The Amazon tablet will look like a PlayBook -- because it basically is.
As you might have heard from my man MG over at TechCrunch, Amazon's definitely got a Kindle tablet in the works, and supposedly looks a lot like RIM's failing (failed?) PlayBook: techcrunch.com/2011/09/02/amazon-kindle-tablet/ Well, there's a resemblance alright, and it's not just aesthetic. Here's how it went down.
My sources tell me that RIM originally outsourced much of the hardware design and production of the PlayBook (gdgt.com/rim/blackberry/playbook/) to mega-ODM Quanta -- a company that builds, and sometimes helps design, hardware for name brands. The time eventually came that Amazon's executives decided to do an Android tablet -- far likelier to respond to the dark-horse success of the Nook Color (AKA "NOOKcolor": gdgt.com/barnes-noble/nookcolor/) than to the adjacent success of the iPad -- Amazon's own Kindle group (called Lab 126) apparently opted not to take on the project, in favor of continuing to work solely on next-gen E-Ink-based devices.
From there, Amazon's team determined they could build a tablet without the help and experience of Lab 126, so they turned to Quanta, which helped them "shortcut" the development process by using the PlayBook as their hardware template. Of course, it's never quite that simple, and as I'm told Amazon ran into trouble, and eventually sacrifices were made (like using a slower processor).
Although Amazon did refresh the ID of their PlayBook derivative, I'm told that this first tablet of theirs is "supposed to be pretty poor" and is a "stopgap" in order to get a tablet out the door for the 2011 holiday season -- which doesn't exactly leave the best taste in my mouth. But it's also not the most uncommon story, either: when you're breaking into a new market, sometimes you have to do whatever it takes to get in the game. You may remember how crappy the original Kindle was compared to later models!
I do have high hopes for the long-term prospects of Amazon's color e-reader / tablet business, but as far as this first device that's being announced this week? Unlike those anticipating Amazon's answer to Apple, I wouldn't get my hopes up that this is going to be an iPad-killer -- nor do I think Amazon really intends it to be.
P.S. -In anticipation of the launch, we put the Amazon Kindle tablet up on gdgt! gdgt.com/amazon/kindle/tablet/
With that in mind I would think that would give Amazon pause as to how much this will benefit them. I can see at least two ways this could not work out well for Amazon if the above rumor report is correct. First, this is low(er) end hardware that, when rooted, disappoints or... Second, has a locked boot-loader that drives away the consumers who would give this an air of success (if my underlying assumptions are correct regarding the reasons for the success of the Nook Color).
Its tough to say but given how much I like my Kindle I hope that Amazon delivers something that is, at the very least, good.
Media isn't a great business for Amazon (or Apple or any retailer) - you pay large upfronts, recoupment risk, and many resort to loss leaders for traffic. Apple could do more with media, but you rightly point out, doesn't really care. Amazon largely discounts their media (music, video but doesn't have to in books) because it makes $$ from Prime - lots of it (as well as from general e-commerce traffic. And will tie media, hardware, discounts, their back-end, their browser technology and all kinds of stuff into a virtual circle which keeps you coming back.
Ultimately they both seek a similar goal - become they primary provider to you and your household for an integrated hw/sw/content experience
Being #2, 3, 4, or even 5 can be quite profitable.
Amazon knows the KindlePad doesn't have to dethrone the iPad.
The difference here is that There already is a Nook Color which could easily be matched by Amazon (and even bested with the tie into other Amazon services) but at what cost? Without better numbers from B&N (which are not likely to be released) who knows how many Nook Colors are purchased and used as intended compared to the number that are rooted to be an affordable tablet option.
That's a long way of saying that this seems a little different and, if the rumor(s) above are correct jumping in just to be in the game may not work as well this time around for Amazon.
I think next year we will see the Air and the Scribe, the two models which Amazon actually INTENDED to get to market rather than essentially buying a product design "off the shelf" simply because they need to have SOMETHING and are too far behind on their in-house products.
I can only hope the brand damage done by the relatively inferior product coming to market this year together with met demand potentially taking away sales of the more capable products later does not harm the Amazon products overly much.
Why? Do they have an Amazon-branded answer to other popular smart devices and gadgets? No. Just the Kindle, which has been such a success for them.
They already benefit passively as the varieties and numbers of new smart devices thrive. They should focus on being the #1 best online shopping destination, as Google is synonymous with search. I myself am a big Amazon shopper.
Just like how Google benefits from all smart device growth, whatever the OS, as long as it remains king of the search engines. Another search engine gaining the upper hand is the only true threat to Google. Amazon logic should be similar in my opinion. They should not get distracted by dozens of other products and services, as Google tends to do.
They started off long ago as a book-seller, and eReaders that use passive technology to make a truly pleasurable book reading experience is where they should focus, IMHO. They pretty much own that market now, so they should guard their lead. Otherwise a true Kindle-killer could arise...
Of course it would benefit them if they can produce a winning tablet that is a window into Amazon's world, I'm not denying that.
It's just that they now have a decent movie library, a better music library and the best books library . And good apps to sell this media are available now for iOS and Android, so why should they be rushing a tablet to market? Would they look bad if they took more time? Not to me. There was no expectation that they would jump into the tablet fray.
If anyone looks bad here it is Microsoft, RIM, Motorola, Nokia and all the other gadget makers who got blindsided by iPad and iPhone -- they are the ones, in my opinion, who must eat crow and who "have" to rush something to market.
I just discovered this forum. The high calibre of the comments and the civil manners are refreshing.
The thing is, it costs about $100 just to ship you an empty consumer electronics box that satisfies all legal requirements in your local jurisdiction. If you want a product in the box, that is extra. That is why stuff at the $100 price point is either hideously obsolete or total crap. You are essentially getting the device for free. So when you say you want a 7-inch ARM tablet with touch and decent battery life for $114 that is asking for a Unicorn, something that simply doesn't exist. They would probably have to find $200 in subsidies … that is a lot of money. Then if the user roots it and shares how to do so online and 25,000 nerds buy Amazon tablets overnight and root them and never use them to shop at Amazon, that is an overnight loss of $5,000,000.
iPad "should" start at $799. The fact that it starts at $499 is like a message from Apple, "don't even bother to clone this puppy." Apple caused you and me and other consumers to think that a $250 Amazon 7-inch tablet is hideously expensive, because it is 10% of an iPad at most for 50% of the price. But the reality is that the Amazon tablet at $250 is cheap. It is going to have to be a piece of crap, basically, to even be that cheap. That is only $100 in 2001 dollars, it is almost nothing.
The confusing thing today is that Apple is the one who has economies of scale, not generic makers, because of Apple's high volumes and because of contract manufacturing. Everything is outsourced today except the part that Apple does ("Designed by Apple in California" … "Made in China") and they can use as few or as many ODM's as they like to make 10's of millions of each of their tiny handful of different products. So the Apple product does not define the high-end price, it defines the low-end price in that particular market segment: iPad is the cheapest tablet PC; MacBook Air is the cheapest ultralight, iPhone is the cheapest high-end smartphone; iPod nano is the cheapest high-end music player. Anything cheaper than the Apple product has to be badly, badly compromised. It will have almost no storage, a terrible screen, viruses, and it will be huge.
So waiting for a better value than iPad could be a long wait. It's been 10 years since iPod and no better value. Even Zunes were always $10-$50 more than iPods.
Keep in mind that supposedly Amazon will be offering Amazon Prime membership as part of the deal, so you are looking at $170 tablet in the end. Amazon has bumped up their Prime free streaming with some decent content recently, so this will attract more people.
Expect this model to drop down by $50 or more next year a month or so prior to the next gen Amazon tablet launching.
Only a fool thought the iPad would drop out of existence with some killer release. iPad will slowly decline until Apple figures out a way to offer something new and exciting (iPad 3 won't be it).
iPad was only released in 2010, but it is both a kind of iPod and a kind of Mac. It could have been called "iPod PC" or "MacBook touch" just as easily as iPad. Easier, actually. The iPod line is over 10 years old and the Mac is almost 30 years old. Even iOS is almost 5 years old. iPad is not going anywhere. The latest news in iPad is they just brought a 3rd factory online in Brazil and doubled production capacity.
What is hard to understand is that at the same time Apple has been rapidly growing, all of their competitors have been rapidly shrinking. Even HP cannot maintain their consumer business, and it is marginally profitable. Acer just took their first quarterly loss. LG is about to get out of phones, they pay each user $1 to buy an LG phone … not a good business model. Motorola? Who knows what is going on there? So the tendency to think of Apple as just one of 10 similar competitors is incorrect. Apple is bigger than their competitors. In some cases, bigger than all of their competitors in a particular market combined.
Also, you cannot underestimate the impact of profitability on business. Profits are everything. Apple's 4 major product lines are all responsible for more than half of the profits in their markets. Imagine all handset profits (including feature phones) are represented by 3 identical pies. Apple eats 2 of them, and all the other phone makers share the other 1. So not only does that mean Apple has money to invest in making their products even better, it means their competitors do not. Their competitors are barely hanging on. The most popular $500 PC is iPad, and nobody else can make anything similar yet. The most popular $999 PC is MacBook Air, and nobody else can make anything similar yet. Apple's competitors are getting murdered.
The only conceivable threat to iPad is Windows 8, which is Microsoft's build-your-own-iPad toolkit for generic hardware makers. Well, it is so far away that the first holiday season where iPad will go up against Windows 8 "iPads" will be 2013, a full 2 years from now. Microsoft and Apple have the world's only 2 consumer PC platforms and application platforms. Nobody but Microsoft even has a chance to compete with iPad. Android runs baby Java phone apps almost exclusively, with very limited functionality. The native Android platform is so immature that developers have to write to the hardware, they have to make a different app for each SoC that Android runs on. And they have only a handful of native developers as yet. And as a PC OS, Android is still in the 1990's. They have a decade of work to do to get to the level of the 2007 iPhone.
If you don't like iPad, that is fine. It's not made for gdgt readers, it's made for everybody else but, basically. It's made specifically for the 80% of humanity who never owned a PC yet, who find themselves a little bit adrift in a world where their CD player and DVD player and now even books have essentially been replaced with computers. Imagine what that is like if you don't know how to use a computer. The majority of humans have not even touched their hand to a mouse. Not ever. iPad is like a life preserver for these users. Especially at $499 with $10 office apps, $5 video editor, $5 music and audio editor, no viruses, auto everything, and free Genius Bar service. Only Apple has ever even attempted to serve these users. Now, they represent the bulk of the market for computers.
So iPad is not going anywhere. The idea that Apple or iPad is in any kind of trouble is just ridiculous. Their primary problem is lack of competitive pressure. They have to keep outdoing themselves every generation. Some companies find it hard to do that.
Hamranhansenhan, I think you are very correct on many points. There is nothing out there, nor will there be, that will be in any way an "iPad Killer". Just as Linux was never a Win95/XP killer. And Apple's ability and insight to hold their products to extremely high standards extends not only to the hardware and software, but also the profit margin. Rarely does a company match Apple's hardware profit margins and if they do, it is not for extended periods of time nor for the diverse range of products. They are well known in all industries for this ability.
Additionally, their understanding of how to innovate and make money from the entire stack (hardware, Apps, media, etc.) signifies that they will continue to make money from this for a very long time. Even though Android has made significant progress in the number of devices out there, App and media companies would not dare to ignore the iOS platform. And more often than not, iOS is the initial platform that is supported. I think this will continue for a while.
However, I must now mention some points in which I disagree. You do not seem to be aware of how much Android has matured. Yes, there is some ability to develop to the hardware, but this is not a widespread phenomenon. Nearly all apps are developed to the Android platform, not the hardware. Yes, there are issues with the different Android platform versions out there and puts additional pressure on developers to do more work to ensure their apps work well. I believe this will continue as it is a side affect of allowing the platform to evolve very quickly. Google HAD to do it. If it held it Android back and limited how quickly it could mature, it would have not matured quickly enough to be relevant. However, Google has made good progress in pushing manufacturers to update devices and ensuring that this is less of a problem in the future. And it will allow the hardware to mature faster allowing for evermore impressive functionality at a faster pace. Faster than Apple would allow given in their highly controlled environment.
Secondly, you are correct that Apple dominates the other device manufacturers in quantity of devices, revenues and margins. However, this is irrelevant. Apple is not competing against HTC, Motorolla, Samsung, etc. Apple is competing against the Android PLATFORM and is losing. When you add up all of the Android devices sold by all of the device manufacturers, they collectively dominate Apple. And this IS in fact profitable. HTC, Samsung and Motorolla all have shown a significant boost in revenues and profits directly attributed to the Android platform. So to say that it isn't worth the effort to develop and Android device, then I ask you, where would they be if they did not? They're getting nothing from Apple. So unless they want to be in RIM and Nokia's position, they have to. And it turns out they actually can make good money if they execute well. So a lot of companies get to make some good money instead of just one company making oodles. Apple can destroy a single company. But when it has to compete against a whole sector, it has to embrace others. Otherwise it will become a niche market as it was in the 90's and early 2000's, with around 5% market share. And that percentage of market share will not be enough to maintain the leverage and interest of the App developers and media outlets. This trend has been going on for a while and is backed up by factual numbers, such as blog.nielsen.com/nielsenwire/online_mobile/in-u-s-... . Don't get me wrong, this will be a very slow process and iOS will be relevent for a very long time.
Please do not confuse my post as just another Android phanboy bashing Apple. Apple will likely innovate its way around my key arguments. Or they will create a whole new platform concept beyond my comprehension that completely changes the game - again. I hope they continue to be as successful and innovative without Steve as they were with Steve.
What we all need to keep in mind here is that this is all awesome for us. Competition is GOOD! I'm still rockin' my CyanogenMod 7 original Droid and will definately buy another Android device at some point. But I am eagerly looking forward to what Apple will present next month. They rarely disappoint. The success of either platform boosts the other, raising the bar to innovate and create new cool toys for us to play with.
That matters quite a bit to developers. You have more iOS total users AND they've proven to be much more likely to pay for apps.
This is from 4/2011, but feel free to post a reputable source that's more recent if you can find one.
"Google Inc.’s Android might be the most popular smartphone platform, but if you add other mobile devices like tablets to the mix, Apple Inc.’s iOS beats Android in the U.S. by a wide margin — 59% to be exact."
Also, anyone saying an Android Tablet *today* delivers a "premium experience" over an iPad, though objective, is by far in the minority of opinions.
The vast majority of those Android devices are phones which is why I suggested if you compared tablets to tablets iOS might win for now, but it doesn't take a psychic to see which way things will go there too.
The hardest thing for me to understand is why the analysts keep hyping this Amazon tablet as a major challenger to the iPad when it clearly is not, nor did it ever seem intended to be as such.
Will be interesting to see what advertising disappears sometime soon...
Really not altogether dissimilar to what Apple did with the iPad, which it's easy to forget now, was nowhere near what people we're hoping it would be. Where they traded on the X millions who'll buy anything with an Apple on it to gain a significant first mover* advantage. (One that their practices/policies will eventually negate as happened in the phone space, but that's neither here nor there).
* yes I know they weren't the 'first mover' on 'tablets' by any stretch, but they were on the current market of "tablet as inflated PMP that traditional computing features will be added to over time."
Also, your characterization of iPad is way off. That is ridiculous. iPad was not rushed. They worked on it for 7 years, and it includes the OS X core which they worked on for 7 years before that, and which was based on NeXT and Mac, which go back another 10-15 years. They did 3 years of iPhone and 2 years of App Store before they even shipped iPad. And nobody, but nobody was disappointed with iPad. Some thought it would have double the power, but they also thought it would be double the price. At $499 in 2010 dollars it was cheaper than the original iPod, which was something like $675 in 2010 dollars ($399 in 2001 dollars.) And the original iPod was 2 inches thick and had a 1 inch grayscale screen and dozens of moving parts.
And there is no army of people who will buy anything with an Apple logo on it. That is false. That is one of many Apple myths. The reality is: Apple has established a reputation for shipping only great products (the "only" is the key word) and so there are Apple users who you can ask them in late 2006 "will you buy an Apple phone if they ship one?" and they say "yes" and it seems like they are brainwashed. They didn't even see the phone yet! However, they will never buy the device sight unseen. What they really are saying is "yes (if the Apple phone meets the same high standards for design, ease of use, functionality, usability, desirability, fun, excitement, and extremely high value that I have come to expect from my Apple products." That is not a preorder, that is like a list of demands that must be met before the sale. It has to be as good as the Mac or it is a failure.
So if iPhone shipped and it was like the T-Mobile G1, it would have sold like a G1. Apple's users are CRAZY DEMANDING. If they weren't, they would have just bought any generic PC. People write Steve Jobs and complain that their Mac crashed once in 3 years. When the iCloud logo was revealed, there was an article up only moments later praising the logo's use of the golden ratio (1.6:1). It's a cloud icon, you know? Does it have to be the golden ratio? Yes, according to Apple and their users' high standards. Everything Apple does is just ridiculously critiqued by Apple's users. Apple gets nothing for free. They have to earn everything again and again. Every product has to be a world class earth-shattering hit. That is why they are. Anything less and it is going to be a bad, bad day for Apple, not a good day of sales and a chance to fix it later at all.