An Apple Mac Tablet Could Challenge Amazon.com's Kindle

 
 
By Nicholas Kolakowski  |  Posted 2009-05-23
 
 
 

Rampant rumors have Apple releasing a Mac Tablet computer with multitouch capability within the next year. Such a release has the potential to challenge many competing companies in both the PC and mobile device markets.

If the rumors of the tablet's capabilities prove true, there is also potential for it to challenge Amazon.com's increasing lucrative Kindle e-Reader mobile devices, which offer similar flat-screen functionality for e-books.

Expected in the first half of 2010, according to analysts from research company Piper Jaffray, Apple's tablet device will feature a 7- to 10-inch screen and utilize Apple's multitouch patents. Speculation puts the price point at somewhere in the $500 to $1,000 range.

The rumored Apple product immediately attracted a good deal of online buzz, including a flurry of Twitter postings and a number of online pundits speculating about the device's potential capabilities.

However, analysts were quick to caution that the device, whatever final form it takes, should not be seen as a mininotebook, or netbook, similar to what other companies such as Dell have released in order to appeal to recession-strapped customers wanting to pay less for computing power. Instead, according to Gene Munster, the lead analyst of Piper Jaffray's report, the Apple tablet will likely "fill the gap between the iPod Touch and the MacBook."

Apple itself would probably like to downplay any netbook angle. In an April 22 conference call, Apple Chief Operating Officer Tim Cook told financial analysts that netbooks were "not a segment we would chose to play in." Mac shipments in 2009 have stayed strong despite the global recession.

"We are anticipating a new category of Apple products with an operating system more robust than the iPhone's but optimized for multitouch, unlike Mac OS X," Munster said in the report. "The device's OS could bear a close resemblance to Apple's mobile OS and run App Store apps, or it could be a modified version of Mac OS X."

Whatever the final form of the operating system, there is a chance it could include the ability to run applications from Apple's App Store-which means it could run any number of e-reader applications, including Amazon.com's own Kindle for iPhone App.

And therein lies a potential back door for Apple to make a claim on Amazon.com's e-book market, where Amazon.com has a substantial head start.

Amazon.com released the Kindle DX, the successor to the Kindle 2, on May 6 at a high-profile media event in Manhattan, N.Y. In addition to the Kindle DX's 9.7-inch screen, making it larger than the 6-inch Kindle 2 that rolled out in February, the Kindle DX includes an auto-rotation feature for pivoting onscreen pages and 3G wireless access to Amazon.com's 275,000-volume library.

The device retails for $489, compared with $359 for the Kindle 2. Amazon.com has signed deals with textbook companies and newspapers such as The New York Times, The Boston Globe and the Washington Post to deliver content to the devices.

The Kindle e-reader devices have done well for Amazon.com, with analysts predicting that sales will top $1.2 billion in 2010 and $3.7 billion by 2012. But does that mean Apple wants a slice of that pie?

"Something that Apple tends to be good at is letting other companies take a lead in a market, learning from their mistakes and then coming out with a product that doesn't have those weaknesses," Charles King, an analyst with Pund-IT, said in an interview.

However, Apple may be hunting bigger game if it makes a tablet.

"There might be an opportunity there for Apple [in e-books]," King said. "But I don't know if the potential market for downloadable books would be attractive enough" for Apple to focus the bulk of its marketing energies on that particular angle, he said. "People are thinking this is going to be an upscale netbook."

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