it could also be a sign that e-readers are not a wildly popular as some had expected.

Last December, as iRex's FCC approval problems began to mount, Amazon published press releases saying that the Kindle was having "its best sales month ever." While the Kindle certainly has the brand recognition that iRex's device lacked, it does not offer the same amount of publisher freedom. However, PaidContent also reported in December an analysis of the major players in e-reader devices and the iRex merited only a brief mention. The most discussed contenders were industry giants such as Wal-Mart, Amazon, Barnes and Noble, and, of course, Apple.

iRex's bankruptcy comes as somewhat of a surprise, especially when the freedom it afforded publishers would have assumedly set it apart from other e-readers. Nonetheless, the disappearance of the iRex represents a thinning out of e-reader competition as the number of industry competitors narrows down.

Sources: PaidContent (1), PaidContent (2), PaidContent (3), Publisher's Weekly,