Wednesday, March 23, 2011

Tablets & Mobile Apps: Amazon the only company that can beat the iPad

By: Matt Rosoff
None of the current tablet contenders has a chance against the iPad 2 this year, but there's one company that could make a serious run: Amazon.

That's the conclusion from a new Forrester Research report.

Forrester thinks ablets like the Motorola Xoom (which runs Android), BlackBerry Playbook, and HP TouchPad are all too expensive for what they offer. Plus, none of these vendors can touch Apple's retail experience: customers really love walking into an Apple store, playing with an iPad, and getting personal service from a rep there.

As a result, Forrester predicts the iPad will end 2011 with at least 80% market share in the tablet space.

Unless Amazon decides to create an Android tablet. Then all bets are off. Here's why:Brand. 24% of consumers Forrester surveyed said they'd buy a tablet from Amazon, compared with 18% who would buy a Motorola tablet. Amazon is a strong consumer brand thanks to its decade-plus as the leading e-commerce retailer and more recent success with the Kindle. 
  • Channel. Consumers already buy consumer electronics goods -- including the Kindle -- through Amazon. Forrester found that customers are much more likely to buy a tablet from an online retailer like Amazon than from a wireless carrier, which is the main channel for most of these other tablets.
  • Content. Amazon already sells Kindle electronic books, music, and video content, and is building an Android app store that will launch later this month. And it's an obvious leader in e-commerce comparison shopping -- a top use of tablets.
  • Pricing flexibility. Most Apple competitors are relying on wireless carriers to market and sell their tablets. But the mass consumer market wants inexpensive tablets, and don't want to be locked into expensive wireless data contracts. Amazon has the leeway to sell a tablet below cost and then make up the difference selling goods and services online.
Forrester also concludes that Amazon has the motivation to launch its own tablet this year, thanks to Apple's increasingly tough rules for selling e-books and in-app subscriptions.
Forrester also concludes that Microsoft, Sony, or Vizio could disrupt the tablet market by launching their own tablets. In the case of Microsoft, at least, that seems very unlikely: the company is instead focusing development on Windows 8 and relying on its traditional OEM partners to package it on tablets.