Amazon Said to Buy Touchscreen Startup: Implications for the Kindle and E Ink Display

Seattle-based Amazon has acquired Touchco, a touchscreen technology company based in New York, according to a report in the New York Times, which cites an anonymous source with knowledge of the deal. The acquisition raises some interesting questions about the future of the Kindle device, Amazon’s competition with Apple, and the role of technology firm E Ink out of Cambridge, MA, which makes the current Kindle display.

First of all, neither Amazon nor Touchco has confirmed the deal, and no financial terms were given. But according to the report, Amazon will merge the New York University spinout’s technology and staff (about six people) into the Kindle hardware division, Lab126, based in Cupertino, CA.

Second, nothing will happen right away. This kind of integration will take some time, probably at least a year. So don’t count on a touchscreen Kindle being available next Christmas, unless Amazon has other plans already underway.

Third, this doesn’t mean the E Ink display is going away in future versions of the Kindle. From what I can tell, Touchco’s force-sensitive resistance display (which can be transparent) could sit right on top of the current E Ink display, and would be separately connected to the microprocessor on the device. That would add touchscreen capabilities to an otherwise unchanged appearance and reading experience, while giving the Kindle on-screen controls similar to those found on Sony’s Touch Edition and Daily Edition e-readers. So then the keyboard under the current Kindle screen could potentially go away, and the device could get smaller, or Amazon could offer different screen sizes.

One issue is that the deal would mean Touchco’s technology, which hasn’t made it to market yet, won’t be available for a broad range of devices—it will be folded into Amazon’s proprietary tool chest before ever seeing the light of day. But if the integration goes well, it will probably boost Kindle sales—which would be good for all parties involved, including E Ink.

Unless, of course, Amazon decides to offer a full-color touchscreen device to compete more directly with Apple’s iPad tablet. Some prominent Seattle techies have weighed in recently about whether the iPad is a Kindle killer, and how Amazon needs to raise its game. Even before the iPad was unveiled, Amazon also announced that it wants software developers to create applications (“active content” like games and puzzles) for the Kindle Store, to be offered later this year.

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