Eyes Of Tablet World Are On Amazon's Price Point

It may be a tad premature to call the seven-inch device that Amazon reportedly is poised to introduce on Wednesday as the "final" competitor to Apple in the so-far lopsided tablet wars -- as David Streitfeld does in the New York Times this morning, but he says consumers no doubt will be cheered by its price, which is expected to be about $250 (or around half that of the cheapest iPad).

Computerworld's "IT Blogwatch" blogger Richi Jennings says the "effective price" could be $171 because Amazon is reportedly throwing in membership in its Amazon Prime service.

Barclays analyst Anthony DiClemente tells Streitfeld: "The fact that Amazon is making such a huge investment might make Apple come back into the market at a lower price point. What's to prevent them from slimming down the iPad?" Well, perhaps the fact that Steve Jobs is on the record as saying Apple "would never make a device that size 'because we think the screen is too small to express the software.'"

The competition between the two juggernauts is "asymmetrical," as Streitfeld points out. "Apple sells movies, music and books in order to sell devices. Amazon sells devices in order to sell books, movies and music. Apple has never faced an opponent with such a vastly different strategy."

One thing the two companies have in common is a penchant for secrecy. Not too many details have leaked out about the tabletized Kindle since TechCrunch's MG Siegler wrote earlier this month that he had played with the Android-running, full-color, back-lit device and reported that it would appropriate the name Kindle. But we do know that Amazon has scheduled a press conference in New York on Wednesday; Nick Bilton has a copy of the invitation here.

"The key for Amazon is just how deeply integrated all of their services are," Siegler points out. "Amazon's content store is always just one click away. The book reader is a Kindle app (which looks similar to how it does on Android and iOS now). The music player is Amazon's Cloud Player. The movie player is Amazon's Instant Video player. The app store is Amazon's Android Appstore."

PCWorld's Tony Bradley writes that although Apple should retain its dominance, the Kindle tablet could "shake up the industry" and "start a new era that beckons a major slugfest between not just Amazon and Apple, but also with other big players like Samsung and Motorola."

"It's a marketing tool to build a relationship with customers and sell them cloud (computing) services," Forrester Research analyst James McQuivey tells Reuters.

A Forrester report says that the Amazon tablet will "completely disrupt the status quo" and could sell between 3 million and 5 million units by January. Analyst Sarah Rottman Epps points to Amazon's "willingness to sell hardware at a loss combined with the strength of its brand, content, cloud infrastructure, and commerce assets."

The device also poses a threat to Barnes & Noble's NookColor device, McQuivey points out. There are rumors this morning that B&N is itself readying "a pricier, more feature-rich gadget [that is] likely to look and feel more like a tablet than a traditional e-reader," as Mike Luttrell re-reports in TG Daily

Meanwhile, remember that other tech company on the West Coast? Microsoft? Well, Gartner Research says it will have about 10% of the tablet market by 2015, with the iPad still commanding a 46% share, tablets running Google Android reaching 36% and Research in Motion's QNX operating system powering 8%, the Seattle PI reports

Apple has indeed effortlessly knocked away all comers so far, despite some folks' speculation that HP and Palm's WebOS tablet, as one example, could blow away the iPad. HP summarily pulled the plug on that venture last month, as we know. Can anyone out-Apple Apple? Hey, in a world where physicists have discovered particles that move faster than the speed of light, anything's obviously possible.

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