Amazon reportedly preps tablet orders: Volume points to subsidized devices

Amazon reportedly preps tablet orders: Volume points to subsidized devices

Summary: Amazon is reportedly placing orders for as many as 1 million to 1.2 million tablets in the third quarter. How can Amazon be so sure that it will have a tablet hit? The e-commerce company will use price as a weapon.

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Amazon is reportedly placing orders for as many as 1 million to 1.2 million tablets in the third quarter. How can Amazon be so sure that it will have a tablet hit? The e-commerce company will use price as a weapon.

A DigiTimes report details how shipments of iPad and non-iPad tablets are expected to top 21 million to 22 million units in the third quarter. The usual suspects---RIM, Motorola, Acer, Lenovo, Samsung and HP---will be ordering tablets in the Asia supply chain. The interesting part is that Amazon is No. 2 in tablet orders behind Apple.

As noted repeatedly, Amazon's entry to the tablet market is a foregone conclusion. The company has already cobbled together many software components needed---streaming video, music, an app market for Android and e-commerce capabilities. The missing link in all of these iPad competitors, however, has been price.

Welcome to the subsidized tablet. Amazon can offer cheap Kindles because it can make up sales on e-book sales. The Kindle with Special Offers has ads and can go even lower on price. An Amazon tablet will use the same playbook. Forrester Research reckons Amazon may be the only company to give Apple a tablet run. Jason Perlow predicted the Amazon tablet move last year.

The big question is how low can Amazon go on a tablet? It's a safe bet that Amazon won't be playing the $499 and pray for demand game.

Topics: Tablets, Amazon, Hardware, Laptops, Mobility

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9 comments
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  • when Job$ catches a wiff of Amazon's android success

    it will sue them. I said it first!
    Linux Geek
    • RE: Amazon reportedly preps tablet orders: Volume points to subsidized devices

      @Linux Geek
      I think Microsoft and Oracle are already taking care of that...
      Hasam1991
      • But Apple would love to have in, I hear they're waiting their turn

        @Hasam1991
        William Pharaoh
  • RE: Amazon reportedly preps tablet orders: Volume points to subsidized devices

    @Larry<br>$499?<br>That's a given. ASUS already blew through that barrier and we are starting to see movement in that direction form other OEM's.<br><br>Question is how low can they go and what will be the price point affect on Kindle? Or does Kindle even matter in this arena?<br><br><img border="0" src="http://www.cnet.com/i/mb/emoticons/plain.gif" alt="plain">
    rhonin
    • RE: Amazon reportedly preps tablet orders: Volume points to subsidized devices

      @rhonin

      I wouldn't be surprised to see $399. I think Amazon have pretty strong brand loyalty from their customers so there is probably more latent interest in it amongst consumers than there was for the Galaxy tab or Xoom. If they can sell at that price and the user then buys ten e-books they've at least broken even on it I would think.
      OffsideInVancouver
      • RE: Amazon reportedly preps tablet orders: Volume points to subsidized devices

        @OffsideInVancouver

        Probably, they can even afford to take a loss for a while to build up market share like console makers do. Eventually, the costs will go down and the device will be profitable, and all the while they will be selling software, music and applications, and collecting royalties a la Apple, to help soften the blow.
        x I'm tc
      • @jdakula: Consoles have up to a 5 year product lifespan.

        Tablets are a much shooter lifespan and the option to loose $1.00/unit is harder to pull off.

        Amazon does have the properties to make a compelling Android tablet tied into Amazon services and not Google services.
        Bruizer
  • RE: Amazon reportedly preps tablet orders: Volume points to subsidized devices

    If Amazon can compete with the price of other iPad and non iPad tablets then they will surely hit the market. It will be easy to sell as <a href="http://www.houseground.com">houses for sale</a> and <a href="http://www.apartments.gs">apartments</a>. In another side, well if amazon can make up sales on e-books it is another plus for them and every <a href="http://www.inches.ca">inches</a> amazon are moving ahead at the iPad industry.
    billhansen55
  • RE: Amazon reportedly preps tablet orders: Volume points to subsidized devices

    I completely agree. Microsoft sees that their platform is no longer a business necessity and they're trying keep defection to a minimum through scare tactics.
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    rayyi