Why Amazon's Tablet is the Only iPad Competitor: Page 2

The iPad and Amazon’s tablet both have strategies for separating people from the burden of their money. Yet Amazon’s dream is far more ambitious.
Posted September 7, 2011

Mike Elgan

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Amazon's tablet is also often compared to other Android tablets, as well as RIM's BlackBerry Playbook and HP's now semi-defunct TouchPad. This is also totally wrong. These devices are sold as consumer electronics devices. The money comes mainly from the sale of the device -- like a toaster or a lamp. Amazon's tablet is a catalog and cash register, and also a device to "consume" what you have purchased.

Amazon's new tablet, and new tablet strategy, are completely different from the other eBook readers and from the other tablets -- except one.

Why the Amazon Tablet is Like the iPad

Most tablets are sold to make a profit on the hardware, to "fill out" the line that hardware makers offer and fill the gap between cell phone and laptop. This is the case with the iPad, but not the Amazon tablet. Amazon may even lose money on tablet sales.

The iPad is part of a larger, comprehensive strategy for separating people from the burden of their money in many ways. In addition to hardware sales, Apple makes money from accessories, from app sales and from advertising.

But most of all, Apple intends to make money from iTunes purchases.

From Apple’s business perspective, the iPad is primarily a device for buying content from Apple. In the future, iPad users will buy, rent or subscribe to music, movies, TV shows, eBooks, audio books and more, which will be stored "in the cloud," available at all times from anywhere.

Sound familiar? This is the electronic part of Amazon's strategy.

Both companies are dabbling in multiple businesses with their tablets. But the Big Prize is the future of downloadable content. The Apple experience will be better. The Amazon experience will be cheaper. But these are the only two real players in this field.

No other company besides Apple and Amazon are selling tablets as part of a larger strategy to control the future of music, movies, TV shows, books and more.

Why Amazon's Strategy is More Ambitious Than Apple's

While Amazon and Apple will compete head-to-head for the future of downloadable content, Amazon is eying a much bigger prize: Everything.

You'll be able to buy an iPad from the Amazon tablet, but you’ll never be able to buy an Amazon tablet from the iPad.

And some people will own both, not because they want two tablets but because they want two stores.

Amazon’s new tablet will be a force to be reckoned with, and part of Amazon’s long-term strategy to get everyone to buy everything on Amazon.com.

The strategy is bold, brilliant and will probably contribute massively to the company’s long-term success. And the only company standing in their way for downloadable content is Apple.

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Tags: Amazon, iPad, Apple, tablet

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