Why Amazon's Tablet is the Only iPad Competitor

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Every time some company ships a touch tablet, the press immediately compares it to the Apple iPad.

“Motorola Xoom Android Tablet May Be First iPad Killer,” enthused MSNBC.com back in January.

As it becomes clear that Amazon’s long-awaited tablet is really an Android-based Kindle optimized for buying things from Amazon.com, some headlines are suggesting that it’s not a competitor to the iPad after all, but just a glorified eBook reader.

“No Worries, iPad, Amazon’s Android Tablet Is Just a Nook-Killer,” said Forbes.com

These headlines have it all wrong. The upcoming Amazon tablet not only competes directly against the iPad, it’s the only tablet that does so.

Why Amazon’s New Tablet Is Part of the Old Strategy
Why the Amazon Tablet is Not Like Other Tablets
Why the Amazon Tablet is Like the iPad
Why Amazon’s Strategy is More Ambitious Than Apple’s
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Why Amazon’s New Tablet Is Part of the Old Strategy

Observers pretend or assume that Amazon’s upcoming Android tablet, expected as soon as next month, is like other Android tablets. But this is crazy talk.

Amazon CEO Jeff Bezos didn’t wake up one morning and decide: “Hey, even though we’re an online store, we should become a consumer electronics hardware maker.”

Amazon has no interest in making gadgets, and no expectation that selling gadgets is a profitable business. In fact, Kindles and tablets are a means to an end.

The company’s Kindle eBook reader is part of a larger strategy to control electronic book sales. The Kindle’s sole purpose is to remove barriers to buying the electronic books that Amazon sells.

In fact, this removing of barriers is Amazon’s core competency. They find people who aren’t buying things on Amazon.com, figure out what’s stopping them, then remove those barriers so those people start buying.

Amazon Prime. Free shipping. Reliable shipping. Uncanny recommendations. Reliable and secure storage of credit card and address information. Mobile apps that identify products with the camera and let you buy them with one tap. Amazon does all these things because they all remove barriers to buying from the company.

Amazon is even installing “lockers” or short-term rental PO boxes in 7-Eleven stores so you can get items delivered anywhere you are. Now even being away from home is no longer a barrier to shopping on Amazon.

Amazon’s upcoming tablet serves precisely the same purpose — it removes barriers to buying from Amazon. That’s why the interface will be totally unlike your average Android tablet.

There are two ways to look at Amazon’s new tablet, and both are accurate.

First, the new tablet is a Kindle for multimedia content. (It may even be branded as the Kindle.) If you understand the existing Kindle to be a device optimized for finding, buying and reading Kindle books, then you can understand the new tablet will be that, plus a device optimized for finding, buying and “consuming” movies, TV shows, music, full-color magazines, apps, audio books, interactive children’s books and games.

Content like music and movies will be stored “in the cloud,” so all your content will be available to you at all times.

Second, the new tablet will be the Amazon.com web site in tablet format. No matter what you’re doing with the tablet, you’ll always be one tap away from shopping on Amazon’s newly redesigned-for-tablet-friendliness web site.

Amazon will use the tablet to remove barriers to you buying your groceries via Amazon, as well as clothes, gifts, gardening supplies — whatever. Either this or a future version will have some way to scan barcodes, so you can scan a product and buy it instantly.

The new Amazon tablet is the brick-and-mortar store’s worst nightmare. You’ll carry it around with you while shopping at the mall or the grocery store. When you find what you like, just whip out your Amazon tablet and buy it on the spot — from Amazon.

Why the Amazon Tablet is Not Like Other Tablets

Amazon’s tablet is being compared to the Nook, which is completely wrong. It’s not just a color eBook reader. It’s a power play to get you to buy everything from Amazon.

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.