Amazon Tablet: The Biggest iPad Competitor

The first iPad competitor maybe the Eee Pad Transformer, Samsung Galaxy Tablet 10.1. But the real powerful iPad competitor is still in development.  IT Geeg thinks hardware has lost some its weight in consider a Tablet. The services and applications behind a Tablet plays a more and more  important role.

Amazon owns more than 200,000,000 users and a powerful integrated services. Once Amazon release its new Tablet product, it should be the biggest iPad Competitor. Maybe the success of Kindle and Kindle Store is a best example. It success experience will also suitable to Amazon Tablet. iPad should worry about its #1 position.

Amazon’s services ecosystem shows as bellow:

Kindle pattern should give Amazon confidence

In the E-Book market, we have seen most people pay much attention to Kindle Reader itself. But IT Geeg thinks the relationship between Kindle Store and Kindle is the real point.  Amazon is actually sells services other than an e-book reader.  Amazon will continue this strategy on its tablet.

The relationship between Kindle & Kindle Store is the same with iTunes & iOS. E-book downloaded from Kindle Store can be just read on a Kindle E-book or Kindle App. So, when a reader become a Kindle user, he or she will be loyal to Kindle Store.  This is the so called “Lock-in” strategy.

IT Geeg believes that if Amazon release Android Tablet PC, they will continue the “Lock-in” strategy to lock their consumers in its Amazon client services. Maybe Amazon will stress its tablet’s advantage on reading e-books in order to attract more Kindle E-book readers to purchase a Amazon Tablet. As long as users purchased Amazon Tablet, Amazon will supply them with MP3, VoD, Apps, Cloud Drive and Cloud Player services. This is the biggest advance that Amazon Android platform Tablet will have.

Low down hardware price but make profit from services.

There existing strategy of non-Apple tablet to compete with iPad is to low down their cost. At least $100 lower should be a reasonable price for consumers. But it seems difficult to release a tablet with a price lower than $349~$399. So the services becomes crucial in compete with iPad.

In order to remain its market position, Apple will release its iPad3 before 2012. If the iPad3 also sells at a price of $499 and iPad2 decreased to $399, the living space for other tablets will be smaller. At that time, Amazon should charge its Android Tablet $249~$299. So the Amazon will loss on its hardware. The only way to make profit is to strengthen its services.

Amazon owns e-commerce, e-book store, MP3 store, App store and Cloud services to compete with Apple. So Amazon have the power to take over some market share and make profit.