Amazon's rumored tablet PC could challenge the Apple iPad if its creators take care to keep costs low and leverage Amazon's assets to best effect.
Rumors abound that Amazon is prepping a tablet PC for
release later in 2011, the latest courtesy of a DigiTimes report.
According
to that May 3 report, Quanta Computer recently "received OEM orders from
Amazon for its reported tablet PC" which will apparently receive a touch screen
from E Ink Holdings. Monthly orders during the peak season "are expected to
reach 700,000-800,000 units," with shipments expected in the second half of
2011.
That adds another layer to the speculation surrounding
Amazon's intentions in the tablet arena. In April, Engadget and gdgt co-founder
Peter Rojas suggested that
Samsung
would join Amazon in building a tablet for launch sometime this summer, one
that ran a variation of the tablet-optimized Android 3.0 (code-named
"Honeycomb").
Thanks to its sizable brand and multimedia
offerings-including downloadable music and Kindle e-books-Amazon would become
an instant competitor in the tablet realm. That being said, even a tablet
backed by the online retailer would face substantial challenges in its battle
for market- and mind-share against Apple's iPad and the various Google Android
devices on the market. Here are a few things that could help an Amazon tablet
make a sizable dent in the tablet realm.
Keep Costs Low
One of the lessons learned from the past few years' e-reader
and tablet PC battles is that sticker price
really matters to your
average consumer. As Amazon and Barnes & Noble engaged in a price war,
driving the buy-in for their respective e-readers steadily lower, it helped
spark an uptick in adoption. At the same time, Android tablets have proven
unable to significantly undercut the iPad's pricing-a key reason why a true
"iPad Killer" has yet to emerge.
If Amazon prices its (hypothetical) tablet at a point
significantly below that of the iPad, it could rapidly chew into its rivals'
market share. Granted, Amazon may need to reconcile itself to thinner margins
in order to do so-but given the price of the Kindle versus its cost to produce,
that's a situation likely familiar to the company's accounting department. The
question is, what constitutes a reasonable low price? $250? $400?
Easy Access to Assets
One of Amazon's key advantages is its prebuilt collection
of products available for download. Want the newest Stephen King e-book or
Radiohead album? It's yours with a few clicks. Want to store your newly
purchased digital wares in the cloud? Amazon's your huckleberry on that front,
too. How about some Android apps? Thanks to Appstore for Android, you can be
playing Angry Birds within minutes.
But none of these services will be much use unless Amazon's
(hypothetical) tablet features a user-facing interface that makes it a snap to
download and open those products. That's a lesson that Apple learned to great
effect with iOS, which allows for quick purchasing and downloading, and one
that Android is still struggling to perfect. In
the latter case, you can download any number of apps, but you're largely at the
mercy of the carriers' "entertainment" hubs for most multimedia
content.
Such an interface would also give Amazon the opportunity to
create something visually distinctive from the flood of tablets poised to hit
the market.
Android 3.0 (or Better)
Unless Amazon's going to follow the lead of Research In
Motion with its PlayBook, and home-bake its own OS, the tablet-optimized
Android 3.0 is pretty much the only game in town when it comes to operating
systems.
Don't Give In to Carriers
When the iPad made its debut, Apple offered customers a simple
proposition: Those with the 3G-enabled
version of the tablet could purchase their connectivity on a month-by-month
basis, with no locked-in two year contracts. Indeed, given the rate at which
the tablet market is evolving, two years is an eternity.
If Amazon does release a tablet with 3G connectivity, then, it could find an advantage following Apple's
model-or even offering said connectivity for free. Again, the latter might
prove too prohibitive for Amazon's bottom line, but it would neatly swipe the
legs from underneath those Android tablets insisting on two-year contracts. Of
course, Amazon could also take the path of least resistance and offer a tablet
that's WiFi-only.
Native Apps
Native apps for email, calendar and other basic functions
could help attract users who might otherwise think anything produced by Amazon
is just another e-reader.
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