Amazon Can Best Apple If the Price is Right

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With rumors mounting daily of an Amazon tablet set for a fall release, a low-priced device could be the catalyst the Android tablet market needs to boost sales and compete against the iPad. 

It is no surprise that Apple dominates the tabletsphere, selling between 30 million and 40 million iPads since the release of the device more than a year ago. Since then other well-known brands, such as HP, Samsung and Motorola, have produced their own tablets, in attempts to challenge the market’s golden child. However, it appears consumers don’t want a replica of the iPad if it costs the same amount as the Apple branded device, as HP recently learned.

If the Price is Right 
Yet, it looks like customers would be willing to hop off the Steve Jobs bandwagon if they were offered a similar product for a lower-price, according to a recent Retrevo Pulse study, and backed up by the recent consumer rush on $99 TouchPads during this weekend’s HP firesale. In this report, Retrevo found that 48 percent of respondents would consider buying an Android tablet that costs less than $300 with similar features over a base model iPad, which costs $499.

 

“Price matters a lot for a competitive tablet,” said Andrew Eisner, director of community and content at Retrevo. “It looks like consumers are ready to embrace that $400 or $300 price point for a tablet with features similar to the iPad.” 

Despite this stray from Apple, potential tablet owners still covet a brand that proves reliable and successful, evident in the 55 percent of respondents who chose Amazon over HP, Dell and other companies, for a manufacturer from which they would consider buying a tablet. With the success of its Kindle, Amazon has garnered a reputation for delivering great service and products. This status, in addition to the company’s existing relationships with book publishers, music labels and movie studios, could pose a threat to Apple, being a supplier of both content and hardware. As Apple prepares itself for the fall release of its iCloud, Amazon already has its cloud services available to users and for a cheaper price than what the Cupertino-based company plans to charge customers.

“Like we’ve always said, software sells hardware and content sells tablets,” said Eisner. “I think that gives Amazon a big advantage to have the media that runs on the tablet available to the distributors.” 

Amazonian Android
Amazon is likely to produce a tablet that runs an Android operating platform, in a similar fashion to Barnes & Noble’s NOOK Color. The NOOK Color, which retails for $249, also has the backing of contacts from Barnes & Noble’s relationship with book publishers, however Amazon’s extensive movie and music collection could offer consumers more of a selection. While the Amazon tablet may have a similar build as the NOOK Color, it must also feature the same style higher-end tablets, like the iPad, offer if it wants to compete.

“The tablet is a type of device that I think more people want than need,” said Eisner. “If you start to compromise on features of style, you should just let Apple keep the business.” 

However, with 48 percent of those surveyed claiming low price as the most important feature in the tablets they buy, Amazon could possibly blow open the market if the company produces a lower-margin model. But the online retailer must be careful when choosing what to cut, as consumers are less willing to compromise the style of their slate for a cheaper model. As tablet users have come to accept the swipe gesture almost as much as the scrolling motion, Amazon must make sure it incorporates this feature, as well as gyroscopes, accelerometers, high pixel density and a powerful processor, if the company plans to make a dent in the market with a lower-cost device. 

With new reports suggesting Apple holds 61 percent of the market share, the company’s dominance in the tablet world continues to grow. Yet, as it appears, with a low cost tablet, Amazon could be the best contender the iPad maker will face. Now the only question that still lingers is: will Amazon deliver a competitive tablet, without compromising core components? 

“Can Amazon do it and is Amazon Android’s great hope,” asked Eisner. “It will be interesting to see how that all plays out.” 

So what do you think, can Amazon compete with Apple or is the iPad destined to remain the cool kid on the block? 

Source: Retrevo 

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