Sunday, September 4, 2011

Amazon's cheaper Android tablet could change the industry

Apple has made it look easy with the iPad.

It has sold tens of millions of the tablet computers -- singularly defining an entire category of mobile devices -- as competitors have tried and failed to gain any significant traction against it.

But there will likely be a newcomer to the race this fall that could change the tablet industry forever.

Online retail giant Amazon has hinted that it plans to offer its own tablet computer running Google's Android operating system, perhaps as early as October.

Research firm Forrester said last week that it expects Amazon to sell 3 million to 5 million tablets in the fourth quarter this year if it can keep up with the demand.

The main reason: Amazon is willing to sell hardware at a loss.

Amazon's tablet could be priced at $300 or lower, significantly less than the base-level $500 iPad.

Like Apple, Amazon is also in the business of selling e-books, streaming movies and digital music. The more tablets it has in users' hands, the more e-books it can sell to them -- which is where Amazon is hoping to make even more money.

"Amazon's quick ascension in the tablet market will completely disrupt the status quo," said the report's author, Sarah Rotman Epps.

Amazon has sold millions of its Kindle e-readers using this strategy. The Kindle starts at $114 for the ad-supported WiFi version.

Software follows hardware

The likely success of a tablet from Amazon would be sure to invigorate the Android software system, which has faltered without a compelling piece of hardware.

Several Android tablets have been released this year, but each has landed with a thud -- too heavy, too expensive or just not quite there.

That has kept many software developers from creating apps for Android tablets, which causes even more consumers to choose the iPad.

Google doesn't make an exact count of tablet-optimized apps available, but most educated guesses place it in the low three figures.

Apple has more than 120,000 apps for its tablet.

A blockbuster tablet from Amazon would change things, creating a serious incentive for tablet app developers to work on both platforms.

I don't often advocate waiting on the sidelines for an eventual product release.

But the prospect of a less-expensive Android tablet, especially when paired with the expansive digital media offerings of Amazon, is enough to give a buyer some serious pause this fall.

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