After HP (rightly) nuked webOS, HP’s TouchPad tablet suddenly started selling like hotcakes because they were heavily marked down to $100. And that shows how to compete with the iPad: price. And who wants to be a tablet player and is very good at competing on price? Amazon.
Clearly, no one is able to build a tablet that’s as good as the iPad and price-competitive. But, clearly, there is still a huge market for a cheap, OK tablet.
TechCrunch’s Michael Arrington, who knows this from having tried to build his own tablet, writes that it would be possible to build a cheap tablet at a cost of $200, and says HP should do just that, and sell it at cost.
But it would make even more sense for Amazon to do that. They badly want a tablet. Selling things at cost, or even at a loss, is nothing new for them. And they have a huge global distribution platform (i.e., their website), which should also lower costs.
Such a cheap tablet would probably not run a lot of applications, but that’s fine since no one but iOS has good third-party tablet applications. It would mostly be used to surf the web and stream media. Using the web is already most of what we do on tablets, and only moreso going forward, and selling media is the reason why Amazon is in the tablet space to begin with.
As Arrington rightly notes, once you flood the market with super-cheap tablets, they would quickly give rise to their own developer ecosystem. (And Amazon also has its Android app store. Or it could just buy the burnt-out husk of webOS and go with that.)
Previously: Why The Amazon Tablet Will Be Killer →