Amazon's tablet is coming, but what will it be?
Let's start with a critical question about this tablet: What version of Android will it run? I think there's an assumption that any Amazon tablet will run Android 3.0, Google's tablet-specific version of the OS. However, given Google's recent moves to tighten how OEMs can use Honeycomb, this might not be so likely. In fact, it's entirely possible that Amazon's tablet, like the NOOK Color, will use Android as a base upon which to build a totally customized experience that tightly integrates Amazon services. That integration would let Amazon charge a lot less for its tablet than it would otherwise. The reason Barnes & Noble has been able to price the NOOK Color so aggressively ($250 versus $350 to $450 for comparably-sized and spec'd Android tablets) is because they're assuming you're going to buy a bunch of books from them over the course of owning it.
Amazon will make a similar assumption, except that they won't just be selling you Kindle books, they'd also use the tablet as a platform for selling music (see that cloud locker they just rolled out?), video (you can bet Amazon Instant Video will be a big part of this), and apps from the Android app store they just launched (which is the biggest indication of all that they've got something in the works). You probably wouldn't have something as open as a regular Android tablet (at least not without hacking it), but I think most users would accept the trade-off if it meant a much lower price of entry. And besides, Amazon will probably have a big enough library of apps by launch to help ease the pain of living in a walled garden.
Amazon understands what's at stake, and while they aren't a consumer electronics company, they have shown with the Kindle that they can produce a great product and then expertly tie that product into a content platform. I'm not sure I can stress how non-trivial an accomplishment this is, especially for a company that's mainly known as a retailer. There are full-fledged consumer electronics companies that still haven't figured this stuff out.
If they're smart, they'll be aggressive here and price the tablet at no more than $250. They just don't need to achieve pricing parity with the NOOK Color (since that'll probably be what a lot of people compare it to), they need to come out swinging with a price point that'll draw a strong contrast with the iPad's $500 point-of-entry. A retail price of $199 would be better still. That'd be really aggressive, but Amazon just introduced a new discounted Kindle that shaves $25 of the price if you're willing to look at "special offers" on your homescreen, so it's not as inconceivable as it once might have been. (One caveat: this is all assuming it's a 7-inch tablet, it'd be a lot harder for Amazon to sell a 10-inch tablet for $200 or $250, though they could perhaps come in between $300 and $400.)
The other wild card Amazon has to play is its Amazon Prime program, where you pay $80 a year and get free two-day shipping on most products and end up spending way more money at Amazon than you would otherwise (I speak from personal experience here, I once had a ladder overnighted to me). There have been rumors in the past that Amazon was going to offer a free Kindle to every Prime member, and while it's hard to see them just handing out $250 or $300 tablets, there might be some services on the tablet that are free for Prime members. They do already offer Amazon Instant Video to members for free, offering that same access via a tablet might be enough to convince a lot of Prime members to buy an Amazon tablet (they just need to expand the library first).
When will it launch? I don't know, but I'd guess it won't be too long, probably no later than this summer (the Kindle 3 launched last August). Whenever it is, I'll be surprised if they don't come out with something substantially different than all the other Android tablets out there. They have all the pieces in place, now we wait to see what they do with them.
I believe that in light of Amazon's recent move to offer ad-supported versions of their Kindle that there is a high likelihood that this will also happen to their Android tablet once that comes out. I think they will price their tablet so as to undercut Barnes & Noble by just a tiny margin but enough to get consumers to see there is a difference in price (probably $239 vs. the Nook's $249) as evidenced by their hasty price adjustment on the Kindle 2 to $189 just hours after Barnes & Noble lowered the price of the 3G Nook to $199 (techcrunch.com/2010/06/21/kindle-price/).
Specs (important to people who use GDGT but less important to the average consumer):
While we (the GDGT community as a whole) care a lot about the GBs and the WIFIs in our gadgets I think that the average consumer who Amazon is going to market this thing to on the front page of Amazon.com will only care that the tablet actually looks good as an ebook reader, has an easy to use UI, runs a browser that supports flash and doesn't look like WinMo 6.5, and access to the the Android Marketplace. It doesn't have to be the fastest tablet on the market and it also doesn't have to be the one with the highest pixel density screen around, the cameras that seem to be a part of every new tablet being released these days will invariably have to be there but I don't think anyone looking at buying an Amazon tablet will opt for the Xoom or some other tablet just because it takes better pictures.
Stuff I Could Imagine Hearing Mentioned In The Mainstream Media:
Amazon might consider integrating it's Prime service with the tablet in the form of some Netflix-rival App that would tap into the Unlimited Instant Videos it has recently made available to its Prime subscribers in a very easy to use and pretty way right on the tablet. I could imagine this integration could take the shape of a free 1 year subscription to Amazon Prime with the purchase of an Amazon tablet, that way everyone who buys the tablet is instantly jazzed even more on the Amazon environment because of the whole year of free video content they'll be getting to enjoy. This free membership with the purchase of a tablet could also get people who are only the occasional Amazon user into regular junkies once they see how easy shopping is knowing that free 2-day shipping is always included.
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As a long-time Amazon fan and Prime subscriber, I am pretty excited about this possibility. I haven't found any reason to justify a tablet purchase yet as my Nook and phone fill all the needs I have, but an Amazon tablet might make me start saving my pennies.
The only question that remains is: keep the physical keyboard or drop it? Keeping it would give them some much-needed differentiation and they might even be able to use it as a tie-in to Amazon Cloud Storage and promote the tablet as the best way to create documents that get stored in there.
The folks at Amazon are smart, and I'm sure it might turn out to be even better than we expect.
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If those two would team up, Apple would face a serious challenge to its hegemony. If it is merely an Android platform-consumption device people will buy it--if it is cheap enough, people will buy it in droves---but AMZ won't be able to chase enough iOS consumers off the rails to allow them to utilize the Kindle Color as the best or only means to partake in the Amazon economy. Amazon would still need to develop iOS apps to maintain/grow their market share as as an e-tailer.
There is no good way to dominate as a platform as Apple has, unless they are willing to risk some of their main business (selling stuff people want to buy) to leverage alongside a new and better experience (web OS?). If amazon wants to sell hardware at a loss just to get people to buy from them, where is the upside? Unless they want to compete with Apple's 30% take of the mobile app market, it does not seem to be beneficial to their business model to exclude so many customers. Why not just make everything they sell available everywhere? That's why I buy e-books from Kindle and audiobooks from Audible.
Samsung makes sense, although like with Apple, their participation might not be pronounced. I think they would make a cool team, Samsung is getting really good at hardware. Amazon is well positioned for this and has a great deal in common with Google in that their infrastructure positions them well to offer a rich set of services with the tablet.
We hear a lot about all the Android tablets coming but the competitiveness of the Android tablets is still pretty soft when compared to the iPad 2. I think it would be short sighted for Amazon not to take advantage of Android 3.0 as well as additional services from Google. Google Maps, Google Navigation, Gmail, Google Calendar, etc. Those are pretty sweet services. You also benefit from continued contribution from Google personnel. Add services from Amazon and you have a very compelling offering. Both firms offer sweet services independently but why not aim for a higher price point and better margins? Seems to be working well for Apple.
I can't say specifically why Amazon partnered with Samsung, because I don't really know, but my guess is that Samsung was able to make it attractive enough from a financial standpoint and Amazon probably felt like they could deliver an iPad-quality tablet.
Should also mention that this may be something neither party ever confirms publicly.
And slightly OT, not to say you don't have reliable sources, but isn't it a little presumptive for BI to post your conjecture as news?
I can't control what Business Insider writes.
I personally wouldn't mind it being similar to the Kindle 3 in design. I think chopping in the keyboard and adding a matte 7" screen would actually look nice with that understated grey plastic body, if they could keep it about the same weight and thickness. I just persuaded my mum to buy a Kindle after convincing her that she wouldn't get a decent tablet for under £350, even though I knew Amazon were rumoured to be working on something. If they manage to hit the right price point with this then I'm pretty sure it'll sell stupidly well and show the other Android tablet makers how it's done.
If you are correct, great. And it means the cord cutters will have a true alternative. I'm just not sure though how they can get to your price point. More below. Thanks.
I don't count the Nook, as it's not nearly the tech these modern tablets are.
As much as I've loved Archos in the past, I bought and immediately returned the 101 because the display was the worst I'd ever seen. I don't know if the 70 is the same way, but they don't count anymore.
The one I didn't know about was the 7" Tab for $349. It's great that it's gotten that low.
But I still think that manufacturers can get their 10" tablets out there for less than the iPad. The Asus EEE Pad Transformer was just announced at $399 today, which makes it a mere $50 more than the 7" alternative. I don't have a problem seeing Amazon release a 10" tablet for $300, given the incentive they have that you mentioned.
Mostly this is just me projecting what I want. I want to read comics on a tablet, which just isn't good on a 7". :) So I'm hoping Amazon does a 10"
IMO, "Prime Extras" should probably be services related - similar to what is currently offered for Instant Videos, perhaps a music subscription (like Spotify) and extra space in the cloud to store stuff from the Tablet. This cloud storage/access would be integral to the customer experience of the table.
Another minute piece of evidence: my alarm bells regarding an Amazon tablet started going off when I discovered Lab126, which appears to be what they're calling their consumer electronics arm, interviewing on my college campus. I mean, it seems like if Kindle was really all they were working on and all they would ever work on, they'd just call it the Kindle division...
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