The Amazon Tablet Vs. iPad 2

No doubt it won't look like this.

We are fast approaching the holiday selling season, and if Amazon is going to launch an Android-based tablet they'll have to act soon if they want to maximize their initial sales. A number of rumors have been making the rounds about these tablets, so I thought I'd round them up and provide my own thoughts.

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...

Amazon's Tablet

I don't think Secret Squirrel is the official name, but the graphic was too cool to resist.

The nuggets of rumor are washing down from the hills of speculation in the upper Amazon... It looks like Amazon is indeed planning to introduce an Android-based tablet, to be built by Samsung. The idea is to have a tablet with Amazon goods and services built in, so that it's easy to grab your Amazon music, your Amazon Instant Video, and of course your ebooks. Amazon has already set up a cloud-based music service, and the new Amazon App store for Android apps... so it's pretty clear that they are getting ready for an Android tablet.

Of course, Amazon has been watching the success of the iPad with no little degree of envy. There's still plenty of room for Kindle at the bottom of the price range, of course, until Apple feels motivated to introduce a lower-priced iPad (which won't happen for quite a while, until Apple really feels threatened by lower-priced and more effective competition, which isn't anywhere near arriving yet). It makes sense for Amazon to have an answer to Apple at the high end. These two giants are competing quite strongly, selling music and video and books and apps... and Amazon has some distinct advantages in knowing how to really cross-sell items. When you look at something on Amazon, you get a wealth of information: Trustworthy user reviews, "users who looked at this also looked at" information, wish lists... there's a huge array of very helpful info towards making your purchase decision. Compare that to the iTunes store, which is starkly devoid of helpful info when you're looking for an App.

I expect Amazon will have this out in time for the holiday season, if not before. It will be interesting to see just how aggressive they get with price point ($249?) and specs... I'd expect a 7-inch tablet, but they may go for a 10-incher and take on the iPad directly.

Ah, 2011, you are just full of interesting battles...

Motorola's Xoom Falls Flat

I guess Xoom refers to the price.

Talk about disappointment... Motorola's Xoom tablet seemed like the first iPad competitor that would provide a worthy challenge to the market leader. The Xoom will have Android 3.0, the first version actually designed for tablets, plus some really powerful hardware: a dual-core processor, 1 GB of RAM, a front- and rear-facing camera, a good quality 10.1" screen and Nvidia graphics. The only thing left out of the CES announcement was the price, and now we see that in a Best Buy ad: $799.99.

Which might be reasonable, if the iPad didn't start at $499.

But, wait, it gets better. Apparently the Wi-Fi connectivity on the Xoom isn't enabled unless you buy at least 1 month of a data plan with Verizon. Now, this model is a 3G beast, so apparently Motorola and Verizon don't want you to shun the 3G feature until you've tried it out... for $25. Perhaps there will be a WiFi only version at some point, but it's yet to be seen.

Yes, the specs are beefier than the iPad. Of course, the iPad 2 seems likely to be introduced soon, and when that happens it'll probably be at the current iPad price points (while the old iPad gets even cheaper). Which will make the Xoom look really lame, at least pricewise. Which is something Apple loves to do.

Motorola, I know you've got bills to pay and all, but you could at least have introduced a WiFi only version of the Xoom at something approximating a low-end iPad price.All you've done with this is make the iPad look even more attractive; before its Android tablet competition was generally lower priced, and the iPad was more expensive.

Sigh. Well, sooner or later someone will introduce an Android tablet to compete with the iPad. I guess it's later. Not that I hate iPads, mind you, but when there's serious competition Apple will get more aggressive with pricing and features, and that benefits everyone.