With touch-screen purchase, Amazon edges closer to Apple iPad territory

Amazon has reportedly acquired Touchco, a company that builds touch-screen technology. Many see the move as a preemptive strike against the Apple iPad.

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First, Amazon revealed that it would soon raise royalty rates for the Kindle Digital Text Platform, a popular self-publishing tool. Then on Jan. 21 – several days before the Apple iPad was officially unveiled – Amazon announced that it would open up the Kindle to third-party developers. Now, the e-book giant has reportedly acquired Toucho, a New York start-up that helps build touch-screen technology.

According to the New York Times, Amazon has plans to fold Touchco into its Kindle hardware division – a move, presumably, which would eventually yield a touch-screen Kindle. So let's do the math: Amazon is making it more profitable for writers to post content to its online store. Amazon is inviting developers to produce applications for its electronic device. And Amazon is investing in touch-screen technology.

Amazon, obviously, is preparing for war against the highly-buzzed Apple iPad. As Colin Sebastian, an analyst at Lazard Capital, told the New York Times, the Toucho acquisition suggests that "Amazon is looking to expand its platform perhaps beyond e-readers to encompass more functionality and more content." Amazon is looking to broaden the reach of the Kindle, in other words, from plain old e-reader to dynamic, versatile device.

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Still, as we've argued before, it would take a lot for the Kindle to compete with the iPad. The Apple iPad has a gorgeous screen, and a built-in base of eager iPhone app developers, while Amazon will be starting from scratch, with a sub-par screen and inferior hardware. One possibility, of course, is that Amazon isn't interested in building onto the Kindle, but in making a whole new device – an Amazon tablet, which would play movies and display e-books with equal aplomb.

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What kind of odds does Amazon have at challenging the Apple iPad? Drop us a line in the comments section, or on Twitter. We're @CSMHorizonsBlog.

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