Amazon: Content provider turns into device producer

Posted on by Mike Evans

On Wednesday we will know more about Amazon’s plans. Everyone expects an Amazon tablet to be announced and to sell for under $250. So the story goes, it will run a forked version of Android and will present an exclusive Amazon interface. It is suggested that Amazon, with its successful app store, dominant book store and direct relationship with its customers, could succeed where other tablet manufacturers have failed.

It’s an interesting proposition. So far we have seen computer manufacturers producing tablets and scrabbling to provide as much content as possible. Apple have succeeded in this beyond all expectations and their App Store is second to none. The device and the content have developed together and it is clearly a winning formula.

Until this week we have not seen the opposite approach in tablets: a successful content provider introducing a piece of hardware to maximise return. I’m excluding the e-ink Kindle, but Amazon have proved that in this specialist area a cheap content consumer device can succeed.

Whether this will be the case with the new Amazon tablet remains to be seen. There is tough competition out there, mainly from Apple, but Amazon could start with a significant price advantage. At $250, if rumours are to be believed, a half-decent tablet could succeed where HP and, to an extent, BlackBerry have failed. The question, though, is whether it will be a half-decent tablet or one that can meet the iPad head to head. 

I am not convinced that Amazon will have the ability to give the hardware and its future development the attention it needs. Apple succeeds by concentrating on the hardware experience and providing content as an added benefit. Amazon, on the other hand, will naturally concentrate on the content and, indeed, the content is clearly intended to subsidise the price of the tablet. I am not sure whether this content-led strategy can be successful in the long term. Wednesday will be an interesting day.

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