Business: Amazon’s Tablet to Give iPad a Fight



Amazon.com is set to enter the tablet market with an affordable alternative to the iPad.

Amazon.com is set to enter the tablet market with an affordable alternative to the iPad.

Amazon.com Inc, the company responsible for the revolutionary Kindle e-book reader, is expected to announce a tablet computer this week. Analysts say that the tablet will be a serious player in the tablet market, giving Apple’s iPad, the unchallenged king of tablets thus far, a run for its money.

Wednesday’s conference

On Friday, Amazon invited media from all over the United States to a press conference set to be held this Wednesday in New York, but did not provider any further details.

“Wednesday is tablet day,” BGC analyst Colin Gillis told Reuters, despite no official information from Amazon. Analysts across the board are sure that Amazon will be making a move to go beyond its internet retail business, and hold its own in the world of mobile commerce goods and services.

Amazon’s tablet has been anxiously awaited as a competitor to the iPad, which Apple has sold more than 29 million of since its launch in April 2010.

Pricing

Gills said, “Knowing Amazon, it is likely to be a very aggressive price.”

This means that while the tablet will be very good for consumers, offering competition in hardware and in pricing, the tablet may not be great for shareholders. Amazon’s habit of keeping prices low to undercut rivals means that the tablet will have much smaller retail margins.

Experts predict that Amazon will keep the price of it tablet low to attract users, thereby selling other content and services. They point to the business model of the Kindle, which quickly gained traction among readers for its affordability, to illustrate.

James McQuivey, analyst with Forrester Research, calls Amazon’s notorious pricing “a marketing tool” that the company uses “to build a relationship with consumers.”

If the TechCrunch blog is right, Amazon will be building relationships with many consumers that would otherwise have gone to Apple, as it’s new tablet is set to be a 7-inch device priced at $250, almost halving the iPad’s price.

The device’s name, reportedly also Kindle, will follow in the path of its e-reader predecessor in being a “game changer,” analysts agree.

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