Wednesday we saw Amazon release one of the most anticipate tablets of the year, the Amazon Kindle Fire. Amazon is selling the tablet for just $199, the first tablet to reach that price mark, if you dont consider the cheap Chinese made tablets which have fake brand names. Surprisingly for its price tag, the tablet offers a lot. Actually, it offers almost everything that other Android tablets offer, except a few things.
These few things would be the Android Market, Google Maps, and almost all other Google apps and services that come with any Android device. This is because Amazon never tied up with Google to get Android on its tablets. So, it doesn’t have to pay Google for every tablet sold, and even Microsoft. This means it doest have to bill its customers for the royalty it has to pay, which eventually means we get the tablets for low cost.
Then how do you think Amazon got to get the Android OS on its tablets? Well, it just took the source code and put it there. No legal issues? Not yet, may not be never. The thing is, Amazon has internally designed the user interface, the app store on the tablet, Amazon Cloud, Amazon Prime video streaming, and even the Web browser, called Amazon silk. So its not a copy-paste of the code. Hence, we get the $199 price tag.
Investors see this differently than techies. When the company is quality product for as less as 50% than its competitors, it is sure to become a hit. So they want to invest in it. Shaw Wu at Sterne Agee, an analyst, feels that Amazon will be the second big tablet player in the near future with this tablet.
“We believe Amazon has great potential to turn the tablet space into a two horse race,” Wu wrote in a note to investors Friday. That’s bad news for Research In Motion, Google, Samsung, Microsoft, Intel, Sony, Dell, Hewlett-Packard, HTC, LG, Acer, Toshiba, Lenovo, and Nokia, Wu writes.
Apple has the advantage of designing the hardware and software itself, which gives it the best match of the two for a much better integration. Amazon is figured to have the same kind of integration. Wu writes:
We believe Amazon is in a unique position being one of a two companies that has figured out how to sell a high-volume mobile device with highly integrated software and services in the Kindle.
Wu also believes that in this tablet game, Google is the company that is being hurt. He writes:
All the software that sits on top including the user interface, Appstore, Amazon Cloud, Amazon Prime video streaming, and even the Web browser, called Amazon silk, were internally developed. The exclusion of Android apps and services allows Amazon to capture these revenue opportunity greatly limits Google to make money off the Kindle fire.
If its not already clear, other companies could easily follow Amazon’s footprints and come out with the software for their tablets themselves. So, Google is clearly in trouble.