With The Kindle Yet To Hit China, ZTE And China Unicom Grow E-Book Venture

Amazon (NSDQ: AMZN) has a substantial operation in China, but it has yet to take its Kindle e-reader into that market. That has left the door open for several other players to make a move into country’s market for e-books. The latest news in that department is that mobile handset and equipment maker ZTE is investing 2 billion yuan ($314 million) to help expand the WoReading e-book service from China Unicom, the number-two mobile operator in the country.

The funds will be used to expand existing facilities in Changsha, including increasing the number of people working on the service to 1,000 from 300, according to an article in Bloomberg.

WoReading currently has around 21.5 million registered users, who can use the service to download books, newspapers and magazines to their mobile devices. The service competes squarely with another operator-led e-book service, Shouji Yuedu, from the country’s largest mobile operator, China Mobile.

The WoReading expansion is effectively a “chapter two” for the two companies. A year ago, in November 2010, China Unicom collaborated with ZTE to develop a cross-platform app store, WoStore, which now has 60 million users.

The move is part of a bigger strategy from ZTE to create a new revenue stream around cloud-based mobile services, developed not only for its own devices but on behalf of third parties like mobile operators.

Meanwhile, the market for e-reading — like other wireless services in China, a nation of nearly 1 billion mobile users — will surely continue to be a focus not just for mobile operators but for companies more squarely focused on the business of books.

Amazon in October rebranded its Chinese operation and URL under its own name — after years of operating as Joyo Amazon — and started to talk up the business of finally launching its Kindle e-reader products and Fire tablet in the country. It’s not known how much Amazon currently makes in revenues in China although Goldman Sachs estimates it could be as much as $1 billion in 2011.