British display screen maker Plastic Logic has scrapped the launch of its long-awaited e-reader QUE, which had been seen as a potential challenger to the hugely popular Kindle from Amazon.

The firm said it had decided to focus on developing a new, second-generation e-reader instead of the QUE after accepting that the market for electronic reading devices had moved on.

It did not give any further details on timing for a new device. Plastic Logic, which is in talks to have Russia take a stake in the firm, had planned to start shipping the QUE earlier this year.

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, Chief Executive Richard Archuleta said in a statement.

This was a hard decision, but is the best one for our company, our investors and our customers.

The market for e-readers, which are popular with travelers and readers who do not want to carry around heavy books, has become increasingly crowded in recent years.

The mass selling Kindle has gone through a series of price reductions in light of increased competition from Sony Corp, Barnes & Noble and most recently Apple's iPad.

The QUE had been named by analysts as another contender in the sector after it went on display at the Consumer Electronics Show in January this year. It had already set out its pricing and plans to use AT&T Inc's 3G network.

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, Archuleta said.

Plastic Logic was founded in 2000 by researchers at Cambridge University and now has its executive management team in California.

(Reporting by Kate Holton; Editing by Jon Loades-Carter)

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