As of late, rumors have been swirling regarding a tablet PC from Internet retailing giant Amazon.com (AMZN), which has seen enormous success with its Kindle eBook reader. It now appears that Amazon's tablet is coming to life. In a major exclusive, TechCrunch's MG Siegler managed to get his hands on a prototype.
Here's what you need to know:
- The tablet is simply called "Amazon Kindle"
- It sports a 7-inch color touchscreen
- The operating system is a customized version of Android
- It is targeted to hit the market in late November at a price of $250
- Buyers receive a free subscription to Amazon Prime (which gives Amazon customers unlimited two-day shipping and free access to Instant Video)
- Google's (GOOG) Android App market is not on the device
- Instead, the new Kindle tablet will run Amazon's Android AppStore
- A 10-inch model is a possibility for Q1 2010
My immediate take is that Amazon is about to shake the Android tablet world up in a major way. While the price isn't as low as I had hoped, the Kindle tablet has a number of vital competitive advantages.
1) Like the current Kindle, it will almost certainly become permanently stuck on Amazon's home page, which should generate huge consumer interest.
According to Compete.com, Amazon is by far and away the biggest Internet shopping site, generating more traffic than the likes of eBay (EBAY), Wal-Mart (WMT), and Best Buy (BBY).
Amazon's tablet could also find its way into the stores of major retailers like Best Buy and Target (TGT), which carry the Kindle.
2) The free Amazon Prime subscription is a big bonus for buyers, because this tablet should be able to take advantage of Amazon's Instant Video service. This would eliminate the need for some consumers to pony up the bucks to pay for Netflix (NFLX) Instant streaming.
3) Amazon has an Android App store, as well as digital book, music, and video stores. So unlike competitors like Samsung, Lenovo, Asus, and LG, Amazon will see ancillary revenues from content purchases.
4) Amazon could use its WhisperNet data network (which is used to wirelessly deliver eBooks to 3G versions of the Kindle) to enable free or deeply-discounted Internet access on the Kindle tablet.
Adding It Up
Apple's iconic iPad should remain the tablet-market leader for the foreseeable future, but Amazon's Kindle Tablet should comfortably slide into second place in the fourth quarter of this year, assuming there aren't any supply constraints.
Ultimately, I see Amazon's new tablet as hugely bullish for the company, especially since it is well-positioned to hook more people into Amazon's digital-media distribution services.
Disclosure: I am long AAPL.
