Amazon Reacts To iPad Challenge With Touchco Acquisition

In what is being viewed as a way for it to protect its Kindle e-readers from the threat posed by Apple’s iPad, Amazon has reportedly acquired Touchco, a small startup focusing on multitouch technology.

Specifically, Touchco’s technology allows for an unlimited amount of touch inputs to be made simultaneously on a screen. Sometime around the original 3 February report on the acquisition by The New York Times, which quoted unnamed sources close to the deal, Touchco effectively shut down its website.

Current versions of Amazon’s popular Kindle e-reader utilise mechanical controls for navigation. Newer e-readers from competing manufacturers, many of which were on view at this January’s Consumer Electronics Show in Las Vegas, utilised some sort of multitouch element. Depending on how multitouch technology from Touchco or another firm was integrated into a future version of the Kindle, it would allow Amazon to potentially leapfrog the competition.

Acquisition and technology news surrounding the Kindle is of particular note at the moment, as competition in the e-reader space continues to accelerate.

Amazon found itself in brief conflict at the end of January with Macmillan, publisher of bestsellers such as “Wolf Hall,” which wanted to raise the price of e-books to take into account new devices hitting the market. In response to Macmillan’s attempt to raise its e-book prices into the $12.99 (£8.19) to $14.99 (£9.45) range, Amazon pulled the publisher’s titles from its online store.

“Macmillan, one of the ‘big six’ publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switch to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases,” Amazon wrote in a 31 January statement. “We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles.”

However, Amazon also assured its readers that the situation was temporary.

“We will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books,” the retailer wrote. “Amazon customers will at that point decide for themselves whether they believe it’s reasonable to pay $14.99 for a bestselling book.”

While originally pigeonholed as a niche product by some analysts, e-readers nonetheless managed to become one of the hot holiday items of 2009, with a number of companies, large and small, moving into the space to compete with Amazon. Barnes & Noble announced in October that it would market its own e-reader, the Nook, which features an iPhone-like screen for navigation in addition to an e-ink display. That device also became a strong holiday seller.