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THINKS AMAZON REDEFINED A MARKET

POSTED BY DAN YOUNG

Earlier in the week, Amazon announced the release of the “Kindle Fire.” The Fire is the latest high-profile tablet device to be released this year. With the announcement, the mobile industry has been speculating on how it will do against the iPad. The answer, however, really is irrelevant.

There is no question that Apple dominates the tablet market. The iPad has a stunning 80% market share within the tablet space, a space Apple created. Looking ahead, Apple’s in a strong position to hold onto this lead for many months to come.

The reason is there are no good competitors to the iPad. Each high-profile device introduced by Motorola, RIM, HP, all failed to gain any traction. Either the OS interface was clunky, the device was a prototype rushed into production, or there were few apps. Add to this a lack of content (think iTunes) and high price points and these failures were virtually assured. Consumers who are willing to spend north of $500 for a tablet are going to head to the iPad.

Apple is winning the tablet market because they are a fantastic consumer electronics company. They have a laser-focus on building lust-worthy devices that look cool and operate with ease. Apple knows how to build and sell great gadgets.

Amazon is a content company. They excel at selling content; books, music, movies and anything else you’ve every purchased from their site. This is what they’re good at and what they are looking to expand. The Kindle Fire was released not to compete against the iPad, as many Android tablets have tried to do, but to be a conduit for consumers to access Amazon’s content.

The Fire is being sold as a media device. Granted it can check email and web browsing, however, it has been designed to be a point of sale for Amazon content. They designed this for users who want to consume information, not create it.

Amazon has taken a bold approach to the tablet market, bypassing head-to-head competition with the iPad in favor of redefining a particular segment of the mobile market. Thus the question on how the Fire will do against the iPad is irrelevant.

Amazon took a bold approach by attempting to redefine the tablet marketplace. By focusing on selling content over selling hardware, they are sidestepping competing directly with Apple and setting a new precedent and a new business model in the mobile space.