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Amazon set to release low cost tablet for end of year sales

Challenging the iPad hasn’t been easy. Many well known companies have tried, and failed. The Motorola Xoom is a great tablet, but sales haven’t been phenomenal. Other products such as the BlackBerry Playbook have failed to excite the public. The HP Touchpad was a complete flop, dying before it even had a chance.

With Amazon about to release their new tablet in time for end of year sales, will they be able to claim some of the market?

The Kindle has been a great success, the price point is perfect and the online store support is first class. Amazon will have a lot riding on the success of their upcoming colour tablet, because for them, it is a new and competitive market. Launching a successful e-reader was no problem for Amazon, but a ‘jack of all trades’ tablet is a completely different ballgame.

The strategy for Amazon should be simple. Keep the pricing competitive, and ensure that the online store system is loaded with downloadable content to keep the punters happy.

Amazon work in a similar way to Apple, they keep all their cards close to the chest. This means that little information has leaked for the upcoming launch, although they do plan on holding a news conference in Manhattan in a few days time. Rumour is that they will detail the product at this event.

Can Amazon recreate the Kindle success story?

While no details have been confirmed, the general consensus from analysts and experts so far is that Amazon will sell their tablet for $250, this should hopefully translate to £200 in the UK. This means it is half the price of the iPad, which is already a good start.

The Amazon tablet should be launched with a 7 inch model, compared to the much larger iPad. It will be a similar touch screen design and a larger model will be due for release the following year. No pricing information has been discussed for this, but it will cost more than the 7 inch model.

Amazon will probably break even with the sales of their tablet. Their strategy is to make money long term on the sale of software from their store. No other company has a strategy like this, and it might prove a tipping point in the battle against the iPad. That is, obviously if the hardware is good.

Research has shown that many people use a tablet for light weight duties, such as email and surfing. Purchasing apps online falls in behind. Amazon will most certainly have these bases covered, right at launch as they have such a strong store infrastructure in the USA and Europe.

Amazon have already proven they can make a loss on selling hardware, while generating revenue over the months. Their Kindle device for instance sells for £111 (Wi-Fi) and £152 (3G) in the UK. They made healthy profits by simply selling books directly from their own website.

Analysts reckon that the Amazon tablet will not cause too many problems for the iPad, but the wealth of Android tablets will surely suffer the most as they all scramble to take a very small percentage of  the market.

Kitguru says: Can Amazon do it? We reckon they will be one of the few success stories in the tablet sector.

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