John Paczkowski

Recent Posts by John Paczkowski

Can Amazon Create a Non-Apple Tablet Market?

With no second-place contender to challenge it, Apple remains the lone champion of the tablet market. But that could change with the debut of Amazon’s forthcoming new device.

In a note to clients, J.P. Morgan analyst Mark Moskowitz said that Amazon’s digital media offerings and vast user base will position its tablet well against the incumbent iPad.

“We believe Amazon’s entry into the tablet market could provide a shot in the arm to the non-Apple tablet market,” Moskowitz wrote. “Amazon has hardware experience with the Kindle, and as it has shown with the successful e-book reader, the company is willing to sell hardware at a loss. Inputs from research contacts suggest that an Amazon tablet likely would be at a price point lower than an iPad. While the OS is likely to remain a weak spot on an Amazon device, we believe the brand name, content and distribution capabilities of Amazon pose risks to Apple’s dominance of the market.”

Or a challenge, anyway.

According to the latest metrics from IHS iSuppli, worldwide “media” tablet shipments will hit 60 million units this year. And of those 60 million tablets, 44.2 million will be iPads. In other words, 74 percent of the market this year will belong to Apple.

So Amazon’s got its work cut out for it. But it has also got a better set of tools than most to work with. The company’s tablet will almost certainly be built to tap in to media services like Kindle, Amazon Instant Video and Amazon Cloud Player. It will likely be built to support its Cloud Drive storage offering, as well. If Amazon gets the UI and form factor right — and early reports suggest it may have — this could be a compelling piece of hardware and a true iPad rival. Remember, Amazon, like Apple, has not only a big storehouse of mobile content, but a massive base of registered, credit-card-holding, trusting users to sell it to.

And those are tremendous advantages, particularly in a market that has seen so many comers without them struggle or fail, sometimes miserably.

Said Moskowitz, “Amazon’s entry into the marketplace could be interesting.”

If nothing else.


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