This is the best article on what the new Amazon tablet is for from a business strategy POV:
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There are two ways to look at Amazon's new tablet, and both are accurate.
First, the new tablet is a Kindle for multimedia content. (It may even be branded as the Kindle.) If you understand the existing Kindle to be a device optimized for finding, buying and reading Kindle books, then you can understand the new tablet will be that, plus a device optimized for finding, buying and "consuming" movies, TV shows, music, full-color magazines, apps, audio books, interactive children's books and games.
Content like music and movies will be stored "in the cloud," so all your content will be available to you at all times.
Second, the new tablet will be the Amazon.com web site in tablet format. No matter what you're doing with the tablet, you'll always be one tap away from shopping on Amazon's newly redesigned-for-tablet-friendliness web site.
Amazon will use the tablet to remove barriers to you buying your groceries via Amazon, as well as clothes, gifts, gardening supplies -- whatever. Either this or a future version will have some way to scan barcodes, so you can scan a product and buy it instantly.
The new Amazon tablet is the brick-and-mortar store's worst nightmare. You’ll carry it around with you while shopping at the mall or the grocery store. When you find what you like, just whip out your Amazon tablet and buy it on the spot -- from Amazon.
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Here is why its a threat to Apple:
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Most tablets are sold to make a profit on the hardware, to "fill out" the line that hardware makers offer and fill the gap between cell phone and laptop. This is the case with the iPad, but not the Amazon tablet. Amazon may even lose money on tablet sales.
The iPad is part of a larger, comprehensive strategy for separating people from the burden of their money in many ways. In addition to hardware sales, Apple makes money from accessories, from app sales and from advertising.
But most of all, Apple intends to make money from iTunes purchases.
From Apple’s business perspective, the iPad is primarily a device for buying content from Apple. In the future, iPad users will buy, rent or subscribe to music, movies, TV shows, eBooks, audio books and more, which will be stored "in the cloud," available at all times from anywhere.
Sound familiar? This is the electronic part of Amazon's strategy.
Both companies are dabbling in multiple businesses with their tablets. But the Big Prize is the future of downloadable content. The Apple experience will be better. The Amazon experience will be cheaper. But these are the only two real players in this field.
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