July 26, 2011 at 2:52 PM ET
Amazon has become an electronics and digital services giant, with enough product savvy, customer leverage and brand power to do battle with Apple itself. The tablet war begins in earnest when Amazon introduces an Android-powered Kindle — hopefully this fall.
Yesterday, I wrote about five things the Android tablet camp is missing in its fight against the iPad, a fight it appears to be losing pretty badly. I mentioned that things could change when Amazon's tablet is in the mix. Here's specifically what Amazon brings to the fight:
A blurred line between products and services
The benefit Apple brings with its hardware is a full software and services ecosystem that nearly every user participates in. It's true, almost all iDevices are registered to an iTunes account with a credit card attached. By definition, the same goes for Amazon's Kindle. This indicates both a seamless interaction between hardware and software, and a healthy revenue stream that justifies not only aggressive pricing but the pursuit of bigger and better engagement. Plot the course of iTunes over a decade, then look at Amazon's own evolution in digital media. A tablet will only propel the online retailer further.
Google, meanwhile, is a major service provider, but you don't need to buy a Google-powered hardware product to use Gmail or Google Maps. Likewise, most users of Google services don't pay Google a penny; the healthy revenues come from advertising. This creates a bit of a roadblock when it comes to paying for premium media. How many of us use YouTube daily? Now, how many of us have ever rented a movie from it — or knew you could?
The tablets running Google's Android are built and marketed by companies with their own interests and goals. Samsung, for instance, has its own media hub, one that competes with Google's. Amazon's tablet may run Android, but it will likely deliver a very focused experience — around Amazon services, not Google's.
Affluent users seeking simple, guaranteed experiences
There's no doubt that anyone buying any tablet right now is among the well-heeled. If you're strapped for cash and need a simple computing device, there are $300 laptops that do more of the conventional PC thing. But among tablets, Android tabs appeal to power users, those who understand the context — and freedom — of the Android OS. It's a tough sell, especially when prices are all equal.
People with $500 in their pocket and a little experience with iTunes can more quickly grasp what the iPad does. Many of these same target customers own Kindles now, and will strongly consider a hop to a Kindle tablet. They may have an Android phone, but their relationship to Motorola or Samsung is not direct, and is certainly not one of mutual devotion. In a recent survey by Retrevo.com, Amazon was the non-Apple tablet "manufacturer" most preferred by respondents, by a wide margin — even though it has no tablet.
An uncomplicated retail experience
Part of the reason that Android phone sales don't translate to Android tablet sales is that phone companies — not Google or the hardware brands — are the key marketers of Android phones. Tablets, at the moment, are sold more like computers and portable media players, and neither Google nor most of its hardware partners have a big advantage there.
Companies such as Samsung, with healthy relationships with the likes of Best Buy and Walmart, have a leg up, but the best positioned are, of course, the companies that control their own retail experiences. Apple is the easy example, but the better one may be Barnes & Noble.
The Nook Color, in its half-year existence, has arguably become the most successful Android tablet on the market, sold without the blessing of Google (or its Android Market). People don't necessarily even know it is an Android tablet. B&N has many of the attributes discussed above, but chief among them is a very clear retail experience, that capitalizes on the familiarity shoppers already have with the brand and all that comes with it.
Amazon doesn't have a bunch of shops around the country where people can go, test stuff out and even get free Wi-Fi and book samples. But it does have near omnipresence in Web retail, including its own Android app store, and it's been known to partner with Starbucks and others from time to time. However Amazon chooses to launch the Kindle tablet, it will have a clear value and a clear target — which would be a first for a full-fledged Android tablet.
More on Amazon tablets and e-books from msnbc.com: