Thursday, September 29, 2011

Amazon Rides Tablet Wars Side-Saddle

Amazon's new Kindle Fire tablet v. Apple's iPad, Samsung Galaxy and virtually all others. We know Apple is winning. But, Amazon will be a big winner too, but for very different reasons.

You see, for Apple, selling the iPad is the big prize. Apple uses services (including music and movies) to sell more hardware. So do Samsung and all CE companies. That's why the price-tag for those tablets is so high. (And, of course, Apple can charge an even bigger premium because ... well ... it is Apple).

But, for Amazon it's completely reversed. Amazon is all about selling goods and services (books, music, movies and just about everything else). So, for Amazon, it's all about the store. Its new hardware -- the Kindle Fire tablet -- is simply a means to an end. The tablet is its Trojan Horse to its real prize -- mobile e-commerce. That's why Amazon can price the Kindle Fire at $199 -- hundreds less than Apple and others. Amazon is simply subsidizing its tablet side business and making up the difference (and much more) by getting us all to shop more.

So, both Amazon and Apple have their Trojan Horses. But, Amazon rides its Trojan Horse side-saddle ....