More details are emerging around Amazon’s still-unconfirmed “bid” to enter the tablet fray: it plans to launch not one, but two, devices, and they will hit the market before the year is out.
According to a report in BGR, citing an unnamed source, Amazon (NSDQ: AMZN) is planning a lower-range model, codenamed “Coyote”, running on a Tegra 2 chip from NVIDIA. A second device, codenamed “Hollywood”, will be built on a quad-core, NVIDIA T30 Kal-El processor.
No word on other specifications, included operating system.
To be clear, Amazon has never officially said that it plans to launch a tablet, so these latest rumors could be merely that and nothing else. But there have been a number of signs that point in this direction — and that makes these reports all the more tempting to believe.
But how important is it for Amazon to move into tablets?
Leaving tablets out of the equation, Amazon has already had a huge impact on the mobile device market. In services, not only does it have the hugely popular Kindle reading apps (one of which was recently optimised for Google’s Android Honeycomb tablet OS), but it has launched its own app store — aptly called “appstore”, and a number of other services such as mobile payments. Notably, it has not yet officially started to stream its Amazon Prime service to tablets or mobiles. (Perhaps saving something for its own device?)
It has also periodically launched offers, mixing this content with its formidable operation selling consumer electronics: last month, it launched a promotion for those buying selected Android handsets from Amazon, to receive credits for purchases on its appstore. (Testing the waters on how best to bundle services with devices?)
Then there is its existing device business, namely in the form of the Kindle. Amazon has never publicly given figures on how many Kindles have been sold, but there have been plenty of estimates. The latest projected Kindle revenues of $5.42 billion for 2011. Others have pointed out that the new ad-supported Kindles are currently the company’s best sellers. (Testing out pricing and business models for how to sell a tablet? Can you picture a tablet with unlimited data for Amazon-only services, a la Kindle?)
Competitive pressure also plays a part. One of the company’s biggest rivals in the books business, Barnes & Noble (NYSE: BKS), has been chipping away at the tablet form factor, most recently with its update to the Nook Color, which gave the device its closest feel yet to a tablet. And if Amazon is increasingly competing with Google (NSDQ: GOOG) and Apple (NSDQ: AAPL) in the form of app stores and cloud-based media, then delivering those services over their own devices would give the company tighter control over profits and service delivery — and of course the lifecycle of the customer.
These latest rumors are not the first we’ve heard, either. In April there were murmurs that it would be built by Samsung, using a non-Honeycomb version of Android, and would out by this summer. The company’s CEO, Jeff Bezos, has been very coy on the question when asked directly, telling people to “stay tuned.”
What might hold Amazon back? Android tablets — actually, all tablets except for the Apple iPad — have had a bit of a rough ride in the market so far.
The Kindle was notable for effectively creating a e-reader market (with a hugely innovative data business model) where virtually none existed; not so for tablets.
Some blame marketing for the shortfalls, some say nothing has come along that is nearly as good as the iPad to compete. Even with everything that Amazon could bring to the table (or to the tablet as the case may be), hesitation to enter would be understandable.