Peter Kafka

Recent Posts by Peter Kafka

Amazon Could Sell Five Million Tablets in Three Months

The tablet that Amazon has yet to mention but which everyone expects to arrive this fall could be a big seller, with Jeff Bezos and Co. moving three to five million units in Q4.

That’s according to the Forrester research shop, which attaches the following qualifiers to its prediction:

  1. Amazon would need to price the tablet below $300.
  2. It would need to not screw up its supply chain.

As far as number two goes: Yep, sure. Good idea. That said, we should note that Amazon has had supply issues with its own hardware in the past, and that getting it right is hard for most companies, even those that produce hardware full time. Not a coincidence that the new guy running Apple has a particular knack for this stuff.

And as far as price goes — yes, cheaper things often sell better than expensive things. That’s the big lesson everyone took away from HP’s TouchPad fire sale, right? And it would make a lot of sense for Amazon to do what every other would-be iPad killer has not done, and compete with Apple by starting at a sub-iPad price.

But note that in Amazon’s lone entry into hardware to date, it has behaved like nearly every consumer electronics company does — start at a relatively high price point, then move down over time, while demand goes up. Remember that the Kindle, which now starts out at $114, was originally priced at $399 in 2007.

That doesn’t mean that Bezos won’t go low this time — just that it’s not a given. (Also, no need to listen when I crystal-ball-gaze on this stuff — I severely underestimated the Kindle’s impact four years ago.)

Speaking of advice — my favorite part of the Forrester report is when researcher Sarah Rotman Epps tells Amazon that the best way to break free of the pack of unsuccessful Android tablets is to not tell consumers that it is selling them an Android tablet. Right or wrong, it speaks volumes about Google’s struggles in the tablet war to date:

While some may view a partnership with Google as an asset, we see it as a challenge. Product strategists that we’ve spoken with at OEMs have voiced frustration about the limits of Android — its lack of polish, the terrible shopping experience in the Android Market, the rules that Google has set for Honeycomb use that limit differentiation, and the fragmentation of earlier versions of the OS. Only 9% of consumers considering buying a tablet actively prefer an Android tablet — compared with 16% who prefer iOS and 46% who prefer Windows. Barnes & Noble has chosen to emphasize its own brand and user experience on the Nook Color rather than emphasize the Google or Android brands, even though the Nook is built on Android. Amazon may not wish to go that far on the curation spectrum, but it does need to differentiate its flavor of Android from all the rest, and that may come from emphasizing the Amazon experience over the Google one.


Latest Video

View all videos »

Search »

First the NSA came for, well, jeez pretty much everybody’s data at this point, and I said nothing because wait how does this joke work

— Parker Higgins via Twitter