Can Amazon disrupt the tablet market?

Posted by Trent Nouveau

Analysts at Forrester Research believe an Amazon tablet will be capable of disrupting the lucrative iPad-dominated market. 



According to Sarah Rotman Epps, if the online retailer launches its tablet at a sub-$300 price point, the company could potentially sell 3-5 million units in Q4. 

Can Amazon disrupt the tablet market?"Amazon taking on Apple is a bit like David taking on Goliath - [if you] compare the market cap, profits, and cash position of the two companies," Epps opined. 

"[However], Amazon's willingness to sell hardware at a loss combined with the strength of its brand, content, cloud infrastructure, and commerce assets makes it the only credible iPad competitor in the market."



Epps also noted that Amazon's quick ascension in the tablet market will "completely disrupt" the status quo. Although Apple is projected to retain dominant market share, Cupertino will likely prepare for war. 

"Apple sells software and services, but the lion's share of Apple's revenue still comes from hardware, which makes it vulnerable to a company, such as Amazon, that isn't seeking profit from hardware sales. Amazon and Apple's relationship, already fraught with Apple's policy changes on content sales, will become even more strained," she said.

"[Remember], Android OEMs to seek Amazon as a platform partner. [As such], we see potential for Amazon not only to launch its own hardware as an 'Amazon tablet' but also to be a platform for other OEMs, layering [its] software and services over Android to provide a richer customer experience."

Epps added that a range of "Amazon tablets" designed by various hardware manufacturers would likely be available within a year after the launch of the first device.

"A year from now, 'Amazon' will be synonymous with 'Android' on tablets, a strong second to Apple's iPad... [And] if Amazon's Android-based tablet sells in the millions, [the OS] will suddenly appear much more attractive to developers who have taken a wait-and-see approach."