The iPad currently commands more than an 80% market share of the entire tablet market. It sells way more than all the other tablets combined, and beats every other tablet on both, price and user experience.
Traditionally, Apple products have always offered the best user experience, but have always been priced at a premium. With the iPad, Apple managed to not only offer the best tablet experience, but also the lowest price among all tablet manufacturers, thanks to its excellent operational efficiency. Without sacrificing margins, Apple still makes a hefty profit on each iPad, and undercuts most other players like Samsung, Motorola and HTC.
The Samsung Galaxy Tab was a moderate success, and the new Galaxy Tab 10.1 is currently mired in litigation in the U.K. and the U.S., the most important markets.
Amazon is rumored to be working on a new tablet which will be based on Android. Here’s why I think Amazon has the best chance at offering a good alternative to the iPad, and maybe even surpassing it, at least in terms of sales.
Last week, most of us had a very surprising revelation. Before HP announced that it would be discontinuing webOS smartphones and tablets, the HP TouchPad had abysmal sales. More than 90% of the limited TouchPad inventory was lying untouched. But then, it slashed the price of the HP TouchPad to $99 in the most popular fire sale of the year.
What followed was not entirely unexpected, but it did give us a lot of insight into what consumers really want. In less than a day, almost all the available HP TouchPads were sold out as consumers flocked to buy them for $99. I wanted to buy one too, but ran out of luck.
Amazon is expected to launch its tablet at a much lower price than the current crop of tablets. After the Kindle experience, Amazon knows that it stands to make the most money by selling its tablet to consumers at or slightly above cost, and then making money on digital content like ebooks, movies, videos, music etc. It is apparently working on two tablets currently, both of which will undercut the iPad.
Consumers now expect an entire ecosystem with their devices. After Apple, Amazon is possibly best equipped to provide them with one. An Amazon tablet would come integrated with various Amazon services like the Kindle store, Amazon Appstore, Amazon’s Cloud Drive, Music Store, Amazon Instant Video etc.
Most of the other Android tablet manufacturers cannot provide the kind of ecosystem that Amazon can. They also make money from hardware sales, so they cannot undercut the iPad without taking a hit.
This is why Amazon has the best chance at capturing a large portion of the tablet market.
I’m definitely buying an Amazon tablet, are you?