Have Amazon priced other Android manufacturers out of the tablet market?

[Top100EbooksRank]

Amazon: break-even on hardware is okay

Samsung + Acer + others: We are a hard-ware company so We need to make money on hardware.

The exception might be Google Nexus line. But I see trouble ahead for Samsung/Acer/etc...in the tablet market.

[shanghaichica]

Those other android tablets offer more functionality than the fire.

[fjtorres]

Short answer: No, they merely pose a tough question: how serious are you about android tablets? And the main target of the question is Google itself.

Long answer: Some hardware-only companies will be squeezed out but others, the bigger and better-run ones, can find ways of trimming their cost structure (or beefing up their products' value proposition) to stay in the game. Others will stay because they see android tablets as a necessary complement to their smartphone business. Even if it is a small loss-leader operation.

Some, though, can afford to take Amazon on, head to head.
Samsung, for example, makes their own CPUS, memory and displays and can "sell" them to themselves at cost, if need be. Amazon will aways have to pay a marked-up component price. And since competing does not mean price-matching there will still be room for "some" profit for vendors willing to sell at slightly higher than FIRE prices.

The real challenge is in the upfront design costs that need to be defrayed over volume. If Amazon grows their 22% share even slightly, say to 25-30%, by attacking price-conscious buyers, that leaves the "premium-price" market for the hardware-only vendors. Premium priced models are expected to be feature-rich, which adds to costs, and the market volume will be smaller than the value shoppers Amazon is appealing to so that path will squeeze profits, too.
Worse, taking Android tablets into premium territory puts them squarely against Apple, Microsoft, and those same vendors' Windows tablets.

So, no; they won't *all* be squeezed out--particularly the ones with strong phone businesses--but a lot of mid-range vendors will be forced out and will have to try their luck with Windows RT and its very different value proposition. Which puts Google on the spot.

Hence, I suspect that the company that Amazon most seriously annoyed this week is Google, not Apple.

First, because they bought Motorola primarily for their patents. (They're already trying to shop around their cable STB business--good luck getting value for it, though.)

Second, Motorola was available because they were having problems with their cost structure--witness the layoffs. Building Nexus has been seen by some as a way to strengthen Motorola's phone side for a sale of the rest of the hardware business. Amazon's pressure on the generic vendors might now force them to *keep* Motorola--blowing their existing Android model out of the water--or "fire-sale" it to keep their credibility with the hardware vendors. Either way, they lose.

Third, Google is in the Android business as an ads and services play: every KF Amazon sells is a slice of that business that doesn't go to Google. And worse, they are eating away at their business with Google's own tech. (Now they know how Jobs felt about Android.)

Fourth, Amazon's forking and de-emphasis of Android in their marketting point the way for other players willing and able to imitate Amazon. Or at a minimum to partner with service providers (Rakuten must be feeling real good) that can chip in some kickbacks.

Fifth, at least some of the vendors will look at the Android ecosystem as a whole and decide that Windows RT with its Bundled-in MS apps makes more sense if they need to move up-market. Especially when the whole IP dark cloud and patent royalties are factored-in. It won't be a stampede but it will cut Android's momentum.

Sixth, the bigger Amazon gets *within* the Android world, the less control Google has. I strongly suspect Android 6.x will not be anywhere as freely licensed as current versions. Major fork ahead. At a minimum they need to create a value-add package beyond Play to counter Amazon's ecosystem and license it separately.

All-in-all, it is going to be e-x-p-e-n-s-i-v-e to keep up with Amazon and Google is going to have to bear the brunt of the software and services costs if they intend to keep Android a *unified* multi-vendor tablet platform.

In other words, to prevent the decimation of Android tablet vendors Top100 expects, Google is going to have to subsidize them instead of milking them.

Tough choices ahead in android tablet-land.

[Stormchild]

There are plenty of better spec, bigger screened tablets from China etc that are half the price. Just check Amazon to see. My Daughter now has 3 in her family and they are just fine.

[Andrew H.]

Originally Posted by Stormchild

There are plenty of better spec, bigger screened tablets from China etc that are half the price. Just check Amazon to see. My Daughter now has 3 in her family and they are just fine.

No there aren't; that's ridiculous.

[Edward M. Grant]

Originally Posted by fjtorres

Worse, taking Android tablets into premium territory puts them squarely against Apple, Microsoft, and those same vendors' Windows tablets.

Surely you mean taking -- currently non-existent -- Windows tablets into premium territory puts them squarely against Apple and Android? There are a number of of Android tablets in a similar price range to iPads; I'm pretty happy with my 'premium' Transformer and have no desire to swap it for an iPad, Kindle Fire, cheap Chinese tablet or Windows.

Windows' selling point has always been that it's cheap, so trying to compete with Apple would seem brave. But Android can be cheaper, so it will probably continue to own the low end of the market unless Microsoft start paying tablet manufacturers to ship Windows versions at less than cost price.

[ucfgrad93]

I think that Amazon has put the hurt on 7" tablet makers. For $250 you can get a 32GB Fire HD. Amazon's ecosystem is better than Google Play for books, movies, TV shows. Google Play has more apps and obviously will have Jelly Bean and get updates. But for most users, ie. people who don't hang out on websites like us, that isn't a big deal.

[teh603]

Originally Posted by Edward M. Grant

Windows' selling point has always been that it's cheap, so trying to compete with Apple would seem brave. But Android can be cheaper, so it will probably continue to own the low end of the market unless Microsoft start paying tablet manufacturers to ship Windows versions at less than cost price.

Windows is cheap? An OEM copy of the OS costs about $100 when purchased with suitable components to make a computer. A boxed copy is between $200 and $300. Both prices are as of Windows 7, at a discounter in town. If you were to buy the same computer whiteboxed, you'd save at least the $100 of the OEM copy, and possibly more for all the other bloatware that the manufacturer installs.

That's why some of us in the Free Software community refer to bundled copies of windows as the "Microsoft Tax."

[Stormchild]

Originally Posted by Andrew H.

No there aren't; that's ridiculous.

I must remember to tell her they are a figment of her imagination then. Must be the beer.

[Edward M. Grant]

Originally Posted by teh603

Windows is cheap? An OEM copy of the OS costs about $100 when purchased with suitable components to make a computer. A boxed copy is between $200 and $300.

Last time my employer bought a Sun workstation for me it cost about $25,000. Last time I bought a laptop I looked at the equivalent Mac laptop and it was two and half times the price of the Windows version.

And real OEMs, I believe, actually make money from putting Windows on computers because Microsoft only charge them a few dollars and third parties pay them to load it up with their crapware (and Microsoft then complain because the crapware makes them take forever to boot).

[fjtorres]

Originally Posted by Edward M. Grant

And real OEMs, I believe, actually make money from putting Windows on computers because Microsoft only charge them a few dollars and third parties pay them to load it up with their crapware (and Microsoft then complain because the crapware makes them take forever to boot).

Microsoft then takes on most of the device driver and OS support issues for the consumer. Which the OEM would then have to do themselves.
A decade ago, Dell sold a line of PCs with Windows or with Linux. They soon found out that the added support costs for the free OS were higher than what MS charged them. Once they adjusted prices to reflect that, they ended up charging the same for both.

Contrary what some woud like to believe, Microsoft bundles a lot of service and support with their OS licenses (including IP protection for the OEM, which Google does not provide). They are hardly leeches.

[Andrew H.]

Originally Posted by Stormchild

I must remember to tell her they are a figment of her imagination then. Must be the beer.

Prove it. Post specs.

The whole reason that the KF (or the Nexus, for that matter) are such a big deal in the tech world is because they are highly specced and cheap. That's why it's has been dominating tech blogs.

So if you are going to make an outrageous claim like that, you should provide the proof.

[teh603]

Originally Posted by Edward M. Grant

Last time my employer bought a Sun workstation for me it cost about $25,000. Last time I bought a laptop I looked at the equivalent Mac laptop and it was two and half times the price of the Windows version.

I wasn't advocating Macs; I was advocating that all computers should be sold whiteboxed and the consumer allowed to choose which OS they want to run. If they grab the copy of Windows, that's fine and dandy. They made the choice. But if they want to put a copy of Linux or BSD on it, or even code their own OS from scratch as part of a computer science project; then they should be able to make the choice to do it without having to pay for a copy of Windows they aren't going to use.

Apple has its own freedom-related issues and I'm not going to touch them in this thread.

And real OEMs, I believe, actually make money from putting Windows on computers because Microsoft only charge them a few dollars and third parties pay them to load it up with their crapware (and Microsoft then complain because the crapware makes them take forever to boot).

That explains some of the complaints I've gotten from MS-certified tech folks. But in that case, shouldn't MS be putting a little pressure on the OEMs to have less boat?

[fjtorres]

Originally Posted by teh603

That explains some of the complaints I've gotten from MS-certified tech folks. But in that case, shouldn't MS be putting a little pressure on the OEMs to have less boat?

They are. Mostly in private.
One of the ways is called Microsoft Surface.
("*This* is how Windows behaves when the OEM doesn't screw it up.")

[Stormchild]

Originally Posted by Andrew H.

Prove it. Post specs.

The whole reason that the KF (or the Nexus, for that matter) are such a big deal in the tech world is because they are highly specced and cheap. That's why it's has been dominating tech blogs.

So if you are going to make an outrageous claim like that, you should provide the proof.

http://www.amazon.co.uk/Superslim-Mu...7183556&sr=8-7

Try that one just for starters. If you want any more proof, try looking for yourself. Ebay is even better.