As much as it pains me to write this, truth is truth. It’s looking more and more likely that Amazon will launch its long-awaited tablet later this year, it will be more than capable and will have what some are calling a “disruptive” starting price point of $249. If this tablet is as good as folks have claimed it is, with Amazon’s existing user base I have no doubt that it will quickly become the #2 selling tablet behind the iPad. But at $249, it will never be number one.
Here’s the problem, all these different tablets are coming out and some are more worthy than others. There is the Blackberry Playbook, the Motorola XOOM, the failed HP Touchpad, the Samsung Galaxy Tab and many more but they all have one fatal flaw that has held them back from coming anywhere close to challenging Apple for tablet supremacy. Price. The bottom line is that the majority of people aren’t willing to spend $499 or $599 or even $249 on a tablet, with the exception of the iPad. That my friend is the lesson that other companies have to learn, the iPad is a unique product and even with a comparable or superior hardware you can’t match or slightly undercut iPad pricing if you want to be successful. The bottom line is that when you present the average non-technical consumer with the choice of an iPad at $499 versus any other tablet at the same or slightly lower price the majority of them will choose the iPad. Often times people make the mistake of believing that Apple has opened up the market for tablets, that my friends if a fallacy, they have opened up the market for the iPad. Confusing but true. In the same way that iPod has become synonymous with MP3 player, if companies don’t do something drastic soon then the same thing will happen with the iPad and tablet.
Once Apple optimizes manufacturing to the point where they can get the iPad down in the sub $200 range this race is over if the other companies don’t do something. While I have no doubt that IF Amazon delivers a high quality tablet at $249 then they will sell a lot of them (I’m talking millions), they just won’t sale as many as the iPad. The trouble these days is that nobody is playing to really win, in mobile and tablets everyone is essentially fighting for second and that’s no way to play. Therefore, I have concluded that the only way to really “disrupt” Apple’s iPad domination is to do something really drastic and that means a deeper price cut, I’m talking $199 at a minimum and lower if you can get there. If companies like Amazon, RIM, and Samsung want to stop playing second fiddle, they have got to step up with a compelling device and an even more compelling price that will move people to action. At $199 or below, Amazon’s tablet might actually start to give Apple some heartburn, otherwise they will never be more than 2nd. If that’s their goal then what I am saying doesn’t matter, but no company or business I know sets the goal to be #2.
Of all the players in this market, Amazon is most well positioned to heavily subsidize the cost of their device. They should tightly integrate it with their existing services for Kindle, Music, and Amazon Web Services and use that integration to drive secondary sales to make up for the loss of the heavily subsidized price. They could also do something like what they are doing with the Kindle with “Special Offers”, personally for a $199 or lower price tag I wouldn’t mind an ad or two. To change the tide of the tablet market is going to take some drastic measures, I wonder if anyone is willing to go far enough to change it?