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Amazon's new tablet is expected to be a worthy competitor of Apple's iPad  (Source: bindapple.com)
In order to achieve this, Amazon must sell its new tablet "significantly" below its competitors' prices and have enough supply to meet consumer demand

Google's Android operating system may be beating Apple's iOS in the smartphone area, but Apple clearly takes the cake when it comes to tablets. For now, at least.

Apple has sold nearly 30 million iPads since the gadget's original launch in April 2010. Since then, many other competitors such as the BlackBerry PlayBook and the Motorola Xoom have attempted to match the iPads popularity, but were unsuccessful in doing so. Hewlett-Packard even decided to kill off its TouchPad tablet and webOS operating system due to problems like slow hardware releases, mediocre execution, and overproduction which made the tablet unable to compete.

But there will soon be a new competitor that may give Apple a run for its money in the tablet arena: Amazon.

According to Forrester Research, an independent technology and market research company, Amazon could sell as many as 5 million tablets in the fourth quarter. But in order to do this, it must sell its new tablet "significantly" below its competitors' prices and have enough supply to meet consumer demand. If it can pull this off, Forrester Research estimates that Amazon could sell between 3 million and 5 million tablets in the last three months of 2011.

In addition to lower prices and increased supply, apps are another important area to consider in regards to tablet sales. Apple has around 100,000 custom-built iPad apps where Google's Honeycomb platform has less than 300.

"If Amazon's Android-based tablet sells in the millions, Android will suddenly appear much more attractive to developers who have taken a wait-and-see approach," said Sarah Rotman Epps, of Forrester Research.

Epps predicts that consumers will especially jump to buy an Amazon tablet if it is lighter and smaller like a Kindle, yet powerful with a browser, OS and apps. She said Amazon could have a "killer product" if it combined the Kindle with the power of an iPad.

"So far, Apple has faced many would-be competitors, but none have gained significant market share," said Epps. "Not only does Amazon have the potential to gain share quickly, but its willingness to sell hardware at a loss, as it did with the Kindle, makes Amazon a nasty competitor."

Amazon's tablet will feature a 9-inch screen and the Android operating system. It is due to launch before October 2011.


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Selling at a Loss
By ltcommanderdata on 8/29/2011 9:40:40 PM , Rating: 2
Amazon can afford to sell their Android tablet at a loss, because of vertical integration they can make the money back through their own app store, book store, music store, etc. That will certainly position them to challenge the iPad.

I'm curious what this means for the other Android tablet makers though? Samsung, Acer, LG, and others don't have the digital store presence to be able to afford selling their hardware at a loss. Is there much room between an entrenched Apple iPad at the high-end and an Amazon willing and able to sell a feature competitive tablet at a loss while offering high levels of integration through Amazon's own stores and services?




RE: Selling at a Loss
By tayb on 8/29/2011 10:42:05 PM , Rating: 3
You can say the exact same thing about Apple except that Apple is in an even better position with vertical integration and they are also sitting on vast sums of money. I certainly hope Amazon spurs a race to the bottom price-wise I just hope it doesn't end up being a two pony race. I would also be worried that a $300 iPad would destroy the competition and leave the tablet landscape 80/20 iOS/Android. I guess careful what you wish for.

On a personal note I own an iPad and I quite like it. Managed it on craigslist for a clean $300. Right after the 2nd gen came out. I'm excited to replace this thing in 2012. The market is heating up, should be great.


RE: Selling at a Loss
By Jeffk464 on 8/29/2011 11:06:37 PM , Rating: 2
I would like a kindle type device, yes e-ink, with touch, and a solid browser app so I can easily read any book or internet page minus video. Do this and sell it for $200 bucks or so and they will have a product. Just produce another tablet and it will just be one of many.


RE: Selling at a Loss
By Jeffk464 on 8/29/2011 11:09:58 PM , Rating: 2
Also keep the OS and hardware lightweight, basically keep it a reader with more of a tablet like interface.

P.S. the upcoming sony reader seems to be headed in this direction.


RE: Selling at a Loss
By ViRGE on 8/30/2011 8:24:08 AM , Rating: 2
quote:
Amazon can afford to sell their Android tablet at a loss, because of vertical integration they can make the money back through their own app store, book store, music store, etc. That will certainly position them to challenge the iPad.
I'm not so sure that's true, or at least not reasonably practical. Apple takes a 30% cut and according to their financial documents the iTunes Store is basically a break-even operation (which is where they want it to be). For Amazon to subsidize the tablet like that they'd have to take more than 30%, and there's no guarantee developers and media companies will agree to taking a smaller cut so that Amazon can tell more tablets. If that happens and if it is Android tablet that allows 3rd party markets, watch as as significant number of people never even touch Amazon's market.


"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch

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