The upcoming Android tablet from Amazon is probably the tech world's least well-kept secret, right up with the "rumored Apple tablet" of early 2010. But the Apple rumors resolved into the iPad, easily the most popular electronic gadget ever. Will Amazon's upcoming tablets follow?
The game plan: Build 'em cheap
At least, that's what Techcrunch writer MG Siegler surmised, when he guessed that the Amazon tablet might cost "Like $299 or less cheap." This supposition was based on two things.
First, the report from the Wall Street journal says that the upcoming tablet will be built and designed outside Amazon. Apparently, this means cheap hardware design. I'd question that, though, because Amazon's Kindle e-readers have pretty good build quality.
And second, it also says that the tablet will lack a camera. This, to me, screams "cheap." Here's why:
The mark of a premium product
Look around at the tablet market, such as it is. Everything has a camera. Even the Asus Transformer, the most value-priced of the full "tablet" tablets at $399, comes with front- and rear-facing cameras.
Just like all laptops have webcams (except for super low-end budget models, like the cheapest Compaq Presarios), it's taken for granted that all tablets have cameras. Except for, again, the very cheapest. Archos' upcoming $349 tablet, for instance, foregos the rear-facing camera, while the $249 Nook Color doesn't have a camera at all.
Siegler doesn't think that the Amazon tablet will dip that low in price. He notes, correctly, that even Apple -- the king of app stores and online music sales -- primarily uses its store services to sell hardware, and has sky-high hardware margins.
The correct place to look for inspiration, though, isn't Apple and the iPad. It's Barnes and Noble and the Nook Color. Or even, dare I say it, Amazon and its Kindle. Ebook readers cost drastically less than devices we think of as "tablets," partly because they lack features like cameras and partly because they're probably sold at or near cost.
How to make money selling non-physical products
If this is the case, it's because ebooks enjoy a unique status as premium-priced digital goods. A single ebook can cost almost as much as an iTunes album, but take up dramatically less space on a memory card or a server; pretty much all it is plain text and a cover illustration. This keeps margins low, and since ebooks aren't priced that much below the cost of physical books the price is sky-high comparatively.
In that case, an Amazon tablet won't exist primarily as a luxury good in itself. It'll be a vehicle to buy books from the world's biggest bookstore; an even bigger name than Barnes and Noble. Like with the Nook Color, it'll run apps and have a web browser and things, but it'll also have access to Amazon's music and movie stores.
I don't have any insider information, but taking all this into account I'd personally be surprised if it cost much over $300. Especially considering Amazon's last resort: Putting optional ads on your tablet, the way it did for its black and white e-readers.
Jared Spurbeck is an open-source software enthusiast, who uses an Android phone and an Ubuntu laptop PC. He has been writing about technology and electronics since 2008.
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