Amazon Buying Touchscreen VendorAmazon Buying Touchscreen Vendor

Amazon has reportedly purchased Touchco, a maker of touchscreen technology that could be used in a Kindle overhaul.

Amazon plans to fold Touchco's technology and staff into its Kindle hardware division, the New York Times reported, quoting a person briefed on the deal. Amazon on Thursday declined to discuss the report.

"We don't comment on rumors or speculation," Amazon spokeswoman Mary Osako said in an e-mail to information.

Touchco was unavailable for comment. Its Web site contains only a single page that reads, "Thank you for your interest in Touchco. As of January 2010, the company is no longer doing business."

Touchco's multi-touch technology responds to different levels of pressure, as opposed to requiring contact with skin like Apple's iPhone. While the iPhone's capacitive touch can track up to five fingers at once, Touchco's interpolating force-sensitive resistance technology supports unlimited simultaneous touch inputs, the Times said. In addition, the technology is made for color displays, is low power, and is inexpensive, costing as little as $10 a square foot.

Touchco's technology would make it possible for Amazon to drop the keyboard on the Kindle for a virtual keyboard, and replace the black-and-white E Ink display with a color screen that could support multimedia as well as electronic books. If Amazon decided to go this route, then it would be in a better position to compete against Apple's iPad, a tablet computer introduced last week.

The Kindle's core function today is to display e-books and digital versions of newspapers and magazines. In order to compete against the new category of multimedia tablets, which support e-books, video, graphics, and music, Amazon either has to reduce the price of the Kindle, or take it into the tablet computer market, analysts say.

Recent Amazon announcements indicate the company is heading in the latter direction. The online retailer last month launched a software development kit for third-party developers to build applications for the Kindle. In addition, Amazon said it would offer the applications through the Kindle Store.

Apple's launch of the iPad is expected to jumpstart the multimedia tablet market, which ABI Research predicts will reach 4 million shipments this year. By 2015, the number of tablets shipped is expected to reach about 57 million units annually.