Posts Tagged ‘Amazon’

The tablet market (often referred to as the “iPad” market) is going to get a complete upheaval in the second half of this year, courtesy of Amazon.

Rumors are flying that Amazon will be releasing a 7″ dual-core tablet (code-named “Coyote”) for about $300 and a 10″ quad-core tablet (code-named “Hollywood”) for about $400, both with color lcd touchscreens.  They will run a version of Android, possibly an Amazon-improved version of Gingerbread (“Kindlebread” as one writer called it) or the tablet-optimized Honeycomb or Ice Cream Sandwich.  Tech spec rumors vary widely.  Depending on whose column you read the tablets will include front-and-back cameras, USB ports, SD slots, and a variety of other amenities.

What the technical press does agree upon is that Amazon is the first company to offer a tablet which has the content ecosystem in place to challenge Apple for dominance is this field.  They mention Amazon’s extensive Kindle eBook library (still far larger than Apple’s iBooks), it’s Amazon mp3 music library, the new Amazon Cloud Storage and Amazon Cloud Player services, the Amazon Prime video streaming service, and the growing Amazon Appstore for Android.  And they’re right.  Amazon has a content ecosystem that likely exceeds Apple’s.

But there is one more thing they don’t mention very often, which makes me think the technorati don’t understand yet how big this might be.

Apple is big.  Very big.  And they sell lots and lots of iPhones, iPods and iPads.  For people under the age of thirty the vast majority have an iTunes account.  Yet the biggest part of the population is over thirty (remember that baby boom?).  And those older folks all have Amazon accounts.  Grandmas buy books from Amazon.  They don’t necessarily buy mp3s from iTunes.

I’d be curious to hear an accurate count (unlikely) of the total number of credit-card-bearing members of iTunes and the total number of credit-card-bearing members of Amazon.  I’ll bet you Amazon would win, hands-down.  There is a huge market of folks out there who are not “early adopters” and have not yet purchased an iPad.  But when Amazon offers a tablet, optimized for one-click purchases of books, music, movies, and apps, they will bite.  Because they know Amazon.

As an example:  Getting people to subscribe (i.e., pay actual money) to streaming video services seemed impossible for a very long time.  Then Netflix came along and merely added it as a service for their millions of already-existing already-subscribing DVD-in-the-mail customers.  Now they have masses of people dropping the mail-in service and keeping the streaming service.  People knew Netflix and made the transition because they already had an established relationship.  Amazon already has millions and millions of members signed up, with purchase histories and credit cards and addresses and wish lists.  A tablet will be just another extension of the Amazon services so many people already enjoy.

I would hazard the following prediction:  If Amazon does indeed release tablets that even come close to those described above and do it with their typical effiency and smart marketing, they will come – within the first year – close to iPad sales numbers.

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