Analyst Says That Amazon’s Tablet Will be the iPad’s Biggest Threat Yet

[Kaykaykay]

Given my experience with Amazon, I'd be willing to shell out for an Amazon Android tablet. I can't say the same of any other Android hardware maker at this point. Amazon seems to get that it's not just about hardware, and I figure that if I have a problem, Amazon will take care of me.

You and my wife...And millions of other happy Kindle owners and Amazon customers.

Amazon won me over with a great Kindle experience (including hardware, content, support in cases of problems with purchases, and good service). Before Kindle, I rarely bought anything from Amazon. It's since made plenty of money off me, beyond Kindle and content sales.

 

[thewitt]

I must be the only person on the planet who hates my kindle. I gave it to my daughter after two hardware exchanges due to catastrophic failure, and ultimately too short a battery life to read all the way to Malaysia from the US East coast.

Amazon customer service though polite was not ever helpful.

My daughter has now shelved it for an iPad as well.

-t

 

[jsh1120]

Amazon won me over with a great Kindle experience (including hardware, content, support in cases of problems with purchases, and good service). Before Kindle, I rarely bought anything from Amazon. It's since made plenty of money off me, beyond Kindle and content sales.

You make another interesting point there. Amazon has a much broader play here, broader in some ways than even Apple. The Amazon "brand" reaches across literally hundreds of product categories. To the extent that they can drive traffic to the Amazon website they can profit from purchases in those areas, as well.

It may be odd to think of it but Kindle sales drive purchases of lawn equipment, audio equipment, etc. etc. etc. All of that factors into the subsidy Amazon can afford for a product like the Amazon Tablet.

 

[Kaykaykay]

Amazon won me over with a great Kindle experience (including hardware, content, support in cases of problems with purchases, and good service). Before Kindle, I rarely bought anything from Amazon. It's since made plenty of money off me, beyond Kindle and content sales.

You make another interesting point there. Amazon has a much broader play here, broader in some ways than even Apple. The Amazon "brand" reaches across literally hundreds of product categories. To the extent that they can drive traffic to the Amazon website they can profit from purchases in those areas, as well.

It may be odd to think of it but Kindle sales drive purchases of lawn equipment, audio equipment, etc. etc. etc. All of that factors into the subsidy Amazon can afford for a product like the Amazon Tablet.

Amazon has even made money off my owning iPads, because I buy accessories on Amazon, for instance.

No one has Amazon's reach when it comes to competing with Apple. It has the resources, smarts and commitment to build a product category from nothing. Amazon also has a much more varied demographic when it comes to buyers.

I wouldn't mind helping if it chooses to bet on a tablet, even if it fails. I think Amazon will make a good show, though.

 

[thewitt]

To the extent that they can drive traffic to the Amazon website they can profit from purchases in those areas, as well.

This will not keep a product in production that loses money on every sale. It doesn't work that way in the real world.

If they cannot DIRECTLY trace revenue and profit to a tablet, they will drop the product.

"Gray" sales will never keep alive.

-t

 

[jsh1120]

To the extent that they can drive traffic to the Amazon website they can profit from purchases in those areas, as well.

This will not keep a product in production that loses money on every sale. It doesn't work that way in the real world.

If they cannot DIRECTLY trace revenue and profit to a tablet, they will drop the product.

"Gray" sales will never keep alive.

-t

And that's why the Kindle didn't survive. Now I understand.

 

[thewitt]

And that's why the Kindle didn't survive. Now I understand.

No need to be snide.

Kindle book sales are DIRECT sales as a result of the hardware, not gray-area sales. The hardware is in fact useless without book sales.

You indicated that the tablet would be a success by simply driving other Amazon product sales unrelated to the tablet. These sales would NOT be traceable back to the tablet and could not be considered success of the tablet.

Without hard sales data traceable back to the tablet no company would simply lose money every quarter on the hardware...and accept that loss while assuming sales of other items in their store are up because of that hardware.

Retail just doesn't work that way.

Amazon may be making a strategic decision to lose money on every tablet sold, but they had better have a profit strategy in their plan or we will soon be saying, "Remember Amazon.com" ...

-t

 

[Mountainbikermark]

I'm surprised no one has brought up the education aspect. You read stories of how schools are considering tablets,a school district in Texas has already shelved text books for Kindles and districts from all over the US are watching the experiment, asking questions and working on budgets to go that route in the future . If given the choice of an Ipad for text books vs a less expensive alternative that will do the same thing?
I've yet to see where the Amazon tablet at a lesser cost will ACTUALLY LOSE money with each hardware sale . Sure they won't make the exorbitant profit each Ipad does.

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[thewitt]

The first page quote has the analyst stating that Amazon can sell at a loss to be competitive.

-t

 

[Mountainbikermark]

Can is the key word. Will is not mentioned. The Kindle didn't sell at a loss initially. When the device didn't sell as expected AND got competition the price drop to a loss occurred.

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[Mountainbikermark]

"loss leader" is not an uncommon thing in business.
The folks at Amazon didn't just wake up last week and say "hmm I want to get into the tablet market"

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[jsh1120]

And that's why the Kindle didn't survive. Now I understand.

No need to be snide.

Kindle book sales are DIRECT sales as a result of the hardware, not gray-area sales. The hardware is in fact useless without book sales.

You indicated that the tablet would be a success by simply driving other Amazon product sales unrelated to the tablet. These sales would NOT be traceable back to the tablet and could not be considered success of the tablet.

Without hard sales data traceable back to the tablet no company would simply lose money every quarter on the hardware...and accept that loss while assuming sales of other items in their store are up because of that hardware.

Retail just doesn't work that way.

Amazon may be making a strategic decision to lose money on every tablet sold, but they had better have a profit strategy in their plan or we will soon be saying, "Remember Amazon.com" ...

-t

No, in fact I didn't say "that the tablet would be a success by simply driving other Amazon product sales unrelated to the tablet." I just pointed out in response to another post that this is an additional benefit. Amazon, like Apple, derives significant long term benefits by attracting customers to their brand.

My main point was in an earlier post. Amazon can make a success of a low priced tablet by keeping its price significantly below that of an iPad and leveraging their huge customer base of Kindle owners and potential purchasers. Much as Apple leveraged the huge base of iPod Touch owners and potential purchasers to a higher priced device.

 

[SweetPoison]

Okay, boys ~ This is a great discussion and I, for one, am learning a lot from you both.

Let's not get personal and just discuss, respectfully, please.

 

[Kaykaykay]

I expect Amazon tablets would sell for the same reasons Kindles sell -- their firmware would make buying content from Amazon super easy, with great customer support and the ability to take your content to other devices if you choose. That's why I buy Kindle books nearly exclusively, even though there are plenty of other options. If I choose to switch hardware, I won't have to abandon my content, as I would with iBooks, for instance.

Amazon also has lots to leverage with a host of services and products. It has a credit card, bonus points, Amazon Prime and other buying programs that it could use to help make its hardware and content even more attractive, for instance. The key difference between a company like Apple and Amazon IMO, is its leadership. The companies both have visionary leaders in Jobs and Bezos, but Bezos's leadership seems much more open and embracing of what customers want. Bezos showed with Kindle, for instance, that Amazon will admit mistakes and change services to better serve customers. I have great respect for what Jobs has done, and Apple certainly has lots of satisfied customers, but Apple customers have to do things as Apple decrees.

What I'd expect from an Amazon tablet is essentially a more usable Android tablet than any other competitor could produce, with the whole package -- hardware, firmware, content and support. I don't think Amazon would bothering producing a tablet unless it could deliver a great customer experience.

 

[ps249]

The amazon tablet could be a failure of epic proportions. In less than a year, B&N released 2 versions of the nook (color and touch eink) while Amazon did or said nothing. Also take a look at the HP touchpad- also an epic failure. Unless Amazon released 2 versions of the Kindle- I do not see amazon as a threat to anyone. By releasing a color touch will alienate their millions of eink fans. To release 2 kindles at the same time would be a disaster in the making...Amazon is screwed either way in my opinion.