Amazon Reacts To iPad Challenge With Touchco Acquisition

According to a 3 February research note from The NPD Group, e-reader satisfaction among users hovers at around 93 percent of 1,000 people surveyed by the research firm; of those, some 60 percent said that wireless access was their favorite feature, followed by 23 percent who said touch. Around 34 percent voiced a wish for color screens.

But the 27 January unveiling of Apple’s iPad changed the e-reader landscape, with Apple CEO Steve Jobs announcing an iBooks application and accompanying online store that would market and display e-texts for the device’s 9.7-inch LED backlit multitouch screen.

“Apple finally unveiled its much-anticipated multimedia tablet iPad, along with an e-reader app called iBooks and an online e-books store,” Youssef Squali, an analyst with Jefferies & Co., wrote in a 28 January research note. “We believe that the iPad will slow Kindle’s growth momentum but we do not see its impact on Amazon’s [2010] revenues as material. There is likely a market for a dedicated e-reader but at arguably lower prices.”

In preparation for its likely battle against Apple, Amazon announced an SDK (software development kit) for the Kindle that would allow developers to build active content that takes advantage of the device’s 3G wireless delivery and high-resolution e-ink display. Termed the Kindle Development Kit, the platform includes sample code and a simulator for testing content on both the 6-inch Kindle and the 9.7-inch Kindle DX on a variety of operating systems, including Mac, Windows and Linux desktops.

Acquiring a touch-screen company would allow Amazon to further utilise this developer environment, but they face a potential challenge from Apple’s iPhone SDK 3.2 beta, which allows developers to create applications for the iPad. Apple evidently hopes that developers will use the SDK to add to the 140,000 apps expected to be available for the iPad when it launches within two months.