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The Amazon Tablet is to sell you more stuff, not to compete

By | April 21, 2011, 7:37am PDT

Summary: The prediction that Amazon is working on a tablet has set off a round of buzzing. Make no mistake: Amazon doesn’t want to sell you a tablet, they want the tablet to sell you lots of other stuff.

Peter Rojas of gdgt stirred up a flurry of commentary with his prediction that Amazon is working on a tablet with Samsung. He sees the Amazon media ecosystem (audio, video, ebooks) as a reasonable jumping off point for the retailer to hit the market with its own branded Android tablet. The tech world has jumped on Peter’s prediction with gusto, and many are questioning whether such a move would end up jeopardizing Amazon’s relationships with partners in the Android space. Frankly, I don’t think Amazon cares as this tablet is all about extending the company’s retail operation, and not about taking over the Android tablet market.

First up, I agree with Peter that a tablet from Amazon is inevitable. I’ve written about this before and colleague Jason Perlow has too. The company has been carefully building up a retail ecosystem on the Android platform, and the recent opening of the Amazon Appstore was the final piece of the pre-tablet puzzle. The system is so well fleshed out that Amazon would be remiss in not producing its own tablet.

A lot of the reaction to Peter’s article deals with the notion that Amazon would upset its OEM partners in the Android space if it released a competing tablet. That makes sense to a degree, but I don’t think that would be a factor. I don’t see Amazon’s tablet as a product going after the Android tablet market at all. I believe it would be intended to extend the company’s retail operation into the next logical space. I firmly believe that Amazon’s intent would not be to produce a state-of-the-art mobile device that will set other tablet makers back on its heels. Its tablet would rather be designed to have the Amazon retail system completely ingrained into a decent, economical tablet. Think of it as an extension of the Kindle ereader.

It will be a full Android tablet, don’t misunderstand me, but its primary purpose will be to sell you Amazon products, and then provide a nice mobile method to consume those products. A Kindle on steroids, if you will. It won’t be designed to just sell you digital products for the tablet, oh no. Amazon will integrate it into the entire retail operation, which will make it possible to sell the tablet for a ridiculously low price.

I envision constant promotions aimed at Amazon tablet owners. Free shipping for any product bought from the tablet or big discounts for similar purchases. Amazon is a master at playing the retail game, and this will fit perfectly into that. Amazon doesn’t want to sell you a tablet, they want the tablet to sell you lots of other stuff.

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James Kendrick has been using mobile devices since they weighed 30 pounds, and has been sharing his insights on mobile technology for almost that long.

Disclosure

James Kendrick

James Kendrick has no affiliations or relationships that need to be disclosed.

Biography

James Kendrick

James Kendrick has been using mobile devices since they weighed 30 pounds, and has been sharing his insights on mobile technology for almost that long. Prior to joining ZDNet, James was the Founding Editor of jkOnTheRun, a CNET Top 100 Tech Blog that was acquired by GigaOM in 2008 and is now part of that prestigious tech network. James' writing has appeared in many print publications: Smartphone and Pocket PC Magazine, Information Week and Laptop Magazine to name a few. James' coverage of the mobile technology sector has regularly appeared in the New York Times, Salon.com and CNN/ Fortune online. Not just a writer, James has filmed numerous video reviews and how-tos that have garnered well over a million viewers. He has appeared on local news segments and been interviewed by the Associated Press on mobile technology topics. Additionally, James has been podcasting about mobile technology for years.

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Agreed
tkeller@... 25th Apr 2011
@autotraveler The B&N Nook Color (NC) is the de-facto benchmark in that segment. My take is that Amazon will need to better that slightly.
Out of the box, the NC is pretty well locked down. It will be interesting to see what the rumored update to 2.2 will bring. I suspect it won't be much - as B&N needs to keep control of it's little ecosystem.
My speculation on an Amazon tablet centers around just how far they will go with the hardware and software. Hardware-wise, they will need to at least match the NC - and it would be wise to improve on it's shortcomings (better speaker, stereo, dedicated buttons for Android. Maybe even GPS, camera and microphone). Software-wise, how far will they go with the market? Amazon has created a good appstore, but will they try to limit app installs in any way in order to keep control? And the speculation about the device having built-in incentives to shop on Amazon is right on. Done right, it would be a great way to generate sales site-wide.
Finally, will the thing be moddable? Will Amazon try to "protect" its device from the modding community? The NC is a good ereader, and a fairly simple mod makes it a very good tablet.
I'm hoping Amazon does well when (if?) they make a tablet. This has some great potential.

Or, they could just push out a rebranded (and possibly downgraded/crippled) Galaxy Tab with an Amazon overlay.

We'll see. happy
From your characterization, I hear you saying that Amazon's tablet would not be much to speak off. I don't think that's been what Amazon has sought to stand for. They have intentionally built an eReading device that they are confident has the best reading experience you can get. People may argue whether it does, but they're using eInk for a reason, and they're staying with black and white (at least for now) on purpose, because they don't feel that color is economical or measures up yet. So, if they're going to build a tablet, I would not count on it being just 'decent.'
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Contributr
@WebSiteManager I didn't say that. I merely pointed out that a whiz-bang competitive tablet is not the primary objective. I too think Amazon will bring a decent product to market.
Apple! Google's Android fits nicely within their business model, but Android OS is not the cash machine that iPad, iPhone and iPod are - when you purchase through the typical Android device Google does not benefit. On the other hand, everything that passes through mobile iOS devices makes Apple money, placing them in the same category. Your statement above could as easily read "Apple doesn?t want to sell you a tablet, they want the tablet to sell you lots of other stuff."

Kudos to Amazon, I'm sure it will be a success, and good on them for taking a good look at Apple (as I'm sure they did) in developing a business model and justification for creating a branded tablet.
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Contributr
@jcunwired I don't see Amazon's intent to be the same as Apple's. Amazon can use the tablet to sell you every single thing they sell, not just tech stuff. Far bigger market than Apple's.
@JamesKendrick World domination? (joking, of course) True, the market is huge, but there is one major difference. Amazon doesn't *need* a table to sell you their stuff, its just another device - albeit with more convenient hooks to their marketplace - from which to click "Buy now...". Apple did.

The differentiator, of course, is that Amazon has no intention of developing a competing product, but purely a convenient one, and this is the beauty of their model. I agree completely with you on this, as well the sentiment that an Amazon tablet will be a good device.
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Brilliant on Amazon's part
Schoolboy Bob 21st Apr 2011
@JamesKendrick

I think it is brilliant on Amazon's part. But consumers don't all agree with me. I am not a Kindle owner (but I have purchased two as gifts). Several Kindle owners I have talked to said they didn't want any kind of ads (even unobtrusive ones), even if it saved them money.

My opinion, though, is that a highly subsidized marketing-reader-browser tool could really take off. Many, many millions of units.
@jcunwired
Think you are wrong....
If Amazon feels enough to promote Kindle ebook app to continuously improve on the Kindle eReader I find it likely they will have the same vision for Android.
And Android has the potential to be as or more lucrative then Kindle is.

grin
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A distinction without a difference?
Economister 21st Apr 2011
Every company tries to "sell you more stuff". Your dollars then go to their bottom line instead of someone else's. That "someone else" may be a direct competitor or selling burgers, but at the end of the day, you get stronger and they get weaker, IF you succeed at "selling me more stuff". There are only so many dollars to go around in any given economy. If that is not competition, I do not know what is.
Ditto for Android tablets, by the way!
Google gets virtually ALL their revenue from selling ads.
I hope they don't ruin it by putting that crappy Android OS in it.

Amazon should just stick to selling Adroid Apps and not rely on Adroid to increase future revenue since Android is just a fad that is already dying
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Troll much? (nt)
Economister 21st Apr 2011
@iPad-awan

NT
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It takes one to know one
iPad-awan 21st Apr 2011
@Economister
and apparently you're the best at spotting one
@Economister
He's sensitive about it too.
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Actually, you are wrong, as usual
Economister Updated - 21st Apr 2011
@iPad-awan

You see, bigots do not recognize other bigots. When one bigot runs into another bigot, he does not recognize the bigotry. Instead his fragile little ago is validated and he feels good about himself, totally oblivious to the bigotry.

Now, I expect that you would have a fair bit of trouble with this entire concept.
@iPad-awan you are crazy. Amazon will keep their readers they way they are. The great thing about an android powered tablet is that it offers so much more content to the users. Android is not a fad, and will not die anytime soon.
@iPad-awan

Walking past my Phones4u shop the windows were entirely android apart from one iphone display. On entrance you then hit an enormous Galaxy Tab demo.

Android is dying ?
@iPad-awan I guess you have been maybe hiding under a rock, when Android just moved UP to 33% of all phones, which surpasses the Iphone by a ways. So if you mean that the fad is dying, I am sure Google can live with that kind of dying.
Whatever amazon does I hope they keep a dedicted black and white ereader. My kindle is one of the best tech devices I have ever owned. It is like a toaster it just does what it is supposed to do, nothing more nothing less.
@jhuddle I agree with you. The Kindle does what it is supposed to and as advertised. I am always puzzled when I read the blogs as to why people whine about the fact it doesn't have this or doesn't do that. Maybe they will be happy with an Amazon Tablet.
@nbkz81f What many seem to miss is the simplicity of the kindle is it's best feature. When I go to read I don't want to be sucked into email, or a movie, or a game, etc. In want tune all of that crap out and loose myself in the book. Don't get me wrong Netflix, and angry birds on my iPad rock, just not when I want to read. Kindle on the iPad is nice, but I don't know if it is the screen, or the size of the iPad, but the reading experience is just not the same.
@jhuddle
I see no reason why they would not. Look at the recent add driven model.
I find it likely they will have both; Kindle eReader and Amazon Tablet.

wink
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Sounds good
mluebker@... Updated - 21st Apr 2011
I've been using an iPad for a while, and I love it. But it's my only Apple product and I'd probably love it more if it ran on the more familiar Windows OS. That said, and given how much stuff I already buy from Amazon (Prime member), a tablet that runs on the more Windowsish Android, lets me use Firefox and makes interacting with Amazon easier would be great. Offer it for a good price to encourage iPad users like me to switch and I'm pretty much there! (I might miss the App Store on iTunes though...)
@mluebker@... Funny you mention the more familiar Window OS. I am considerng a Mac because I am so disgusted by my Windows PC. I bought it in Nov and it is so sluggish and eveything seems to hang. Working next door to a Mac Store I can go play and have no issues using the Mac OS as opposed to Windows.
If Amazon builds a tablet anywhere near as good as the Kindle, they'll have an excellent chance of selling a lot of units. Tablets are the killer hardware - mobile, convenient and are quickly becoming laptop, if not desktop replacements. My Xoom has relegated my 18 month old laptop to a dusty corner - literally have not used it since the day I bought my Xoom. And I wonder how long my desktop will be needed?
One thing that Amazon and Barnes and Noble both realize is that their touch-screen e-readers can also be touch screen units to run Android apps. Already, there is a kind of fanboy/fangirl purist who says "but it won't be as cool as a real tablet" or "Amazon will never keep up with all those new builds with clever names". Yet that's all beside the point. If a reliable 150 dollar e-reader appears which also allows good access to many Droid apps, it will have a use, a place, and it sell more media for Amazon. It won't be as good an an iPad or a Xoom, but that's hardly the point. It will be useful, inexpensive and from a name brand.
@gurdonark
While this may sound good it misses the point of the Kindle success - do one thing and do it really well.

Nook is positioned to do this. I think it would be a mistake for Amazon - especially with the broad range of apps the have in the Android store already...
I've already decided for what I'd want a tablet for, the maximum price I'll pay for one is $250-300, and it has to be an Android OS (I'm already invested in Android app-wise via my EVO). Anything that costs more, I'd personally be better off buying an ultra-portable laptop.

I'd been considering just buying a Nook Color and hacking it to run Cyanogen, and the Viewsonic 10" that just came out is the first actual Android tablet I've seen that really entices me, although it's the top end of what I'm willing to spend, but I'll say flat out, if Amazon came out with an Android Honeycomb tablet, I'd buy one in a heartbeat, if the specs and quality were what I'm looking for.

They'd better announce it soon though, or I'll probably snag a Viewsonic 10", haha.
I found it surprising that only one person in the thread mentioned Barnes & Noble. This can be seen as a move to counter B&N's expected upgrade to Android functionality of its existing Nook Color, which will be positioned quite nicely at the $249 price point, half the price of a basic iPad.

But I have been saying that the real sweet spot at retail will be a brand name tablet at $199, that comes close to matching the functionality and feature set of the first-gen iPad. The compromise, unless the price of the screen component erodes further, is that it will be a 7-inch screen, not the iPad's 10-inch LCD. Don't be surprised if Amazon come in with a breakthrough price like $199 because for them its giving away the razor (tablet) to sell the blades (other products, and especially music and eBooks).

Who agrees with me that is the way it might play out?

Richard Truesdell
Editorial Director, Automotive Traveler Magazine, www.AutomotiveTraveler.com
@autotraveler If that's the way it plays out, I'll definitely be buying one! wink
@autotraveler

I wrote earlier... Nook is positioned to do this. I think it would be a mistake for Amazon - especially with the broad range of apps the have in the Android store already...

Big mistake - totally different consumer segments.
Amazon is all consumer products, B&N is a focused segment.
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Agreed
tkeller@... 25th Apr 2011
@autotraveler The B&N Nook Color (NC) is the de-facto benchmark in that segment. My take is that Amazon will need to better that slightly.
Out of the box, the NC is pretty well locked down. It will be interesting to see what the rumored update to 2.2 will bring. I suspect it won't be much - as B&N needs to keep control of it's little ecosystem.
My speculation on an Amazon tablet centers around just how far they will go with the hardware and software. Hardware-wise, they will need to at least match the NC - and it would be wise to improve on it's shortcomings (better speaker, stereo, dedicated buttons for Android. Maybe even GPS, camera and microphone). Software-wise, how far will they go with the market? Amazon has created a good appstore, but will they try to limit app installs in any way in order to keep control? And the speculation about the device having built-in incentives to shop on Amazon is right on. Done right, it would be a great way to generate sales site-wide.
Finally, will the thing be moddable? Will Amazon try to "protect" its device from the modding community? The NC is a good ereader, and a fairly simple mod makes it a very good tablet.
I'm hoping Amazon does well when (if?) they make a tablet. This has some great potential.

Or, they could just push out a rebranded (and possibly downgraded/crippled) Galaxy Tab with an Amazon overlay.

We'll see. happy
This is a similar model to what HP has. They don't sell printers, they sell ink. (Quotes from their own people at trade shows.)
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xiaojiektii Updated - 22nd Apr 2011
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beibei41 Updated - 22nd Apr 2011
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beibei41 Updated - 22nd Apr 2011
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@iPad-awan
jnheroy@... 22nd Apr 2011
Your just lonely and want someone to know where you are all the time. Don't worry, Steve knows where you are.

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