“Amazon is poised to enter the tablet fray with an Android-powered tablet in late September or October, a source with knowledge of the plans said yesterday,” Garett Sloane reports for The New York Post.
“The device will sell for hundreds less than the entry-point $499 iPad, a feat few tablet makers have accomplished, the source said,” Sloane reports. “Amazon is considered one of the few credible threats to Apple and has been willing to sell its electronics at a loss in hopes of generating more digital media purchases.”
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Sloane reports, “ITG Investment Research said that tablets running Google’s Android are starting to chip away at Apple’s iPad marketshare, and price will be key to further erosion. ‘We expect to see more and more lower-end, more-affordable Android devices enter the marketplace, which should further allow Android to increase its share,’ said Tony Berkman, CEO of ITG.”
Read more in the full article here.
MacDailyNews Take: If this is true, we can’t wait to see that piece of plastic AppLack™ in all of its $299-at-most glory. Screen size? Screen type? Screen resolution? Battery life? Camera(s)? Lots of details to find out. Watch those Apple patents now, Jeffie, or you’ll be spending more on lawyers than you will on subsidizing your little “iPad killer.”
[Thanks to MacDailyNews Reader “Brawndo Drinker” for the heads up.]
It’s the other Android tablet makers that should be worried!
So…
1. Bring out a slate that is hundreds less than the iPad but reeks of cheap components and workmanship
2. Bring out a slate that is hundreds less than the iPad but is subsidized and cut the other Android OEMs off at the knees
3. Bring out a slate that forks Android and replaces Google’s ecosystem with Amazon’s ecosystem–that’s gonna be FUN!
My prayer is a combination of the above options.
And I still have to laugh uncontrollably when people say that Amazon has mobile consumer hardware chops because they’ve been making the Kindle.
Forgot the 4. point.
4. Just in time for iPad 3
Don’t knock the kindle– it is the greatest achievement of Soviet industrial design!
Exactly, this will decimate other Android manufacturers as they do not have the digital download offering to subsidize their tablets. Google will be pi$$ed! And it makes the Motorola acquisition a more terrible one than it is.
If you cut corners you bet you can undercut the iPad But, that is a BIG but, how well will it work? What performance will it have, and how will the customer perceive the tablet for the next purchase.
Most of all- what will the word of mouth be for this cut rate design? Ummm, it may be another doa product.
So, hp sells their HP Touchpad for 99 because they are discontinuing it and it sells like hot cakes and others see that as a way to beat the iPad? Muhaaaaaaaaaa! Wrong answer 🙂 a 99 dollar tablet is a 99 dollar tablet for a reason.
Actually, the HP Touchpad was a more expensive tablet sold at a massive discount (and big losses). A true $99 tablet is a true POS, like that knockoff being sold at the drug stores. No value, little profit, waste of time and energy.
And then Apple drops the iPad3 price $50 and everybody runs back to Apple…
Or add some sparkle and keep the price steady and everybody still keeps coming back, because there is only one tablet that matters to anyone: iPad.
Amazon will soon learn that the issue here IS NOT the Price… it is the Apple Ecosystem that makes the difference….
Amazon is the one other possible contender with a tablet ecosystem. They’ve been working on the Kindle for as long as Apple has been developing iOS.
Not that I really think Amazon is a really threat.
It doesn’t matter how long Amazon has been working on the Kindle. The Kindle is like an iPad the way a bicycle is like a BMW. Both will get you to the corner drugstore, but…
And what sells in bigger numbers, do you think? Beemers or bicycles?
You’re completely missing the point. Of course consumers buy more bicycles than BMW’s. But people who buy bicycles are not interested in BMW’s; thus their buying habits have no effect on the BMW market. Apple never has been, and never will be, in the bicycle business.
For a lively discussion of Apple’s attitude toward profit, see the MDN article “Steve Jobs made Apple great by ignoring profit”
I think we’ve both missed the point, my friend. Because you’re effectively saying “What’s the point of selling bicycles?”
Well, I don’t have a BMW. But I have 2 very nice mountain bikes. Amazon may just not be interested in the BMW business.
Not saying that at all. The title of the article is “Amazon poised to debut Android-powered tablet for hundreds less than $499 iPad”—implying that Amazon’s bargain-priced tablet will compete with the iPad for customers and potentially threaten the iPad’s dominance. All I’m saying is: No, Amazon’s “bicycle” will not be a threat to Apple’s “BMW” because people who are satisfied with a bicycle wouldn’t buy a BMW anyway, so BMW dealers don’t need to concern themselves about the debut of a new bicycle.
Of course ChrissyOne is correct. Personally I do not believe any Android device and Android ecosystem to be better than Apple’s iOS. Not by a long shot. Phones or Tablets. However, Amazon has the books/mags/music/movies to rival Apple’s content. It certainly isn’t the same user experience but if people think that a $299 Amazon tablet won’t sell like hotcakes, you are deluding yourself. For a large part of the population, cost is everything. People that can’t afford iPads will turn to the Amazon tablet. While Apple’s iPad will still grow at a huge clip, the cheaper tablets will grow fast as well – as long as they have a media ecosystem to support it – which Amazon does. Mostly, this tablet will cannibalize other Android devices.
What I am most curious to see is how these low cost tablets affect other manufacturers: Especially Samsung & HTC who do not have the content to subsidize tablet pricing. This will kill their tablet offering. As for Motorola, well, they won’t be able to compete either unless Google subsidizes.
Very interesting indeed.
Try reading before replying. I never said that a $299 Amazon tablet won’t succeed. Of course it will “sell like hotcakes”! It’s cheap, and that’s all most people care about. It has nothing to do with affordability. Amazon’s target audience, the people who won’t spend $499 on an iPad, will blow a few hundred bucks taking their families to a baseball game. It’s about perceived value, not price. Most people who buy based on price don’t see the value in spending more. So be it.
ooh – ANOTHER crappy android tablet – so scary
it was never even intended for tablets to begin with
And don’t forget display quality. I detest the Kindle’s current screen technology. No color, no photos, no graphics, no deal. I also detest display quality on every Android cell phone I’ve seen so far (but I have not seen them all). They are not sharp and the color’s aren’t calibrated for daylight balance viewing and editing…
No photos or graphics on the Kindle? Hmmm… Mine must be broken.
Well ok… let me fix that for him, the kindle has horrid graphics.
The kindle would have been a really cool, as a late 90’s product (kind of like a big Palm) But in 2011, it is really primitive graphics wise.
This is nothing but bluster bordering on blank if the timing of the pre-scheduled exercise of options is close to this fabricated dribble.
Of course our esteemed regulators will not bother to check the timing of the sales to pseudo-news releases by the payola media.
The shysters get their news to mitigate apple share price while the pre-scheduled options sales get optimized. I bet if apple released the next beta today, the share price would have fallen and the amazon tablet killer would have been the cover for the market makers to take down the PPS. The shysters are worried apple might release the invites to the iphone and catch them flat-footed.
Amazon will soon learn that the issue here IS NOT the price… it is the huge Eco-System Apple has created around iPads and iPhones which is years light ahead of the competition, iPhone is one of the most expensive phones out there, Macbook Air is not cheap and they sell like pancakes… so cheaper price is not the solution but the right Eco-System which they won’t be able to create…!!!
Amazon will soon learn that the issue here IS NOT the price… it is the huge Eco-System Apple has created around iPads and iPhones which is years light ahead of the competition, iPhone is one of the most expensive phones out there, Macbook Air is not cheap and they sell like pancakes… so cheaper price is not the solution but the right Eco-System which they won’t be able to create…!!!
It seems to me that Amazon’s goal is to manufacture tablet with the production quality of a Samsung Tab (i.e. reasonably close to the iPad), but subsidise the retail price in order to undercut Apple.
If this is the case, I am struggling to see the purpose. Apple is NOT Amazon’s prime competitor because of the iPad 2. After all, Kindle app has been available on the iOS ecosystem for a very long time.
If Amazon really does come out with a sub- $300 Honeycomb tablet with hardware comparable to the iPad, it will only undercut Samsung, Toshiba, LG and everyone else who had hoped to produce an iPad challenger. Thanks to Apple’s extremely beneficial component supplier contracts, nobody else can build comparable hardware for nearly as little money as Apple can. Even if they try matching Apple’s price, they’ll still be taking a hit on the margins (barely making any meaningful profits, although they are already used to razor-thin margins on PC hardware). If Amazon forces their retail pricing further down, they will likely have no other option but exit the market altogether.
Whatever happens in the end, the only winner will be Apple.
Good god , when will they learn. Amazon’s kindle has shown us that they don’t have any design chops, nor any software skill, nor any purchasing power. All they can do is leverage their content to subsidize the hardware, but in fact, they do the opposite. They subsidize the content. I hope amazon comes out with a tablet, only to shut these numbnuts up.
I agree, I wish they would because it will be nothing more then a nook.
I do not think there will be any. this is nothing but baloney to manipulate the stock price of apple and amazon. Apple to the negative while amazon to positive. I wonder when the next scheduled sales are for the bod and execs of amazon.
“Amazon…has been willing to sell its electronics at a loss in hopes of generating more digital media purchases”…..Isn’t this the reverse of what Apple did with iPods and iTunes–the iTunes being the loss-leader to sell devices?
Quite frankly, on the surface, it sounds like it might work.
The only reason I haven’t bought an iPad yet is the cost…and it’s to big to hide from my family :-{}
Looks like Goog Amzn and Samdung all waiting for Apple to announce their next date for the upcoming event so they can ride on their coat tails by using the same date for their iwn announcements and try to dampen the effect of Apples next product(s).
Only thing is their announcements will just get buried in the Apple product news.
The cheapskates will get what they pay for.
I wouldn’t be surprised if Amazon is doing this because Apple is working on something similar–a reduced priced iPad with a content subscription plan.
Umm. Didn’t they learn anything from HP, Compaq, Gateway, Aces, IBM, and Dell in regards on racing each other to the bottom of the barrel on price? Yes, they can do it cheaper but if they make no profit then what’s the point. We’ve already seen this strategy done with great initial success but eventual failure. IBM, Compaq, Gateway, and HP (as well as others) did this with the PC and now they’re either out of or getting out of the PC business. Dell has to sell a lot of PCs to make a profit on those margin basement prices. So, now they’re going to try and do this all over again with tablets? Did they learn anything at all?
What other choice is there, if they want to be in the tablet space, but to race down to the bottom of the barrel. Unless the can somehow magically transplant the creative innovation team from Apple into their own companies, they simply cannot compete on function, so the only option left is to compete on price (i.e. race to the bottom).
You’re missing the most important aspect: they CAN’T do it cheaper. Apple has cornered the market with huge orders for screens and other components, giving Apple almost exclusive-like access to components – memory, screens, chips, etc.
Moto, HP, Dell, etc. all found out the hard way that they can’t touch Apple on price if they try to have the same/similar level of hardware features.
That’s the real issue with tablets: The iPad is both the top and bottom of the barrel. There’s just not room for anyone else at all.
As we have already seen it almost impossible to launch a tablet that has iPad like quality for less than $500.
Also known as an Etch-A-Sketch.
They have a content eco system in place. A big plus. Price competion is the big thing.
Hey Amazon, I see that the PanDigital tablet has dropped from 299.99 to 84.95….how’s that working for you? 🙂
Yawn.
Oh, and where are all these tablets that are “chipping away” at Apple’s lead? Let’s see:
1. Xoom – discontinued
2. Galaxy Tab – banned in Europe, not introduced in Australia, and sitting in warehouses in the US
3. TouchPad – discontinued and fire saled
4. PlqyBook – no one owns a Blackberry anymore, so it can’t even do email
5. ACER, Toshiba, etc. dropped their products before even demoing them
Yup, looks like Apple’s got real competition here! I see that lead slipping away by the second.
I would not ignore Amazon. Unlike Samsung, HTC, and the other Android table makers Amazon doesn’t have to make money on their tablet as they have content. If the can integrate the Amazon content as seamlessly with their tablet as Apple has with iOS (and that is a HUGE IF) then this scheme can work. Amazon can easily lose $200 a tablet and make up that lost revenue with content sales.
I don’t think Amazon can lose $200 a tablet. I have some Amazon stock and I follow them like a hawk. They have barely a 2% profit on their sales. Where will they get the money for a loss leader like you suggest? Amazon is like a grocery store, they succeed by huge volume with tiny profit percentage. And if they lose the sales tax battle being waged by a number of states they will have even more trouble making money.
You can’t take a bath in hardware sales just to make a small percentage on content. There’s no way they can integrate hardware and OS like Apple can because Amazon doesn’t control the OS.
Like what they did with a double-whammy to book publishers before Apple changed the revenue-sharing formula? First they took 70% of the revenue, then they double-dip by using their extortionate profit to sell the books below cost.
I was going to buy a Rolex watch the other day, but a company came out with a sun dial watch that was hundreds of dollars less then a real Rolex. Works great during the day, but the dial doesn’t work well after nightfall, and it’s hard to go to sleep with it on as it pokes you. But I saved a lot of money.
Right–besides, who needs to tell time while they’re sleeping?
It’s all good.
Kindle is like a one trick pony. Not a good one at that either. Yet it’s alwas #1 on Amazon. Hmmmm
This is the figure I like to see:
AAPL market cap 361.54B
XOM market cap 360.38B
AMZN market cap 93.74B
Will get there and beyond.
With a P/E of 91.05 AMZN investors must expect a HUGE return on investment – for Amazon to grow profits at an astounding rate. Shouldn’t Amazon focus on bringing in some actual money rather than releasing a low margin device? Look for investors to dump this stock on profit worries.
It looks to me as though Amazon investors don’t care about the high P/E as the stock continues to advance at a faster rate than Apple stock. They must think that there are going to be profit returns. I don’t know why Wall Street keeps gambling on this Amazon tablet. Everything is so vague about it. Wall Street and analysts didn’t bet that heavily on the iPad being successful when it was actually introduced, so I really don’t get their current enthusiasm at all for this unknown quantity Amazon tablet. I’ll be curious to see if Bezos will be able to somehow hide Amazon tablet sales numbers from analysts like they do the Kindle.
There must be some serious faction that is backing Amazon on blind faith and I wonder who they are. Why would they bet on an Amazon tablet over the iPad 2 and Apple’s ecosystem? That really doesn’t make any sense. Apple is in a position to do anything it needs to do in order to weaken Amazon’s tablet sales. It sure better not look anything like the iPad or Amazon will be in deep trouble.