Amazon's diametric tablet approach

Jamie Moss/Informa Telecoms and Media
29 Sep 2011

When it comes to the relationship between the devices and content they offer Amazon and Apple are two very different companies. Apple’s App Store was created to act as a differentiating feature that is available only to their end users, in order to compel consumers to purchase Apple devices rather than those of their rivals. While for Amazon it is the reverse, their devices exist to encourage the growth of the market for the sale of the digital content that is available on their online store.

Yet in this vital difference there is also a strong commonality of purpose – to reinforce both companies’ core business models. For Apple their content store exists to reinforce their core business model of selling hardware. Whilst for Amazon their device portfolio serves to reinforce their core business model of retailing content.

As a consequence Apple’s mobile ecosystem is characterised by general-purpose, premium-priced devices, for which (more often than not) users purchase free or low-price software from the App Store. While Amazon’s mobile ecosystem has thus-far been characterised by more application-specific, lower-priced devices, for which users purchase premium rate content.

It is important to point out that Amazon’s hardware is certainly not deficient in functionality or build quality in any way. It’s simply that the company’s business model is not based upon the margins they obtain from the sale of those devices alone. Amazon could charge more for them, but this might impede hardware sales and by association reduce the potential for their long-term goal – the sale of digital content for those devices.

Amazon expands its hardware offering

Yesterday Amazon formally announced the addition of four new products to its device portfolio: the Kindle (basic), the Kindle Touch, the Kindle Touch 3G and the Kindle Fire. They are all e-readers, with the exception of the Fire which is a tablet. The original Kindle e-readers have since been renamed the Kindle Keyboard and Kindle Keyboard 3G to avoid confusion. The lesser-spotted Kindle DX is still available too.

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