Amazon's shot at tablet stardom

16 Mar 2011

The iPad 2 is out now in the US. But you knew that. Reviews are generally more positive than negative (great tablet, shame about the camera).

However, the real story on tablets is who is going to take the most market share from Apple now that it no longer has the tablet market to itself. Samsung, LG, HP, ZTE Motorola and RIM are among the contenders to throw their hats in the tablet ring this year.

But the company with the best chance to give Apple a run for its iPad money could be Amazon, according to Sarah Rotman Epps from Forrester.

In a blog post, Epps notes that most tablets this year are doomed to flop in part because they’re expensive, and because they require the kind of dedicated sales and marketing support that iPads get from Apple – and they can’t get that from cellcos and retail shops selling lots of different devices and form factors. (Epps also cites Forrester research indicating consumers list Apple’s in-store service as a major value-add.)

All of this, Epps reckons, amounts to a ripe opportunity for Amazon to create a tablet using Android or Linux that serves as an interface for its content and services (which will include its upcoming Android app store). Imagine the Kindle with tablet features, and you see the possibilities.

Indeed, one advantage for Amazon is a proven pricing model via the Kindle. It also has the brand, the content and the channel to pull off a tablet win, Epps says:

Amazon also has the motivation, she notes:

By implementing onerous rules for eBook sellers and other content providers that require in-app payments, Apple may have created its own worst enemy. Now Amazon has the motivation to launch its own device, where it will have more control over payments and customer data.

One unknown is whether Amazon could get by with its own sales channels selling tablet devices that require a mobile broadband connection without the help of operators to bundle connectivity services with devices. Google’s Nexus One phone famously flopped in no small part because Google tried to bypass cellcos by selling direct to consumers.

On the other hand, Google doesn’t have quite the consumer sales channel capabilities of Amazon. And in any case, the same may not apply to tablets. According to Epps, Forrester’s latest tablet report finds that 28% of consumers considering buying a tablet would prefer to buy it from an online retailer like Amazon, with only 11% preferring to purchase one from a carrier.

Either way, Amazon certainly has the content and the business model – and the ambition. If Amazon can partner with the right OEM and move fast, it could well be the surprise hit of the tablet sector.

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