One of the new facts of business life in an Internet context is that contestants sometimes can “give away” what other firms sell as their primary revenue model. That might well be true as Amazon gears up to launch its own tablet device.
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, says Forrester Research analyst Sarah Rotman Epps. ” If Amazon launches a tablet at a sub-$300 price point – assuming it has enough supply to meet demand – we see Amazon selling three million to five million tablets in in the fourth quarter alone.”
“Amazon’s quick ascension in the tablet market will completely disrupt the status quo,” says Rotman Epps. Apple will retain dominant market share, but Apple could be vulnerable. Amazon uses hardware to sell content; Apple uses content to sell hardware. And few firms other than Amazon have extensive content assets that can be brought to its ecosystem.