Amazon has surprised the industry by announcing a new tablet out of the blue, the Kindle Fire. It’s an evolution from the e-book reader series it has been releasing and a very interesting product. We think the question is not ‘will it succeed’ but ‘how much will it succeed’.

The product itself is quite mediocre and not anything new. It lacks a lot of good features that are already in the market, like 3G, IPS high resolution display, thin form factor, most recent Android update, front facing camera etc, The price of $199 seems to reflect Amazon’s humble acknowledgement of the lack of compelling features and specs. But it has one thing that no one but Apple already has and that is the most crucial thing. That is content and in the case of tablets, content, not product is king.

A lot of tablet manufacturers are missing the fact that the device is merely a medium to deliver content and services. The phone is valuable because you can talk and text, the value of the tablet lies in multimedia content consumption and the Galaxy Tab surely misses out on this. All Android tablets don’t have nearly as much content as Apple does and Amazon is probably the only player that can offer the table stakes in content competition. Through Amazon Prime Amazon offers TV, movie, music content that is probably only second to iTunes with 19 million songs and 100,000 videos in its library.

The tablet war are not about iOS vs. Android.

It’s about iTunes vs. Amazon Prime and Android currently doesn’t have any offering that can match this. Sorry to say, without that whatever Samsung, Motorola, LG brings it will be just a novelty and loss maker. Probably Sony will be the only one to make a dent in the tablet universe but they need to get their divisions talking to each other first.

Amazon did put the price on the tablet a bit too low I’d be thinking $250 or above but the talk of the industry is that it was actually manufactured quite quickly and at a bargain cost through Quanta computers of Taiwan. It was actually Quanta’s design not Amazon’s so I’d expect better things to come from Amazon in the future. If an Amazon tablet comes within 90% the quality of an iPad2 it’s sure to sell more than 10 million in a year.

Nov 15, 2011