Amazon's first tablet could appear next month
Rumours have been circulating for almost two years, but we are finally approaching the time when Amazon will actually launch the first of its two tablets. And by pure luck, the timing could hardly be better. HP's attempt to enter the tablet market with the TouchPad may have turned into a debacle, but the frenzy to buy distressed stocks at knock-down prices shows that the tablet market is not exclusively an Apple iPad market. On the other side, Amazon's two launches will give it the chance to make an impact before Microsoft's army of PC manufactures starts to attack the market with far more functional tablets running Windows 8.
According to a note in Taiwan's DigiTimes, sources at component suppliers say that Amazon's 7-inch tablet, which is being manufactured by Quanta Computer, is expected to start shipping in October. Mass production of the 10.1-inch version "will be conducted in the first quarter of 2012 with Foxconn Electronics (Hon Hai Precision Industry) to handle the orders".
Foxconn is already manufacturing millions of Kindle e-book readers for Amazon, as well as Apple iPads and iPhones, Nokia phones and millions of laptop computers. It has large factories in China and Mexico, and may open a plant in Brazil, where cheap labour is also available.
Everybody expects that both tablets will run the Google Android operating system, and probably the Honeycomb version designed for tablets rather than mobile phones. However, it remains to be seen whether Amazon's software will be customised to support its shopping, movie and music services.
Tablet users tend to be couch potatoes, who sit in front of the goggle box tweeting about talent shows. If Amazon can deliver a tablet that enables them to buy stuff from their couches, it could lead to a significant increase in sales. As with the Kindle, the profitability of the hardware could become more or less irrelevant.
Another potential benefit is that Amazon could capitalise on widespread disaffection with Apple's 30 percent tax on purchases made not just through iTunes but via companies' own web sites. This week, the Financial Times withdrew its app from Apple's store and launched its own web-based application. Many other companies are considering similar actions, and Amazon could offer them an alternative route to market. (Facebook is also developing an alternative to Apple under the codename Project Spartan.)
Finally, as I pointed out in July (see Amazon's first million tablets … or e-readers?), Amazon also needs to respond to the success of Barnes & Noble's Android-based Color Nook. According to a headline in E-Commerce Times, Nook May Be Barnes & Noble's Salvation. In its latest financial results, the loss-making bookstore's "online revenue was up a whopping 37 percent to $198 million". The story adds: "It also forecasts sales of the Nook and ebooks will more than double this fiscal year to $1.8 billion."
Unlike Barnes & Noble, Amazon's whole business is based on online purchasing, and it has made a huge bet on ebooks. It cannot afford to be upstaged by Nook -- which is what's happening now -- and needs to have at least one tablet out before Christmas. In fact, Barnes & Noble may well have Nook 2 out well before then.
The main drawback could be the shadow hanging over the Linux-based Android following lawsuits by Apple, Microsoft and Oracle. If Amazon saw this coming, it should have developed its own Android front end aimed at encouraging Amazon purchases, which it could easily move to a different operating system.