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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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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.


"Folks that want porn can buy an Android phone." -- Steve Jobs

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