Regarding an Amazon tablet (or, bringing content to an experience fight)

Regarding an Amazon tablet (or, bringing content to an experience fight)

There's been talk of an Amazon super-Kindle running Android OS since... about 5 minutes after Steve Jobs left the stage following the original iPad introduction. Now that Amazon has launched their Appstore (TM in contention), that talk is heating up again. And why not? It's an obvious play. I'd be surprised if Amazon hasn't had one in the labs for a while now (just like I would have been surprised if Facebook hadn't been working on a phone...)

Amazon has content like iTunes, including (in the US at least -- and more on that in a moment), ebooks, movies, TV shows, music, and now apps. They've made hardware before with the Kindle line.

But they're hardly the only one.

Sony makes phones, owns a movie studio and record label, and almost everything else in place to launch a similarly competitive offering but they've been struggling of late and don't seem to be that Walkman strutting, Trinitron innovating Sony of old. Samsung, however, is coming on strongly with their Galaxy S range of devices in assorted sizes and their Hub media services.

What Amazon has is a single login, credit card holding advantage. Both Google and Facebook could probably match Amazon on logins but they're internet based advertising companies (what they sell is users' attention). Amazon is an internet based commerce company (what they sell are goods). That's an important difference. Most importantly, Amazon has the only checkout system in the world to rival iTunes, in terms of both one-click ease of use (Amazon actually patented one-click) and sheer number of credit cards on file.

Even so, they will be "just another Android tablet". It's no coincidence all these competitors -- real and rumored -- are being built on Android. Google has done to mobile what Microsoft did to PCs -- make an OS that's so great OEMs and VARs can't justify the effort, investment, and resources necessary to make their own mobile OS anymore. (That's a good sign for the maturity of the space, though a loss for those of us still hoping to see more innovation like a true Facebook or Mozilla mobile OS.) That means that market, skin, and branding aside, Amazon (and others) will benefit from huge economies of ecosystem but will also have to face competition within their own platform and struggle for differentiation and attention in the market. (They'll also be facing internal tension since they're providing Kindle and other apps for their competition -- Apple doesn't make iBooks or GarageBand for Android.)

Let's say for the sake of argument Amazon's brand is big and strong enough to really stand out from the pack --it still only gives Amazon some pieces of the puzzle.

Apple is offering an almost 360-degrees of integration. Everyone else has some part of that same story but no one else has all of it yet. RIM and HP/Palm have integrated hardware/software but lack the global checkout system of Apple or Amazon. Google has great services but their checkout is lackluster, their content still in process, and they're almost always at the mercy of their hardware and carrier partners. Microsoft also has a desktop OS and previous consumer electronics like Xbox that could help with a halo effect, but none of them provided the existing accessory base and upgrade path iPod did, and Microsoft's entire mobile strategy has been slow to the point of abdication. And almost no one else has anything like Apple's retail stores.

So while upcoming mobile competitors will be bringing specs to an experience fight, Amazon and their hugely successful ecomm business will at least be bringing content as well. But it's still an experience fight.

At the end of the day -- or more appropriately at the moment of consumer decision making -- you can't match Apple on content any more than you can match them on specs. You have to match them on the feeling of the person in the Apple Store, hands-on with the device, absent any distracting logos on the bezel, easily obtaining and joyously not only using apps, but having the device become the app.

It's a visceral response from mainstream consumers, an ability to engage with technology in a new, more understandable and incredibly intimate way that's selling iPads, and that's what needs to be competed against.

Have something to say about this story? Leave a comment! Need help with something else? Ask in our forums!

Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Regarding an Amazon tablet (or, bringing content to an experience fight)


The problem with your thinking is that you are thinking that companies have to match or mimic Apple in every aspect to be successful in a specific market. Amazon and many more of the companies jumping into the tablet market can be successful while never matching Apple in total sales individually. Despite what Georgia may think, manufactures aren't producing multiple Android handsets every year in order to find one that sticks, they are doing so because the products are selling from low end to high end, and producing profits. The same can and will happen in the tablet marketplace as tablets supplant PCs/notebooks. Amazon is certainly in a position to become a major player in the tablet marketplace with the ability to offer books, video, apps and music. I don't think there is much doubt that they are about to jump into that market, it only makes since. I don't understand this "there can be only one" attitude from Apple users. Why the fear over competition?

Having a "quality" product is not the number one arbiter of the sales of a product. "Experience" is just a Apple's brand marketing for what we normally call "quality". It is just one of the many traits of a product for it to be successful.
The number one arbiter for the success of a product is price. If Amazon does the work necessary to come out with a quality tablet product, like a better Nook that provides 90% of what an iPad does, and sells it from $199 to $399. It's going to sell and put a dent into the iPad's sales trajectory.
You can probably say that Apple's effort into putting out a quality product, a product with a great user experience, is the number one reason for their fat profit margins. But that isn't necessarily an indicator of dominance.
They will have to offer iPads at $199 to $399 price points, and probably add different screen sizes. The market is big with lots of different needs. The hugeness of the market basically means that no one company can attain more than 20% to 30% marketshare. 50% marketshare by one manufacturer in 2015 would be utter dominance imo.
Operating system wise, I just hope it is a balkanization of 3, 4, or 5 systems. Having a duolopoly, even a 50-50 balanced one, is going to be boring.

A lot of manufacturers tried to compete with Apple on music player pricing. Apple didn't try to compete with Dell on laptop pricing.
Not all markets have pricing as the prime consideration. Almost all have value, however, which is different than price.

Emerging markets, new markets, aren't driven by price yes. And the tablet market or post-pc market is such a market. But eventually it will mature and be commoditized with competing products relatively close to each other in their capabilities. When that happens, price is basically the number one driver. That's what is going to happen in 3 to 4 years.
If Apple continues to maintain a DAP-like market dominance in the tablet market, then I've made a mistake in thinking how big the market is. The DAP market is relatively small at 60-70 million units a year, and shrinking. I can see one company dominating a market of that size. But I'm thinking the post-PC market is going to be 600-700 million units a year in the next 5 years or so.
That's just too big for a company, especially a company like Apple, to be dominant. A market of such size demands a lot variety in the offerings. Something Apple isn't normally want to do.
If Apple wants to maintain its high unit share, I think they have to start offering iPads at $199 to $199 price points. They have to start offering 4.5", 7", and 14" devices.

Interestingly, I was only discussing this very matter with a colleague today. We were thinking along the same lines as Shrike.
Thing is, if I were Amazon and had been mulling over a tablet release, then Apple's '30% tax' policy would almost certainly prompt me to push the button. Kindle, not just the app but the physical device, is generating quite a lot of brand loyalty of its own. If Amazon could roll out a Honeycomb-based 'Kindle on Steroids' at a pricepoint lower than the iPad, I think it would fit a very healthy niche, providing the Kindle experience in full colour with an instant-on web/flash/email/PIM value-add.
Then there's integration with the Amazon MP3 store (there's already an Android app for that!). And whilst this 'Super Kindle' certainly couldn't compete with an iPad in terms of app ecosystem, the Amazon App store/Android app ecosystem as a sweetener on top of your basic kindle/mp3/browsing/flash/mail appliance certainly wouldn't hurt the proposition.
For the final insult, Amazon could legitimately pull out of the iPad app market, placing the blame squarely at Apple's feet by citing the 30% tax as a showstopper. They could even suggest other app developers follow suit. When a Kindle afficionado is offered the choice of their Kindle library on a reasonably capable, cheaper tablet with added 'online', or a more expensive Apple 'experience' without the Kindle back-catalogue, as an iPad-owning Kindle afficionado I know which way I'd jump.
Pricing doesn't have to be the prime consideration when you have the content and the brand already established. And perception of value depends very much on what the individual consumer considers valuable.
I could even suggest how a Kindle tablet should(n't) be marketed...
'If you don't have the Kindle Tablet... you don't have your Kindle books there at a touch of your fingertips... and you don't have integrated access to Amazon's fully cross-compatible MP3 store. You don't have access to the whole web, including flash enabled sites. And you don't have access to the Android apps in the Amazon App store.'
'If you don't have the Kindle Tablet... well, you don't have the Kindle Tablet.'

You don't understand Amazon the retailer. As a retailer, they are as ruthless as they come. Developers won't view Amazon as any better than Apple. They'll probably look at them as worse.
Amazon's revenue sharing terms for the Appstore is 70% of the sale price or 20% of the developer developer suggested price. Just think about that for second. Yes, Amazon determines how much the app will sell for. And their subscription charges for Kindle Periodicals are just as bad if not worse than Apple's. And the discounts they extract from book publishers are likely the deepest of any retailer.
They are not nice.
However, it's a testament to how over-rated "3rd party developer-support" is. People don't think of Amazon as this ruthless retailer extracting exorbitant fees out of content providers. They think of Amazon as a place to easily buy stuff, and typically at very cheap prices.

Not sure how it follows that this shows third party support is overrated. People buy tabets -- well, any device -- to do stuff, period. Most people do not care if the stuff they do is provided by a first party or a third party. They care if they can do the stuff, period. Apple and Nintendo are probably the two best examples of how successful a platform can be primarily on the strengths of first party efforts.
However, on a general purpose, multifunction device, no company, not even Apple or Nintendo, can provide all things to all people, and that is where third party support matters, in supplying the demands people have that the first party is unable or unwilling to provide. If consumers have little to no demands the first party cannot meet, you are right, third party developers matter very little. However, that is not the case with tablets, at least in my experience.
I like my iPad, but I get the most use out of Flipboard, Safari, Netflix, and, of course, Words with Friends. Three of those four are third party. While I don't think Apple can or should spend time making those apps themselves, if hypothetically those apps did not exist on the iPad but did on an Android tablet, I would jump ship in a heartbeat. I doubt I am alone in relying on/being influenced by third party apps.

I'm not for moment suggesting that Amazon are nicer than Apple, business is business, and companies do what they do to make money. What I was suggesting is that the premise that Amazon would be unable to produce a tablet that could compete with the iPad in terms of an attractive value proposition doesn't necessarily hold water. heroes or villains be damned, if the platform is viable then people with an investment in a body of content are likely to go with it rather than a platform without it. As an investment in iTunes content drives loyalty to Apple, so a. investment in Kindle drives loyalty to Amazon.

Over-rated. Not unimportant.
There's a class of thought that a company has to nurture developers. Make them happy. webOS uses web technologies for its development environment in hopes that can take advantage of the huge pool of web developers. Android uses Java in hopes they can use the huge pool of Java developers. Tools have to be free. There must be a minimum amount of friction for development.
I see this kind of thought as rather secondary drivers. The only thing important is the ability of the ecosystem to make money for the developer. That'll take a good population of users with good buying or usage habits.
Both Apple and Amazon nurture a large population of users with good buying and usage habits. They arguably treat the developers of their platforms like trash. You can say the same about Microsoft and Google. This isn't really true (treating developers like trash), as they reward developers with the only thing that really matters, revenue.
This leads me down the rabbit hole about how important developer support really is. It's a force-multiplier for a strong product certainly, but there must be a strong product in the first place. And by strong product, I mean the whole "experience" thing.
You can argue that Palm made a strategic mistake with the Pre. They should have never have took on producing a SDK and application market that first year. They really needed those resources to optimize webOS and the Pre hardware. (Never mind that the question of using a portrait slider design or the Centro-like Pixi as the smartphone form factor.) webOS on the Pre was slow. The Pre hardware was buggy. The price structure was initially too much. The SDK and 3rd party developer support was something they should have left off the table so that they could concentrate on the bugs of product in of itself.

Obviously, I am of the school of thought that thinks developer support must be nurtured for long-term platform health. I like your term, force multiplier, as it suggests both that first and third party effects are interdependent, and that the strength of third party contributions is more than just In the long run, that force multiplier drowned most all other factors in the Mac/PC wars, but that does not mean it will repeat itself here, since tablets and phones are different beasts altogether. Either way, I think we can agree on two things:
1) Great developer support can help a product immensely, and poor developer support can hurt it as badly. The bigger the ecosystem, the large the potential positive effect.
2a) If a product is sufficiently close to the edge of acceptance, developer support can be make or break. (SegaCD, CD-I, perhaps Newton)
2b) If a product and its first party additions fits one or more high-demand needs perfectly, poor third party support will not cause measurable damage. (Kindle is a great example)
2c) If a product is trash, all the third party support in the world will not save it. (Pippin)

"absent any distracting logos on the bezel"
Seriously? I have an Evo, which has the htc and Sprint logos on the top, and I have never been distracted. Please let this one go. It matters not but is always a bullet point in such comparison posts.
From the first tweet about Amazon having the "whole experience" it sounds all legit until you consider the entire Amazon product line is available on Android. :-/ What does it matter if Amazon owns the phone too?
The experience will be the exact same: open an app, sign in, get content. The only difference could be a single sign-on. That's about the only place iOS differs here: you set your Apple ID, open an app, get content.
Good to consider but I doubt there is any real meat here [meaning anything that would make us go "wow" at an Amazon phone].

Apple doesn't have a big silver Apple logo on the bezel of the iPad for a reason. Thinking it doesn't matter is a common mistake.

'Thinking it doesn’t matter is a common mistake.'
Ah, now, that's very much a matter of whether you're easily distracted. By way of backing up John's comment, I literally just had to get my Desire out of my pocket to see if it has HTC branding on the bezel. It does, but I've had the phone for the best part of the year, and like I said, I just had to take it out of my pocket to check.
If not being easily distracted by shiny logos is a common mistake, I'll happily keep making it!

Please point us to evidence of this so called angst over having a logo on the front of a product and how it hurts a product. I have yet to talk to anyone who critiqued a logo on the bezel, and most certainly anyone who made a purchasing decision over it.

Good discussion. I have to disagree. Branding is important but it makes no difference if the logo is on the front of the tablet or a giant logo on the back. I, for one, like to show off my toys when I can. My iPad has an OtterBox defender case that proudly displays the Apple logo on the back. My phone also proudly displays the HTC logo on the front and back. Both devices do what I need them to and they do it well. I like to show that off when i can. I love HTC phones and the branding isn't any more distracting than the home button on my iPad.

They sure have a big black one on the iMac, was that a common mistake too? They also have "MacBook" and "MacBook Pro" written just below the screen of the aforementioned devices. Very distracting?
Seriously Rene, I think you are reading too much on the absence of the logo. May be there was just no room for it, since Apple likes to display its branding in the center of the bezels.

First: the logo position would bias users towards either landscape or portrait orientation of iPad when in use. Apple designed iPad's screen to be orientation-neutral. This makes it a more flexible tool than other pads.
Second: iDevices and iOS are designed to get out of the way. To put as little as possible between the user and his/her apps+data. Stickers, logos, buttons, etc. all get in the way. They detract from the experience.
Third: iPad isn't the first pad computer. But it's by far the best. There really isn't any competition, and everyone knows iPad is an Apple product. The logo isn't necessary.

Amazon has never been shy about entering a new market if tthought they could make money. If they were to develop an Android Tablet with Stock Android and tied into their eco system it could be a very tempting purchase. Sony's problem is in getting other content owners to make that content available to their competition. Samsung will soon be releasing a direct competitor to the iPod touch so we'll see how it works out.

I think that Android tablets can do well at the low end, and will fail miserably when they try to take on the iPad directly (Motorola Xoom). I will put some biases up front. I have the first gen iPad, am skipping this year's model, and will surely buy an iPad 3. I have dabbled in Linux for 15 years (I am a geek, I enjoy that stuff) and have hated my only previous Android device (a 5" Archos - resistive touch screen, lousy battery life, and you had to pay extra for codecs to play common formats). Even so, I will probably buy an Android tablet, which will, besides letting me learn Android better, do some things that my iPad won't. I like the 7" form factory, unlike Steve Jobs, and the lighter weight, and video out and USB without adaoters. Something like the eLocity A7, in the $300 range, but with 802.11n and Honeycomb, both of which I assume the next version would have, would suit me fine. It would work as a video player/eBook reader with internet access for times when even the iPad is too large/heavy. The situation with apps is pretty awful, but I think that Amazon introducing an Android app store is going to make a major difference in that regard. There are areas that Apple does not want to play in, and there is plenty of room for other tablets to do well in, as there was with netbooks.
And, no, "experience" is REAL and is a major advantage for Apple. The reason that the iPad is a revolution and has succeeded where all previous tablets failed is dramatically better ease of use. You give an iPad to a four year old, or a technophobe grandparent and he/she will understand how to use it. An Android, or Windows, tablet, will be met with nothing but confusion, and that matters - A LOT.

Apple has a built in crowd for their products. iPad 2 had a lot people upgrading from iPad 1, same with iPhone 4. They will always have that crowd. Their task now is to make "new" people buy into "Yes, it costs a lot more, but it is worth it" business plan. It is a risky move, unless they want to stay a nich company. HTC offers a wide range of phones, from low priced to top of the line. The good thing about that set-up is you can get in with a low cost phone, and move up the next time. Auto makers learned that a long time ago. The Apple store "experiance" may be important to some, but a better price point WILL move more product than just happy sales people. I bought my Macbook Pro from an Apple store, and it was a good experience. My wife upgraded to an iPhone 4 at the same store, and it SUCKED. Amazon will give Apple a run in the experience dept. Look at the amount of electronics they sell. People today are too savy about their purchases (thanks to the internet) and usually know more about the product than the sales person. Walmart sells flat screens now WITHOUT a tech dept because people know which TV they want BEFORE they walk in. I buy everything from Amazon, and not just because of the price savings, but because with a few mouse clicks, a nice box shows up at my house. Apple has sat on the app store while others have been producing a better phone. They are catching up in that dept, and won't take them long to figure out the rest. The way Apple has done things goes like this: You want a painting to hang in your den. You go to Apple, and they sell you a canvas in a frame. Then tell you to go home and paint your OWN picture. BUT, you can only use the paint they approve, even tho YOU PAID FOR THE CANVAS. And you have to buy the paint from them. People are going to start questioning why they have to do this. I REALLY hope Apple has an app, I mean, answer for that.

What rock have you been hiding under, Scott? This is the 21st century, man. You're re-hashing 1992 arguments:
"Apple has a built in crowd for their products."
You didn't quite say it, but you implied "fanboys." We don't really care what you call the 100+ million iOS users out there, but it's quite a big crowd and it's only getting bigger. "Apple fanboy" used to mean "one of the few fools who goes to MacWorld every year." Now it means "anyone who wants a quality product at a great price." Which brings me to...
"Their task now is to make 'new' people buy into 'Yes, it costs a lot more, but it is worth it' business plan. It is a risky move, unless they want to stay a nich [sic] company."
More 1992-think there, Sparky. Have you priced any of the iPad clones out there? Sure there are some cheaper ones, but you'll need to study Chinese for at least a year before you can use them. In reality, even mini-pad "tweeners" like the 7" Galaxy Tab cost more than iPad 2. With far less performance and half the screen space. And the real killer: you'll suffer through the cheesy droid 'experience.'
Give me one reason why you or anybody would pay more for less. We're listening.

Speaking as somebody who did go to every Macworld in the 1990s, I have to say you are a bit off base, but then again, so is Scott.
Apple does have a built in crowd for its products. Why take offense to that? If anything, it is testament to the brand loyalty they have built up, and earned. And there is a huge difference between "fanboy" -- which you said, not him -- and "anyone who wants a quality product at a great price." Apple has a ton of satisfied customers, but not all satisfied customers are fanboys.Put the strawman away and relax.
SockRolid is completely correct on the price front, at least for tablets. The iPad is both better than and cheaper than the competition, at least for the moment, unless you have some very specific needs. As aggressively as Apple has priced the iPad, it will be years until your hypothesized critical mass of price-undercutting Android|WebOS|Playbook tablets hit the market. If ever. (Heck, I hope they do -- the more competition, the merrier.)

Well "Sparky", I guess you flew past the part of my Macbook Pro, or my wife's new iphone 4, to go with my iphone 4, which replaced my iphone 3G, so, I guess I am as much to blame as the rest. And since you brought up the term "fanboy", those are the problem. They will buy ANYTHING with an Apple on the back. HTC is knocking on the door, Amazon is dipping a toe, and if Android gets its' act together, we could be looking at a perfect storm. And, my point, which I didn't think was that hard to grasp, was all they will have left will be the fanboys. In 1992, I didn't know ANYONE with an Apple product. Today, it's hard to find a person WITHOUT at least one, usually an iphone. But, these people LEFT another platform, and it will be just as easy for them to move to something else. Another point I was trying to make that seemed to escape you was the ratio of "up-traders" as opposed to new owners. While it IS great to sell a million units in your product launch, if 3/4 of those were existing users, then maybe the product is not as great as the numbers indicate.

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