Amazon acquires Stanza

Something is happening in the eBook market with Amazon today announcing its purchase of the company that owns Stanza, the popular iPhone eBook reader. You might think that the big is taking over the small but, in fact, it may be the reverse. The iPhone as a reader is probably more popular than the Kindle (although the Kindle is also on the iPhone). This is all after Steve Jobs claimed that no one reads any more but then Apple went and promoted the iPhone as an eBook reader with the free, Classics, the highlight.

I’ve read books on both the Kindle and the iPhone and both are superior to the old paper variety and they have a way to go in terms of improvements. Amazon clearly think a diversified strategy is what they need. But I think this signals a new Apple innovation on its way. My guess is that it will be an iPod Macro; an iPod Touch with about double the screen area of the current one (bringing the screen size up to the Kindle) and with a camera in the front for video calls. It will also solve the pdf and graphs reading issues for both the Kindle and iPhone. The big challenge will be battery life and weight but I think they will solve both by giving the new device a flip out stand with the battery in it. We’ll see.

[Update: Maybe not for long. Rumours of a Media Pad.

… a media pad that would let users listen to music, view photos, and watch high-definition videos, the person says. It would place calls over a Wi-Fi connection.

The media pad is smaller than an Amazon (AMZN) Kindle electronic reader, but its touchscreen is bigger than the Kindle’s, says the person who has seen it. Carriers such as Verizon and AT&T are keen on striking deals to supply wireless Internet access to these new small computing devices, such as netbooks, which represent revenue growth opportunities. Phone carriers also fear being cut out of their core markets for supplying land-line and wireless voice services.

“The media pad category might go to Verizon,” said the person who has seen the device. “We are talking about a device where people will say, ‘Damn, why didn’t we do this?’ Apple is probably going to define the damn category.”

Call me Nostradamus!]