As Competitor Posts Big Losses, Amazon in Talks to Launch Kindle in China

Today, TheNextWeb is reporting that Amazon has confirmed it’s planning to officially launch the Kindle in China, and is currently in talks with government agencies. Probably coincidentally, this news comes on the same day that Hanvon Technology, the makers of China’s most popular domestic e-readers, announced Q3 net losses of 104 million RMB (over $16 million).

Amazon’s Kindle, which has been available in China for years but only on the gray market, already supports Chinese characters and texts. But the gray-market e-readers don’t work with Amazon’s bookstore, and Hanvon’s e-readers — directly targeted at the Chinese reading population — have been more popular here.

Hanvon’s losses this quarter were attributed mostly to the company’s lowering of e-reader prices by a significant margin. The company also spent money “optimizing” its R&D projects and invested heavily in important projects. Both are signs that the company sees Amazon coming for their market share. It’s even possible the “important project” is an inexpensive tablet similar to Amazon’s Kindle Fire.

Amazon, which yesterday announced that it was removing the “Joyo” from its name in China (Amazon bought a domestic startup called Joyo to enter the Chinese e-commerce market in 2004), is clearly making moves to establish itself more firmly in the Chinese market. But it faces competitors in all directions. China’s e-commerce sector has numerous powerful players like Alibaba and 360buy, and in the e-reader market it will have to deal with Hanvon, assuming the losses haven’t done it in by then.

With a Kindle launch, Amazon also faces a challenge from the Chinese government, who is unlikely to accept a free and uncensored book marketplace. Even if they’re given the green light to launch at all, Amazon may be forced to choose between offering a censored, China-specific market or offering an uncensored market and seeing it blocked or otherwise disrupted.

An official Kindle launch in China might also spell the end of another, unintentional perk of the device. Currently, Kindles can surf the internet completely uncensored, thanks to one of the vagaries of China’s Great Firewall. That capability has made the device popular among fans of blocked websites. So far, the government has done nothing to close the loophole because the Kindle is not officially sold here and users are few. But an official Kindle launch here would almost certainly mean the end of that particular (and probably unintentional) feature.

[Via TheNextWeb (English) and TechWeb (Chinese)]