|No doubt it won't look like this.|
Why is Amazon's entry into the Android tablet market important? Primarily because nobody has succeeded in creating an Android tablet that comes anywhere near the iPad in terms of sales. The closest is perhaps Samsung's Galaxy Tab, but even that is a distant second. Apple's managed to combine a smooth interface with a solid combination of hardware that other manufacturers are hard-pressed to match at Apple's price points. So there's an opportunity here for Amazon to use its advantages to secure a leading position in the Android market, and provide a credible threat to Apple's dominance. More competition is good for consumers, and tablets are an important market for games and books and other media.
The rumor mill is buzzing that Amazon is aiming at the low end of the market, planning to undercut Apple's prices. I think this is where the opportunity is best for Amazon; analysts think they could sell 3-5 million tablets in Q4 alone.. The trick is to give people the features they desire at a price they can afford. How can Amazon achieve this?
Here's my advice: Minimize the feature set to keep the costs low. Amazon is said to be using only a two-finger-capable multi-touch screen, instead of the ten fingers an iPad or a standard Android tablet can handle. Remove the cameras; this tablet will be for consuming content you buy from Amazon, not taking pictures. No need for a really fast processor, either, or for lots of flash memory. Give it a memory card slot and let users pay for extra storage. The target price should be $299 or less. Perhaps sell a 10 inch tablet for $299 and a 7 inch tablet for $199. Make the interface smooth and responsive, and provide a good selection of apps. The screen needs to be good... maybe one of those hybrid E-Ink and LCD screens, giving you the best of both worlds?
Amazon's goal should be in selling lots of content. They have a clunky interface, but a terrific recommendation engine. They've certainly encountered some problems with their version of the Android market, but here's a chance for them to fix the problems.
The key feature is going to be Amazon's vast array of media and their ability to suggest things to buy. If the price is low enough, millions will take advantage of it. Amazon has its doubters, though. Others see how Amazon could be a huge winner. It all depends on the execution. Amazon will really need to get these tablets out in October or earlier, and have some big TV advertising buys planned. The hardware, if it really is by Samsung, should be high-quality. Amazon has shown they can produce a good piece of hardware with the Kindle. (An interesting question here is whether Amazon stays with the Kindle brand, or creates an entirely new name... I'd bet on a variation of Kindle. Why not build off of the success of the Kindle?)
This tablet (or tablets) could represent an important expansion of the tablet market next year. Amazon could capture the #2 spot behind Apple, and put pressure on other Android tablet makers to step up their quality and pricing. Of course, Apple already has a plan to deal with whatever tablet threat might emerge. I'm sure they plan to introduce the iPad 3 next year, with a Retina display (4x the current resolution), better cameras, and a significantly more powerful processor. At the same time, they'll reduce the price of the iPad 2 to counter any threat there might be at the lower end of the market. Oh, it's going to be an interesting marketing battle next year...