Why Amazon’s Tablet Makes Sense for Amazon

In case you missed it, Techcrunch has announced that they’ve played with Amazon’s soon to be released seven inch Kindle tablet.  Since then there’s been a lot of talk about if this tablet will really be able to compete with the iPad.  And that’s where people start missing the point.

Amazon isn’t looking to make a tablet that competes with the iPad. They’re looking to compete with something closer to Barnes and Noble’s Nook Color.  They’re also looking for something that will heavily tie into their existing content outlets like the Mp3 Store, or the Instant Video service.  A content consumption device that plugs into Amazon’s store makes perfect sense for Amazon.  And by making it a seven inch tablet that’s (rumored) to cost $250, they’re looking for heavy adoption from those that already own a Kindle or are looking to get a Kindle.

That’s why this kind of tablet makes sense for Amazon.  They want something smaller than the iPad’s 10 inch display because they want the device to be light, and easy to hold in bed or on an airplane.  They want you to throw it in your bag without worrying about space.  And they want to be the one’s that sell you the content that goes on that device. And just like Apple, Amazon wants you to buy content through them Apple does the same thing with iPad and iTunes (and the App Store and the iBook Store).

The price point is worth mentioning, at $250 it’s half of the cheapest new iPad.  At $250 it’s also around $60 more than the most expensive e-ink Kindle.  If they can bring the price down to around $199 while bring the e-ink Kindle price down as well, then they have an interesting marketing position on their hands.  But still at $250, people are going to be interested, and they’re going to reconsider that $500 iPad.  The question among non-geeks is “Do I get an iPad or a Kindle?” (and the answer to this largely depends on what you want to do).  At the rumored price point, Amazon is hoping to help make such a question easier for the general public.

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