Amazon Tablet

Amazon.com has been one of the world’s largest online retailers for more than a decade now and in that time, they have developed a reputation for offering anything under the sun for reliable prices. They have also stirred up some controversy for their approaches to certain aspects of the business. So, it will be very interesting to see what they do in the coming months as they prepare to launch their first foray in the tablet PC market.

The Kindle has been on the market for almost 3 years now and in that time, the device has grown from pricey novelty to a must-have for beach goers, frequent fliers and busy parents. It’s a great device that is lightweight, easy to carry, and incredibly efficient in terms of battery life and storage space. But, I’m interested to see how that will convert when Amazon takes on Apple’s megaton behemoth of consumer electronics.

On their Side

One thing that Amazon has going for it that other companies do not is the fact that they have about 90% of the necessary ecosystem in place already. Even Google has struggled thus far to put in place the necessary tools for an Android tablet to be a break away success. Whether you like how it works or not, Apple’s iTunes store and software is a a central reason the iPad is so successful – anyone can access anything from anywhere.

Amazon has the tools to make this happen on their own tablets. Their Kindle store is among the largest bookstores on the web, their new Appstore for Android is efficient and easy to use (more so than the existing Android App Marketplace) and their MP3 and OnDemand video services are continuing to grow larger, recently augmented by their cloud storage service.

Combined with everything Google can do with their Apps suite and the rapidly growing collection of tablet apps for Honeycomb devices, and you have a combination that very well could take on Apple’s juggernaut successfully without being relegated to a niche like the Playbook.

What it Will Take

I don’t know what Amazon needs to do to be successful in their endeavors, but they have the tools and the track record to make it happen. If they can segue their device lineup from the user friendly (and very popular) Kindle format to a tablet that effectively offers everything that makes Amazon an increasingly great Apple alternative, combined with Google’s mobile OS, we very well could see a new contender for consumer cash in the coming year.

I noticed an interesting story the other day mentioning that Barnes and Noble is starting to solicit app development for the Nook Color. They plan on supporting Android on the device as well, and Amazon is seemingly working up to their own Android solution for the Kindle with the launch of the Amazon Android App Store.

It makes me wonder what the market holds for the dedicated eReaders that have been so popular for the last three years. After all, the tablet boom started with the release of the Kindle and the Nook – lightweight, portable devices that made it possible to carry thousands of books anywhere.

I doubt Apple was solely responding to the eBook market, but they surely used it to market their iPad to a demographic that consisted of middle-aged and older consumers who were previously considering an eReader. Why buy an eReader when you could get a tablet PC that can do so much more for only a couple hundred extra dollars?

Consumers responded by purchasing more than twice as many iPads in 2010 as Kindles and the numbers are growing. So, as the market speaks and the devices grow more complex, the question comes up – do we really need eReaders at all?

Think about it – these devices are designed to do just one thing, and while they are less expensive than tablet PCs, does that matter in a world where users want to simplify as much as possible. Sure there are some users who don’t want yet another device to check email and watch video, but most people are happy to invest $500 instead of $140 to get a device that goes above and beyond single function use.

I think Amazon and Barnes and Noble know this – they are already changing their marketing strategies to make their high end readers more tablet-like than they currently are. Soon enough both companies will be selling low end tablets instead of eReaders.

Is that necessary? Does every device on the market need to compete directly with the iPad. For that matter, can every device out there actually pull it off? Right now, no one has come close to the sales and media reach of the iPad. The Samsung Galaxy Tab and Motorola Xoom both did okay, but neither took off quite like the iPad. Should Amazon or Barnes and Noble expect anything different?

The real issue here is finding a niche that works and developing products that are unique enough in that niche to maintain profits. It will be interesting to see what happens in the next few years, especially as technology develops. If Amazon or Barnes and Noble can produce a device with a digital ink screen that also happens to play apps and surf the Internet, what kind of market will they find? I feel there’s a niche to be had there (just look at the interest in NotionInk’s Adam with the Pixel Qi screen), but only if companies stop trying to compete directly with Apple and find new ways to innovate in the field.

If you’ve been in the tablet business for a while, the whole “eBook reader” debate probably seems like a strange impetus for a massive surge in sales, but nonetheless it seems to have had a big impact. For sure, the sheer volume of Amazon Kindles and Barnes and Noble Nooks that were sold in 2009 definitely changed how Apple initially introduced and marketed their tablet, particularly with the inclusion of iBooks, which admittedly hasn’t done that great compared to Kindle and Nook apps.

And no, most people who bought an iPad or Galaxy Tab in 2010 didn’t do so because they wanted to have a really pricey eBook reader, but buried down in there is the fact that a lot of people who would have bought a Kindle or Nook changed their mind when they saw how amazing a tablet could be.

In effect, the tablet market grew faster in 2010 because a lot of people were already considering buying an eReader and decided it made no sense to spend more than $200 on a device that only did one thing. With some careful marketing and the eventual support of the two major eBook distributors, Apple and later Android devices took advantage of this to provide products that did a lot more than an eBook reader for a slightly higher price.

These days I’m seeing a lot of discussions about color eReaders and whether the screen of an LCD device can match digital paper. However, the real issue here is how many people really need a device to read books compared to a device that will allow them to write email, watch movies, surf the web, and read books. More importantly, is it fair to the medium to compare what could be a full-blown computing solution to a gadget like the Kindle?

Is there a future for eReaders? Of course. Amazon figured it out very fast and dropped the price of their WiFi only Kindle to less than $150, well below the entry level prices of most tablets. Unfortunately for them, however, that probably still won’t convince tablet owners to buy yet another device. Despite the battery life, weight, and e-ink display, it just isn’t as flashy and spending another $150 for something that duplicates a feature on their tablet is a tough sell.

That’s why the move by Nook to produce a color unit for $250 is interesting. It partially bridges the gap between the clunky button interface of a Kindle and the super slick touch screen of a tablet. We’ve still yet to see a tablet truly replicate the eReader experience. They are heavier, experience lots of glare problems and are generally more expensive, so people who don’t need or don’t want all that extra technology will shy away.

If Notion Ink’s Adam with Pixel Qi is the real deal, it might be a good solution, as might other future devices rumoured to be considering Pixel Qi. For now, however, there is an oddly symbiotic relationship between eBooks and tablets. Neither side can quite figure out if they are competitors or complementary formats. When they do, it will be interesting to see what happens.