The Amazon Tablet Opportunity Could Be Huge

by Ben Bajarin   |   June 4th, 2011

I have fielded a lot of questions recently regarding the rumors of Amazon making a tablet of their own to bring to market. Right off the bat there is enough data out there to support this rumor, so I am certain Amazon is bringing a full featured tablet to market.

I make the distinction of full featured tablet because of the rise of the term “feature” tablet. The current Kindle as well as the B&N Nook Color are examples of feature tablets. A feature tablet is a tablet that focuses just on certain features like e-reading, navigation, gaming etc. Where a full featured tablet is a more general purpose than feature specific device.

Why Would Amazon Bring a Tablet To Market?

I think the answer is simple. Because Amazon is a services company, much like Google in a lot of ways. Services companies need hardware and software partners to give consumers access to their services. Case in point, without a PC and an Internet connection consumers could not utilize Amazon’s services. As Amazon realized the future of digital books as a sales medium they filled the hardware void with their own Kindle E-reader, doing so they gave consumers access to their service of the sales of E-books. Similarly Amazon has services aspirations for digital music, movies and apps.

One strategy could be to be device agnostic with your services. Meaning make your services available on a number of devices and hardware. Similarly to what Amazon offers with their Kindle app for iOS and Android. Although Amazon offers their own hardware with the Kindle, they also offer access to their services on other hardware VIA their app. So again the question is why bring a tablet to market when they can simply offer their services on other people’s hardware?

I believe the answer is because they believe they have an opportunity to offer a better hardware experience with their service by tightly integrate those services into hardware they create. Many tablet makers and Android tablet vendors specifically, are launching tablet hardware on the basis of Google software and Google services. Amazon’s entry would most likely be Android based but rely more on Amazon’s services rather than Google’s.

This could be very interesting, and the reason I think it could be a huge opportunity for Amazon is because Amazon’s services are a differentiator in a market where there is a great deal of similarity.

Everyone making Android tablets looks the same. An Amazon based Android tablet with access to Amazon’s app store, music store, movie store and more could be a significant differentiator, setting them apart and gaining consumer attention.

Also what I find interesting, is that Amazon is in a much better position, in my opinion, to compete with Apple from a services standpoint. Mostly because I feel consumers will trust Amazon more than they trust Google. Over 100 million consumers already trust Amazon with their credit cards and the convenience of 1-click purchase will resonate as a selling point for anything Amazon does.

By taking their services and easy of 1-click purchase and tying them to a solid tablet would be a brilliant move by Amazon, and this is why it’s a no brainer for Amazon to add tablet hardware to its already successful Kindle ebook reader line of products.

Ben Bajarin

Ben Bajarin is a Principal Analyst at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research. He is a husband, father, gadget enthusiast, trend spotter, early adopter and hobby farmer. Full Bio