04/06/2010 05:12 am ET Updated May 25, 2011

Amazon Purchases NY Based Touchco to Compete with Apple?

I find it curious that Amazon is taking the fight to Apple. In my professional opinion this is an unfair match -- with Amazon being on the losing side. Perhaps therein lies the problem -- Amazon is no longer the giant in this space. Yes, agreed Apple started the fight with the combination of price matching and service (iBook Store). Then to add insult to injury Macmillan gets cozy with Apple so I understand Amazon's need to attack.

And Steve Jobs wasn't being coy about it, saying this morning: "Amazon's done a great job of pioneering this functionality with the Kindle. We're going to stand on their shoulders and go a little further."

-Jennifer Van Grove, Mashable

I just feel that Amazon has the wrong strategy in play. Let's take a quick look at the some of the specifications:

Amazon Kindle DX
  • Price: $489.00
  • Display: 9.7" (16 shades of grey); 824 × 1200 pixels pixel resolution
  • CPU: Freescale 532 MHz i.MX31L
  • Touch Screen: None
  • Connection: Amazon Whispernet (3G)
  • Applications: scheduled for later this year
  • Productivity Suite: None
  • Intended Purpose: eBook Reader
Apple iPad
  • Price: $499.00 (model: iPad Wi-Fi 16 GB)
  • Display: 9.7" LED-backlit with IPS
  • CPU: 1 GHz Apple A4
  • Touch Screen: Yes
  • Connection: Wi-Fi (802.11a/b/g/n), Bluetooth 2.1+EDR, 3G
  • Applications: Over 140, 000
  • Productivity Suite: Apple iWork
  • Intended Purpose: Media Tablet
Looking at this small list of specifications the iPad is a superior device. So how will Amazon fight back? Well, in a bold move Amazon has reportedly purchased a startup company -- Touchco. Oddly enough the company web site states:

Thank you for your interest in Touchco. As of January 2010, the company is no longer doing business.

Touchco is working with an impressive multi-touch technology. These panels are not only inexpensive, less than $10 a square foot, they are pressure sensitive and will react to "an unlimited number of simultaneous touch points." The technology is known as -- interpolating force-sensitive resistance (or IFSR). The IFSR pads will work with color LCD screens. So the next generation Kindle could be a color display with the multi-touch technology. As of this post Amazon will be merging the two teams -- Lab126 (Kindle team) and Touchco.

As I write this post I am arguing with myself. Should Amazon pursue this course of action or would they be better off repacking the current content and offering some remarkable services? These benefits would keep current customers buying eBooks while attracting new ones. Listen, Amazon has a wealth of services that can be bundled into the Kindle experience -- cloud computing/storage, the MP3 store and Netflix. Yes, obviously if Amazon is to compete in this space it must update the Kindle -- IFSR and a color display are a good start. I strongly believe that a combination of the "Kindle 3" and quality content would keep Amazon competitive. Bezos is a very smart man but I would love to see what he is planning as his next move.

My prediction is that Bezos will have a "Kindle 3" with a multi-touch color display. He will (re)package content -- cloud computing/storage and the MP3 store and Netflix or a combination of the three. People will buy the Kindle but it will not be the device it once was. The question still begs -- Will it be enough to compete against the Apple machine?