Touchscreen Alone on Kindle Isn’t Enough to Compete With Future Devices

When Amazon (s amzn) got into the hardware business with its original Kindle, some were skeptical that the company could deliver. What does an e-tailer know about designing hardware, right? Actually, that first design had a forgettable feature or two — the long next page button, for example. But in the end, Amazon delivered and then improved. Now there’s word that Amazon has bought a touchscreen company. Logically, one might assume that the Kindle 3 will include a touchscreen to assist with page navigation and perhaps to enter notes on the display. That can’t be all to expect and if it is, I’m not sure it’s enough.

For starters, touchscreens on e-book readers aren’t new. Sony (S sne) has used one on its devices for well over a year, starting with the now discontinued PRS-700 that launched in October of 2008. As nice as having a touchscreen is, adding one didn’t make Sony the market leader in this space. While nobody seems to know the sales numbers, it’s a safe bet that Amazon already leads the pack in terms of e-book readers. The company did that — without a touchscreen — based on a wide variety of content, low prices, integrated wireless capability and ease of purchase. Will a touchscreen help? Probably, but again, I’m not sure it’s enough, so I think there has to be more in the works.

Now more than ever, the Kindle has to do battle against other devices that can also display e-books yet do so much more. I’m not arguing that the reading experience on a traditional LCD rivals that of the Kindle for long periods of time — I use my Kindle 2 daily because I can read for hours on it. Instead, I’m arguing that if a feature is considered “good enough” for most consumers, they can live with it in a converged device. Integrated cameras in cellular phones is a good historical example. Given the choice, most folks would certainly use a higher-quality dedicated camera over a lower-resolution integrated one with lower quality optics. For basic needs, though, that integrated cell phone camera that’s always with you is often “good enough.” And I only have to look at our recent web survey to understand if e-book capabilities are appealing in a converged web tablet. Over 1,000 of you participated in the survey and a whopping 85 percent said that e-book capabilities were either important or very important.

I don’t believe that Amazon thinks simply adding a touchscreen alone to its Kindle line will compete well with devices that are coming down the pike. The reading experience is definitely an advantage, but can it trump slates and handhelds that can do more of what people want to do on a daily basis? I’ve already personally considered selling my Kindle 2 and my iPhone (s aapl) in favor of an iPad for this very reason. I’m far from making up my mind on that — it’s just a passing thought that I won’t revisit until I can actually use an iPad. But it comes down to device convergence for me. I won’t accept a converged device if key features I need are less than mediocre. If they’re “good enough” and I can gain extra useful features though — that’s a different story. So I wonder what else Amazon has planned for its touchscreen startup purchase in the way of future Kindles — could they, too become web tablets with application stores?

Of course, I’m predicating my whole thought process on Amazon adding a touchscreen to the Kindle. There’s another interesting possibility, however. I’ve noted in the past that Amazon is missing a huge opportunity with its MP3 digital music store. More than any other company I can think of, it has the pieces in place to offer digital music storage in the cloud that can be streamed and cached as needed. If i’ts been working on this concept at all in the form of a portable music player, a touchscreen interface would be a nice touch, no? And while it’s easy to say that Amazon will never get into the portable media player hardware market, how many of us truly expected the Kindle from an online retailer? How many of you ever figured that Google (s goog) would be selling phones, for that matter?

What’s your take on Amazon’s purchase of a touchscreen company? Do you think it’ll simply apply the technology to the next Kindle for e-book reading or will we see a new device with greater capabilities?

Related research from GigaOM Pro (sub req’d):

Does Connectivity Have us Diverging from Convergence?