back to article Amazon is best hope of a viable alternative to iPad

Apple's iPad 2 went on sale last Friday, with few doubting that it would be a strong seller, since it has very few competitors. But, while there are the usual near-hysterical unit forecasts from bullish Apple fans, there are serious questions for the broader market. In the glut that is likely to appear as scores of vendors chase …

COMMENTS

This topic is closed for new posts.
  1. Anonymous Coward
    Grenade

    Title

    So.... your answer to Apple's 30% cut is to have another company implement.... a different 30% cut. Brilliant!

    1. Anonymous Coward
      Anonymous Coward

      Leave people the 30% and they will spend it anyway

      I thought the 30% suggestion was pretty silly. The big advantage Amazon have is that they have plenty of stuff to sell already that you don't need specific hardware to buy and use. So enforcing a mafia style cut of other people's business is less of a priority. They could just completely block their direct competitors from the device (perhaps using automatically updated blocklists?) If you were getting the thing at cost price you could hardly complain about that. Natural human laziness would do the rest and funnel business to Amazon.

    2. juice

      The joys of a free market

      @Buck: when there's two products with comparable features on the market, the need to compete tends to drive pricing down. Or at least that's the capitalist theory...

      Anyhow: I wouldn't have thought it'd be that difficult for Amazon to bring out a tablet at a lower cost point than the iPad. To pick up the story from a previous Reg discussion: I recently picked up a ZX 180 v2 from Ebay. 10" screen, 512 mb ram, 4gb internal storage, 10" screen. £130, off Ebay, from a UK seller.

      It's far from a perfect solution; it has a resistive touchscreen, the build quality is definitely towards the cheap end of the scale and it appears to have no power saving features built in: if you don't physically switch it off after use, the battery'll drain flat in about two hours, even with wifi and the screen turned off. And while it's generally responsive, the virtual keyboard is quite sluggish (though to be fair, having tested the Advent Vega in Dixon's, that suffers from a similar issue, so I suspect it's Android's keyboard sub-system rather than the tablet's hardware)

      But. It works well enough, and it's a lot more flexible than an iPad. Out of the box, it plays video in a variety of formats (all the way up to 1080p) without any issues - and it's got a HDMI output. It's hooked up to the Android market. I can plug a USB thumbdrive or keyboard into it - and I can throw an extra 32gb of micro-SD goodness into it for around £25 (Ebay, UK sellers), unlike the iPad, where the only way to upgrade is to sell your old unit and buy a new one. It even has a 3G modem built into it - though admittedly, it's designed for use with a Chinese network, so is of no use in the UK,

      All told, it seems feasible for Amazon (armed with their economies of scale and a healthy R&D budget) to punt something similar out at around £199, with the extra money going towards better build quality, a capacitive screen and a longer battery life...

      1. SuccessCase
        Thumb Up

        Cool

        You're really selling it to me there Juice. And there I was thinking the attraction of a post-PC device was all about the perfection of the user experience.

  2. Lewis Mettler
    Stop

    Amazon best hope for consumers too

    Amazon (and Google) are the targets for Apple's illegal subscription policy.

    Yes, it is illegal to control both the wholesale and retail price in just about any channel for any product. Simply put it eliminates competition. And that is bad for all consuumers.

    Apple can charge a 30% markup if it wants to. But, attempting to restrict access to the Apple customers or permit Apple to control the retail price for products or services available through other sources is illegal.

    And there is no doubt that Amazon (among others) will bring this illegal practice to a halt.

    If Apple insists upon a 30% cut it will have significant price competition from Amazon and Google among others. And that is why it has to try to illegally control the retail price for products and services elsewhere.

    Apple must deceive its own customers into thinking that they can get the best price from Apple. And that is only the case when Apple engages in illegal practices.

    There is not a retailer anywhere in the world that would not like to control the retail price for products and services offered by its competitors. But, it is illegal to do so.

    Attempting to block access to Apple customers in order to get that illegal control is very harmful to Apple customers too. Either they do not get convenient access to key products and services or they pay a much higher price. And the higher price applies to all customers not just those who are foolish enough to buy from Apple. Apples insists upon rasing the pricefor all customers.

    Apple is the consumer's worse nightmare.

    Apple knows it can not clear that 30% cut unless it engages in illegal conduct. Apple lawyers know that as well. Apple customers are not smart enough to know it. At least not yet.

    1. sleepy

      Apple doesn't control retail price

      If it's illegal then it'll be stopped, won't it, so there's nothing to worry about. But I don't think it is. Apple just want to prevent balkanisation of their user experience.

      You can sell for whatever price you like through Apple, right down to zero. Apple charges 30% for their distribution, and that's that. Anyone who doesn't like it can deliver content and apps via the browser or via the PC/itunes (audio/video/books) and keep Apple out of it entirely. But if you want to use the proprietary app format, proprietary store, and, you have to offer not only the app but all additional proprietary content to the customer on the same terms as elsewhere. It has to be this way, because otherwise the customer experience will crumble away into the ghastly mess we see everywhere else.

      Apple is not (yet) the consumer's worst nightmare. On the contrary, they have made themselves intermediaries between the individual and the greed and power of big business and thereby improved the consumer experience enormously. Yes, they have milked fantastic profits out of it, but that just shows that big business isn't offering what the consumer wants. Especially the mobile carriers.

      There is no such species as "Apple customers". Every purchase of an Apple product is voluntary, and Apple products have very strong resale values, so it's easy to switch away.

      So far, Apple has been consistent in supporting open standards, plus a proprietary platform. What they are doing is necessary to avoid a re-run of the Wintel era. What's missing is a viable competitor.

      1. Jon 52

        distribution

        My only problem is that it gives companies no control over distribution costs.

        30% is not a trivial amount, if it is essentially free to sell on my own website but 30% in iStore, I am forced to overprice my items on my own website, just so they are not cheaper.

        1. Ammaross Danan
          Big Brother

          @Jon52: You forgot one key component

          "30% is not a trivial amount, if it is essentially free to sell on my own website but 30% in iStore, I am forced to overprice my items on my own website, just so they are not cheaper."

          Don't forget that most of these subscription services are direct competitors to iTunes, The Daily, and iBooks. Therefore, your now-increased price is easily matched or undercut by Apple. You'll have to inherently have a weaker business (be it in less margin, or decreased sales) just to "compete," and likely losing out to Apple in the long run.

        2. Lewis Mettler
          Stop

          absolutely

          And being forced to sell for the same high price as Apple can cut you out of the market completely.

          Suppliers need to be able to use all channels of distribution and not be restricted by being overpriced.

          It is fair it set a fixed wholesale price that applies to all distributors. It is even fair to offer some volume discounts. But, fixing the markup at 30% and mandating the retail price everywhere else is eomething that no supplier should be able to control. With or without an agreement with a retailer or distributor.

          Apple and a supplier coming to such an agreement is price fixing. Amazon and a supplier coming to an agreement is also price fixing.

          Even the Apple agreement does not say that the same service an cost more elsewhere. It only mandates it can not cost less. But, what if you have two distributors with the same agreement and one insists upon a higher markup? Say 40% cut instead of 30%? How can any supplier comply with those terms? The answer is that it must sell cheaper at wholesale to one verdor than the other. And that is illegal. And it harms consumers.

          What if some company comes along and begins to sell music tracks. And they want a 50% cut? What if they require the suppliers of the media to sign a deal similar to that of Apple?

          Does that mean that Apple must raise the price of tunes on iTunes? Maybe so. Do you think Apple might compain? Then Apple is required to sell its tracks at higher prices too?

          What if someone wants a 60% cut? Then what? How much are consumers going to pay then? When they buy at iTunes? When they buy at the other stores? Everybody has to pay the highest price charged by any channel. And who is going to set the highest price? Why, it is the supplier that demands the highest cut.

          And who would that be? Not the one that comes onto the market the following week and wants even more profit and does not want to see any price competition.

          If the markup is reasonable it almost works. If Amazon has a low markup they can do business without causing all price to go up. But, Apple demands 30% off the top. And many in the business have already gone on record as saying they can not do business at those costs. They can not be competitive at those costs. And I will bet you that Apple would say the same if it had to cover a 30% cut off the top for their tunes, right?

      2. Anonymous Coward
        WTF?

        Eh?

        "What they are doing is necessary to avoid a re-run of the Wintel era."

        Eh?

        That's a crap analogy.

        The Windows bit.

        Windows pretty much allowed anyone to write software for it and took no cut. Granted you could choose to use MS products to make it easier, but not compulsory.

        Intel bit.

        Oh you mean the bit where AMD and VIA made proccesors that could work and Man + dog could make a board, memory or any other add on work with it.

        Nope struggling to see how a fully closed platform including aftersales is the same.

        Ahh got it, all used shit loads of marketing bullshit to pretend theirs is the best product.

        Oh BTW

        AppleTel should be the new one, after all when was the last Apple (legally) running AMD processor on a gigbyte mainboard?

    2. Big_Ted
      Jobs Halo

      ok.....................................

      Whilst I agree with the basics of your post I must point out that Apple are not controlling the price at all.

      They are in fact saying they want 30% of "whatever" you charge.

      Its up to the ap creator to set the price themselves.

      They are now saying that any ap the sells content must have that content available only through the ap store. That is where I agree its wrong. But again they are not saying what the price is but that it must be the same as on the content providers site, to me this is a way to ensure Apple customers are not ripped off paying more for the use of it on their idDevice.

      They should instead insist that any ap that sells content must be sold for a fixed minimum and that they get 30% of that.

      After all content providers have a choice of staying or not......

      1. Jon 52

        Apple dictate any price.

        "But again they are not saying what the price is but that it must be the same as on the content providers site, to me this is a way to ensure Apple customers are not ripped off paying more for the use of it on their idDevice."

        But that means that non-iDevice people need ripping off. If companyA needs to sell its thing at £7 to make profit, they would have to sell it for £10 on iStore. But could afford to sell it for £7 on their own website. Now they have to charge evreyone £10.

      2. Lewis Mettler
        Stop

        Apple is dictating the price

        It may be true that the supplier can set the absolute price for a subscription or product, but Apple is demanding the right to force that supplier to not sell the same services for less anywhere else. And that controls the retail price elsewhere.

        Do you think a retailer like Walmart would not love to have some power and control over suppliers?

        You bet. Every single retailer would want that control. They then know that no one can compete with them on price and they can quantee their markup at the same time. Retailers would all love that. And they would all try to implement it.

        If it were legal that is.

        But, it is not legal.

        Not even a supplier like SONY can control the retail price offered by retailers. Why do you think their is such a thing as the MSRP? Manufactor's Suggested Retail Price? Because it is illegal for a supplier to control the retail price for a product. ILLEGAL. And if the supplier can not do so neither can some idiots at the retail level do so for themselves and for every other channel.

        Allowing the actual price to be set by the supplier is meaningless. Forcing all suppliers to cover Apple's 30% and force everyone else to also charge the same high price is clearly illegal.

        And it absolutely is against the better interest of all consumers. Apple customers. And everyone else.

        Everyone is being harmed by the illegal Apple policy. All of them.

        Any product that sells through Apple that way will cost more for all consumers even if they deal with the supplier direcly. So not only are Apple customes pay a higher price, but everyone else does as well regardless of where they buy or subscribe.

        The Apple idiots do not want to have price competition. So stupidly they just force vendors to avoid price competition or be excluded from Apple customers. All consumers are being screwed here by Apple.

        Direcly by Apple if you buy through them. And by those suppliers that deal with Apple even if you buy directly from them.

        Apple can insist upon a 30% markup if it wants. Walmart sets it retail price as it desires. So does Amazon. So does every other retailer. But, they can not legally control the price of the same product sold through other channels. And that protects ALL CONSUMERS.

        Does not Walmart compete with Tower? Does not Macy's compete with Walmart?

        What if Macy's or some other high priced outlet controls the retail price you have to pay?

        I am sure Macy's is not the most expensive out there. What if the most expensive mandates that the retail price everywhere else must not be lower? They ALL CONSUMERS pay the excessive price, right? You bet.

        And that is precisely what Apple is demanding to do. It wants to raise the price for everyone just so that it does not look to be too expensive. Apple wants to preclude all price competition or in the alternative block acces to the stupid Apple customers it controls.

        Apple customers should be the ones complaining here. They were duped into buying an Apple device. And now they either do not get access to quality media or they pay a very high price (jacked up by Apple by some 42%).

        Apple custoemers are ready stupid for not objecting to this policy. It is dead against their financial interests.

    3. famousringo
      Badgers

      You keep using that word, 'illegal'...

      Most favored nation clauses are quite common in contracts these days. I hear even Amazon resorts to this form of 'illegal' price control. You'd think that somebody, somewhere would have challenged one of these illegal contracts.

      Illegal.

    4. Anonymous Coward
      Anonymous Coward

      Wrong

      I miss the Usenet days when you could have a killfile to ignore posters you didn't even want to see. Lewis Mettier would be first one there. "Blah blah blah Apple bad, blah blah blah Apple customers stupid". Your posts are always the same.

      From Amazon's Kindle Digital Publishing agreement:

      http://forums.kindledirectpublishing.com/kdpforums/entry.jspa?externalID=393

      "you must set and adjust from time-to-time as necessary the Digital Book’s List Price so that the List Price is no higher than any of the following:

      • the list price for any digital edition of the Digital Book in any sales channel;

      • if you sell a digital edition of the Digital Book directly to end users, the price at which you sell that digital edition to end users;"

      Essentially Amazon is doing exactly the same as Apple. So all you're saying is nonsense.

      1. Lewis Mettler
        Go

        blame the messenger?

        It is very likely that the Amazon agreement is illegal as well if it attempts to control the retail price for the same product or service available through other channels.

        However, most likely the "most favorite nation" agreements normally deal only with the wholesale cost to the distributor, not the retail price.

        If Amazon attempts to control the retail price, it too is most likely illegal.

        What if one retailer insists upon a 30% cut and other a 40% cut? What is the price then?

        If someone comes along and demands a 40% markup then Amazon may have to increase its retail price, right?

        The consumer is being screwed here. And that is why these kinds of controls are illegal.

        And, by the way, you misspelled my name. It is Lewis Mettler. Not Mettier.

        And by the way, the posts are the same because Apple customers are slow learners. Apparently. They do not understand that they are the target for the illegal policies.

        Blocking out a cheaper source for a product is always against the interest of the consumer.

        And, as Apple customes should now, price is not the only factor. Service counts too. Inventory counts for many products. As well as availability.

        If you think both Amazon and Apple are engaged in illegal practices, I can buy that. I do not doubt that they are. But, all consumers benefit directly as illegal practices are exposed and eliminated.

  3. Mr Templedene

    I do not understand

    Why any developers would take the chance of trying to make an iPhone app

    All that development work, and then a nail biting wait until Apple approves it for the store? too chancy for me.

    And then there has to be a different version for other mobile devices, this market is too fragmented at the moment.

    1. Anonymous Coward
      Anonymous Coward

      Which is probably why you are not a developer.

      What about that nail-biting wait after making anything - if the customer doesn't approve of it.

      You have a very blinkered view, and too chancy will never get you anywhere.

      Some developers of iPhone apps are making fortunes. There are plenty of stories out there of developers earning thousands and thousands of dollars/pounds off apps for the iPhone.

      There is a chap in London who has an iphone and rides the tube a lot. He thought it would be a good idea if there was an app that could help him be in the right carriage to be close to the exit when arriving at a particular station. He didn't have any dev experiance so he went to find someone who had. Paid that person to create the app and then put it up to the app store.

      That app has repaid his investment over and over again. He's just one who had the foresight to say 'that's not too chancy', and there are many more like him.

      think about it - you spend £1000 developing the app, you sell it for £5.99. Apple takes their 30%, you are left with £4.00. It only takes 250 downloads and your investment is repaid.

      If you follow the guidelines and don't try to pull a fast one, there's no reason why your app should be rejected by Apple.

      If you price your app at £0.59 how many sales do you need to recoup your £1,000? Well you're smart, you can do the maths.

      1. JEDIDIAH
        Linux

        Apple reality distortion field.

        > What about that nail-biting wait

        > after making anything - if the

        > customer doesn't approve of it.

        >

        > You have a very blinkered view,

        > and too chancy will never get you

        > anywhere.

        ...Apple fanboys are so funny.

        Apple Corp IS NOT THE CUSTOMER. You are. Apple Corp is nothing but a bridge troll taking a cut and possibly preventing you from SELLING YOUR PRODUCT AT ALL.

        With the old WinDOS model, no one prevents you from selling your product. You can sell it at Amazon or Best Buy or from your own custom web store and you don't have to ask anyone else's permission. Microsoft doesn't get to say a word about the situation.

        1. Anonymous Coward
          Anonymous Coward

          Like many others

          @JEDIDIAH

          You mean like the locked down unrooted Android phones, Windows Phones 7, the Kindles, PS3s, Xboxes, Wiis, l and other devices. It's just a different market, not "WinDOS" anymore get it?

          What I don't understand is why hatebois care so much.

        2. Anonymous Coward
          Anonymous Coward

          Hi Jedidiah

          Thanks for your insighful and well reasoned response.

          Who said anything about fanboys? - Oh sorry you did. Just like you usually do when making your comments.

          Where in my piece does it say that apple Corp is the customer?

          For your information (as you show a distinct lack of knowledge) Apple Corp is the company owned by The Beatles.

          Apart from that, keep posting you hate. It's entertaining at least.

        3. Mark Serlin
          Grenade

          That IS the problem

          @Jedediah - and how many rubbish apps did that result in - ones that crashed, froze, locked up your box, wrecked your files, or just did nothing? That's a rhetorical question but I'd guess somewhere in the tens of thousands. Not to mention all the malware, crapware, trojans, etc etc etc.

          Give me the distorted reality of an app that doesn't raid your contacts, cripple your device, run it as a spambot etc blah blah any day, thanks.

    2. Peter H. Coffin

      Re: I do not understand

      Why bother? HUGE market (there's a ton of iOS devices out there), relatively mature and stable SDK, luxurious developer support, and a your delivery and payment mechanisms part of the package. And, given that you're developing something that's actually fairly novel and doesn't offend too many people, the chance of Apple taking a long hard look at your application are pretty slim.

    3. ThomH

      It's because all business has risks

      The simple unequivocal existence of a risk doesn't in itself justify withdrawing from a market. Decisions are made by looking at the expected gain, which includes allowances for all the risks.

      So: it's a straightforward decision for someone like Amazon; probable gain is great and they've the clout to minimise the risk of rejections. It's also quite simple for amateur games writers, since the risk of rejection is tiny and the potential gain is great, even if extremely unlikely.

      In practise, the probability of being rejected adds only very slightly to the probability of your work making no income. It's just that "Apple rejects perfectly reasonable app; aren't they a bit controlling?" is much more interesting than "App is released; nobody uses it".

    4. ratfox

      Title

      Isn't market fragmentation precisely a reason to choose to develop an iPhone App? There are few other models that are sold in greater numbers. If you develop for android, you have to be ready to debug for the many handsets, which are way more varied than the iPhone models.

    5. E Haines

      This is why

      It's because, in reality, if you glance at the guidelines and make a reasonable effort not to blatantly violate them (which is straightforward enough; the guidelines are mostly common sense and not really onerous), you have a 99.9% chance of having your app approved with no issues. Despite what you hear from a few high-profile complainers, Apple is actually pretty easy to work with. This is not to say that everything is perfect, but the process has been noticeably streamlined since the early days, and usually they end up doing the right thing (like with the whole "must use Objective-C" kerfuffle, which they backed down on).

      I know, it's more fun to throw a fit and behave completely irrationally where Apple is concerned. Being reasonable is less interesting, but more profitable....

    6. sleepy

      It's simple:

      Developers make IOS Apps for the same reason robbers rob banks. It's where the money is.

    7. Anonymous Coward
      Anonymous Coward

      Easy

      Because if you just follow the guidelines (and they're quite simple) there's no nail biting moments, you app will be approved.

      Also given the rampant level of piracy on the Android platform it's also far more likely that you'll make money on your iPhone app. Unless you plan to give away the app and depend on ad revenue of course, but that doesn't work for all apps.

    8. DZ-Jay

      Re: I do not understand

      The payoff is easy to understand: iOS is where the money is at. There are 160 million users with credit cards on hand, proven to be willing to use them--even on fart apps and such. That's a *very* compelling market. And keep in mind that you not only get the iPhone users, but iPad, iPad 2, and iPod Touch users.

      Keep in mind also that most apps do get approved (there's hundreds of thousands of them in the store!), so it's not such a "chancy" proposition.

      The market may be fragmented, but it is with a bias towards Apple's devices. That is, they command a very large percentage of mobile users willing to spend money.

      -dZ.

    9. walterdithers

      A lazy developer?

      350,000 apps say that its very good business for a LOT of developers.

      Fragmented? Rubbish - Apple own it because they have the best software. Its all about the software, not a list of specs...

  4. jake Silver badge

    During the meanwhile, the cognizant in the audience ...

    ... are ignoring the fad.

    Nice to see the sheeple paying for R&D, though :-)

    1. Charles 9

      Not so much ignoring the fad...

      ...as waiting for the right moment. In my case, I'd like to see a color e-ink display that saves battery life and reads well outdoors. That may be a little while yet. Otherwise, I'll stick to my Android phone and my Sony Reader.

      1. BorkedAgain

        @Charles 9

        Ooh, snap! They're good, aren't they? :)

    2. RegGuy

      Freetard

      Naw. I'm not buying one coz they are too expensive. Plus, I take the view that I pay once for the hardware, and then just pay for an Internet pipe, just as with my ISP for my home broadband connection.

      I will not pay subscription fees for content, especially as there is so much free info online. Now maybe I'm missing something, but I'm not looking for 'an app' that gives me some info or service. I use a thing called a web browser for that. The great thing about this thing called HTTP is that I can find what I need on line and then view it for free -- weather forecasts for example.

      So the future (for me) is an Internet pipe, a web browser, and a hardware platform to run it on. I will agree to a one-time payment for the hardware, a subscription to the pipe for bandwidth only, and everything else I will get for free. If you want me to pay for it I will simply go elsewhere. The Internet is great for that, with so much choice I can always find what I want for free.

      Long live the freetard!!

      1. Anonymous Coward
        Pint

        Very wise...

        ....however sometimes scanning half a dozen websites is not always the most productive use of someones time. You buy and app that tells you the general population of sheep per hectare in Derbyshire ( should you need that! ) you have it available, rather than scanning lots of stats websites.

        Weather apps, 2-a-penny in the Apple app-store, a lot of them you don't need to pay for and without adverts. Without the MetOffice app I need to go to the MO website or the BBC, scan for the links for my area and play the flash movie to find out it's going to be pisssing down all week. The MO app saves my location, one click and I get an instant view of the weather, close it and carry on listening to my music.

        Time is precious and I'd rather be outside in the fresh air than stuck indoors staring at a browser to find the useful bits of info I need to get on with my life.

  5. Arctic fox
    Happy

    I would be utterly amazed if Amazon was not.........

    ......exploring precisely that option. Their tactic in selling the Kindle at what looks something like cost has paid off big time and whilst a repeat success with a full song with choruses Honeycomb tablet is not guaranteed by any manner of means, it would be fairly astonishing if they were not at least tempted by the prospect. Decently built and specced tablet(s) populating the price-segments between £300 to £500 with perhaps the next Honeycomb build on board combined with their well established retail content operation (music, films, books and soon apps) would stand a very good chance of cleaning up. Indeed, if I were in charge at Cupertino I would be watching Amazon very closely, in fact I might even be looking at something fairly dramatic with regard to the acquisition of a major content provider - Apple have after all a fairly substantial "war chest" available them.

    PS We may end up having to ask for an Amazon icon, with or without horns!

    1. Thomas 4

      We may end up having to ask for an Amazon icon

      Can it be one of those scantily clad Amazons that I've heard so much about?

    2. DZ-Jay

      @Arctic fox

      There's one angle that the story misses. Amazon, being mostly a seller of content, has traditionally depended on its high margins for such content. It has, however, being forced to lower its margins in order to compete with Apple on some fronts.

      Amazon's standard share for (non-negotiated) publication was 70% until they lowered it to 30% in order to compete with iBooks and iTunes. This is a big drop in margin for a company not making money on the hardware.

      Giving away their hardware to compete strictly on the price of their content with a hardware company with as much economies of scale and distribution clout is dangerous.

      If the expectation is that Amazon will take a play from Microsoft and undercut Apple until it is forced out of the market completely, then this is also risky and foolish. Apple has too much money, and is playing much too aggressively. Amazon would be better off carving its own segment and not competing as directly with Apple.

      -dZ.

      1. Arctic fox

        @DZ-Jay

        Actually I neither think it will be necessary or indeed wise for Amazon to start a "war" with Apple, why would they want to? The tablet market IMO is in its infancy and still far smaller than its potential. Android/Honeycomb tablets are going to be raining from the skies in the next few months at that is just a beginning. Amazon is aiming at what it believes will be a much expanded market for Android apps on both phones and tabs. If (and it is still an *IF*) Amazon elects to sell an own-brand tablet it will be as part of their strategy to compete for a share of the *Android* content market which they clearly believe has a very large potential. It is becoming increasingly likely that the table market is going to be several times the size it is today and it is likely that a hefty slice of that will be Android. That is where Amazon are aiming. Unless one believes that Apple has some kind of permanent lien on the tab market it is obvious that with the coming likely explosive growth in that market that Apple's market share will fall although their share will still be a large one of a MUCH larger market (which implies that Apple will be making even more money on tabs than they do now). This gives plenty of room for a major like Amazon to do a lot of good business. As to any expectation that Amazon would try and force Apple out of the market I can assure you that I do not share any such expectation. For such a thing to happen one would have to posit that the iPad will shortly become a big flop with Android taking over completely - clearly a total fantasy that I do not share. The tablet market is likely to be huge, there is plenty of room out there.

  6. Gordon 10

    Worst of both worlds

    Since Amazon have specialised in fucking Publishers and Content owners over for years before the App Store was a twinkle in Apples eye the prospect of an Amopple duopoly should fill no-one with joy.

  7. Neal 5

    It's clear

    from your analysis that you're proposing a cartel, every one taking 30%. Fantastic from a bizniz point of view, not so fantastic from the end users view point. How about some positive input. Amazon has a fantastic oportunity to put it up Apple and compete for once. What about the idea of only taking 10% or less and forcing Apple to reshape it's business model. Yes I know it's about making money, but a cartel only fucks everyone, competition creates innovation, and ultimately everyone benefits. Is that not what progress is about?.

  8. Anonymous Coward
    Anonymous Coward

    The Real Alternative Is ...

    ... not everyone wants a desktop and a laptop and a netbook and a smartphone and a tablet.

  9. Anonymous Coward
    Anonymous Coward

    ... all the people

    I've heard of vapourware, but this must surely count as imagineware.

  10. Herba
    Alert

    Apple policy

    I love Apple produits and OS but I sincerily think there publisher policy is seriously flaw and hope it crash and Burns. Its like apple only has one field to store percentage, everything doesn't have to be 30%. And it's obvious reseller of content like amazon, Netflix, hulu, zinio can't pay the same cut to apple has a publisher who sell is content directly in the app store.

    I particular hate the rule that force to sell at the same price they offer on there websites, that got to be illegal...

    1. Lewis Mettler
      Stop

      clearly an attempt to eliminate price competition

      Apple is trying to control the retail price of products and services available through other channels.

      And interestingly if you are very price competitive yourself, you can almost get away with that. Even Apple does not care if you sell for more elsewhere.

      But, when you force a 30% cut off the top (42.8% markup to consumers), then Apple forces higher prices everywhere else. And that can prevent you from being competitive to others that do not use the Apple marketplace.

      Maybe there are some subscriptions that are so controlled and of high enough quality to not compete on price anyway. The New York Times might be an example. But, many offering subscriptions do not have that luxury. Or, they sell primarily to customers that have more money than intelligence?

      And, of course, Apple wants to force any direct competitors to raise their prices so that they can not compete on price against any Apple tunes or services.

      Again, none of this benefits any consumer even if they have an Apple device.

      It is amazing how so-claimed "Apple customers" defend this policy. It is not in their interest at all.

      Consumers want links directly to the source. Consumers want a choice of supplier. Consumers wants a choice of retailer too. And they clearly do not benefit if everyone pays the same high price caused by a money grabbing 30% cut off the top.

      Apple customes are being attacked here directly by Apple. Prices will be higher or the service will be blocked by Apple.

  11. P. Lee

    Motorola not controlling the platform?

    "But bugs in the Motorola tablet highlight the downside of not having full control of one's platform, since most of them appear to come from crashes and other faults in the new tablet release of Android, Honeycomb – not from the hardware. "

    I think this has missed the point. Motorola can control the platform, they just haven't put in the developer time. They could fork the code, they could contribute xoom-specific bugfixes - as long as they comply with the license they could do this. Apple obviously does all their own bug-hunting with their OS. Motorola just hasn't done it properly - and that attitude is likely to lead to failure.

    To succeed they need to at least: have decent hardware, decent software and have an app store where the code is verified as non-nasty.

    1. Gordon 10
      FAIL

      Thats an unrealistic statement.

      Moto went to Android specifically to avoid the scenario you described. Forking and maintaining a diverging codebase is a zero sum game. They may as well have started with their own OS.

      Im willing to bet even modified UI Android punters like HTC, Samsung and SE rarely if ever touch the core code.

      1. Anonymous Coward
        Anonymous Coward

        Zero sum game

        is when you don't actually read the comment your complaining about. What part of submitting back the fixes to the main tree did you miss?

        But I do think the problem here is the bugs are in the closed bits of the Android tree (yes such a thing exists!), for example most of the NVIDIA Tegra stuff is all in binary blobs. Apple probably gets a lot more access to source code for their stuff.

        1. DZ-Jay

          Re: Zero sum game

          You don't get it, do you? His point was that Motorola and the rest picked Android *precisely* because it was supposed to be a well-rounded system and they didn't have to spend any development time with it. Spending *any* resources in fixing what's broken negates the one advantage that attracted them to begin with.

          It's like buying a house with the expectation that it is in very good condition, and discovering that the foundation is faulty and the wiring needs work. Sure, you could get it fixed (at perhaps considerably less cost than building a brand new house from scratch), but you were not in the market for a "fixer-upper." Now, all that money you thought you saved, cannot be invested in your other interests and has to be spent in repairs.

          -dZ.

  12. baswell
    Jobs Horns

    Not until june, now!

    "when it introduces new rules on in-app purchasing at the end of June".

    I have an "external subscription app". All my updates (new features, bug fixes) are being knocked back by Apple because of this rule. "Must use in-app".

    And if you have an app with multiple levels of subscriptions, like mine, you can't let people up or downgrade their subscription with the Apple API.

  13. Onizuka-GTO

    Honeycomb is the reason Xoom fail....

    ...yet Samsung is expected to be fantastic....with Honeycomb?

    Er...bipolar much?

    Make up your mind, if its Android fault & not hardware then I doubt Samsung will do well either.

    But I suppose you have to blame something else, except the price point huh?

  14. Anonymous Coward
    Badgers

    Onkyo tablet

    Does anybody know any more about it? Need a tablet that I could also actually do work with, but would also be fun for casual gaming... does it exist outside of Japan?

    badgers... why not.

  15. David Evans

    Will Amazon be just as bad?

    I kind of agree that Amazon are the only company with the weight to piss on Apple's subscription chips, and since they are prepping an Android app store and have the example of B&N's Nook to see how a tablet could work out for them, it seems very, very likely Amazon will step into the tablet market. Question is, will they try to close the ecosystem to rivals, or leave things open? Amazon have form in both directions so its difficult to tell, but one of the main reasons I like my Galaxy Tab more than a Kindle is that I can easily use it for Kindle books AND ePub titles from elsewhere as it suits me (I actually prefer the Kobo reader to Kindle truth be told, but Kindle has far more titles), without any jumping through hoops breaking drm or reformatting.

    So, will Amazon tolerate other bookstores on their tablet? (or video and music?)

  16. Mikel

    Xoom's advantage?

    It can be had.

    1. Gordon 10
      Thumb Up

      In UK - really?

      Xoom is available for delivery from PCworld.co.uk "for delivery first week april". Ipad 2 is currently listed for pre-order from the Apple store on this Friday (25th)

      I'd bet the price of a Xoom that if I pre-order both on Friday the Ipad will arrive first.

    2. SuccessCase
      Thumb Up

      Xoom's advantage

      It starts with an 'x' but is pronounced like a 'z.' How cool is that !

  17. Mystic Megabyte
    Big Brother

    Maybe I don't fully understand...

    ...but I'm not keen on buying any device where the manufacturer can remotely delete content on it.

    In the light of the Wikileaks saga is that not like letting the USA government have a backdoor on my data?

    1. '); DROP TABLE comments; --
      Flame

      I know!

      But hardly anybody seems bothered about this very disturbing trend int he OS industry. Apple do it, Amazon do it, Google does it with Android, even Microsoft with Windows Phone 7 have now adopted the ability to STEAL data from your device (and this IS stealing in the true sense of the word).

      Yet nobody's complaining about this gross violation of consumer rights. Where are the columns of rage-filled comments, where are the angry bloggers, where are the mass consumer boycotts? It's like the sheep are willingly walking to the slaughter, a future in which they retain zero control over their own private data.

      People - if you are at all serious about your freedom and the integrity of your data you will jump up en masse and start screaming about this. That you all are willingly sleepwalking into this fills me with no emotion for humanity other than the utterest contempt.

  18. David Lucke

    Devil or the deep blue sea?

    So, the only hope of competition to an arguably evil company is another arguably evil company. So I should be cheering for who now?

    Amazon, after all, is often described as the Wallmart of bookstores for its many dodgy practices, most recently screwing publishers over ebook pricing, whereas Apple is screwing over content providers, including ebook publishers with its new in-app policies.

    A pox on both their houses.

  19. Anonymous Coward
    Anonymous Coward

    alternative to both Amazon and Apple

    http://www.guardian.co.uk/books/2011/mar/20/could-this-kill-kindle

    ...the fightback begins.

    1. Gordon 10
      Thumb Down

      Not a dogs chance

      A different paper format is not going to stop the Kindle. Its a solution for a problem that doesnt exist.

      I spent almost every day for 4 years reading paperbacks and hardbacks on the tube with no issues.

  20. Andy Farley
    Thumb Up

    If I wanted a tablet

    I'd probably do this:

    http://online.wsj.com/article/SB10001424052748703662804576188901890884360.html

    Seems to me, if Amazon could produce one for £150 it might actually be cheap/fun enough to buy.

  21. Anonymous Coward
    Anonymous Coward

    The 30%

    Some of our local newspapers have offered an iPad subscription for a while. The app needed to be bought through the appstore, the subscription however was handled through the newspaper.

    This changed a few months ago, when the Cult of Jobs ordained that hence forth 30% was also owed to apple if the subscribtion was bought through the newspaper.

    The papers were not extatic about this development, and tox crapple (oops, sorry) to task in the courts.

    The result of the matter is that if the app AND the subscription are bought through the crapstor (again, oops), they indeed take 30% off the top.

    However, subscriptions can still be bought via the newspaper websites, in which case crapple (ole) gets zilch.

    So it CAN be done.

    1. Gordon 10
      Thumb Up

      Linky to this story would be good

      as above

    2. DZ-Jay

      @Peter R. 1

      I call bollocks on your story. Apple's policy--and indeed, Steve Jobs himself--said exactly that when the new regulation was introduced: if users subscribe through in-app purchase, Apple gets 30%, but if they subscribe through an outside means (which they are perfectly in their right to offer), Apple gets nothing.

      I very much doubt they "tox crapple (sic) to task in the courts" to confirm what the policy already says in writing.

      Still, the fact remains that nobody is forced to exclude their own subscription implementation. They just need to offer the same price through an in-app purchase to users who do not want to give their credit card details through an outside mechanism.

      -dZ.

  22. Mark .

    "since it has very few competitors."

    For what? When it comes to mobile devices that can access the Internet and run apps, there are loads, including those that sell more. Everything from phones to other handheld devices to netbooks can do this - and were long before the Ipad came about.

    What exactly is it that few can compete with?

    "iPad's lengthy headstart"

    Headstart for what? We've had phones for years, netbooks since 2007. Handheld devices like even Apple's own Ipod Touch, and devices from Nokia and Archos were also around earlier.

    "The Motorola Xoom is just about the only product in the iPad's category that is actually on sale for comparison"

    Aha, now we have it. It's the trick of shrinking the market down to look at only devices almost exactly identical. You might as well say that Apple have 100% market share of Ipads! But let's spin it around: Nothing can rival the Motorola Xoom, and the Ipad is just about the only product in the Xoom's category that is actually on sale for comparison. The flaw in this argument is that you don't have to have a device _exactly_ the same, to do the things people are interested in.

    It's like creating a whole new arbitrary category for built-in-one computers that have a fruit logo on them, and then saying that Apple are the market leader.

    (Also ironic the implied derision of devices not on sale - when it's the Ipad that's been receiving hype long before its release.)

    But even if we do look at the ill-defined "tablet" market, and wrongly exclude smaller tablets like smartphones, Apple are still losing market share. Predictions show that they will massively lose market share further in future. They're a sinking ship, right? That's what people say about Nokia losing market share (despite being number one and with increasing sales), after all.

  23. Mark .

    Re: Which is probably why you are not a developer

    "What about that nail-biting wait after making anything - if the customer doesn't approve of it."

    Most people have more than one potential customer. The whole problem here is placing your dependency not on other companies (which is fair enough), but solely on one company, Apple.

    Peter H. Coffin: You get an even huger market with Nokia and Android (each), together with mature and stable SDK, luxurious developer support, and delivery and payment mechanisms part of the package.

    ratfox: By this logic, no one would write anything for Windows. Anyhow, debugging isn't a problem - with Nokia, I can remote test my app for free on any Nokia device. Apple have something like this too, right?

    1. John Molloy

      You are missing the point.

      The Apple ecosystem has a huge number of paying customers. It is where the money is.

      With Android people who get cheap phones just want free software.

      So you get the same level of noise without the payoff.

    2. Anonymous Coward
      Anonymous Coward

      What?

      What dependency are you talking about? Much software has depended on Microsoft Windows in the past and that seemed to go well for them.

      Android mature and stable SDK? Don't make me laugh. Clearly, just look at what changed between Gingerbread and Honeycomb.

      Payment mechanisms: You mean the yet to arrive in-app payments for Android?

      Btw, didn't you read the news? Symbian is dead. I guess that'll free up those remote testing time slots.

  24. Anonymous Coward
    Gates Halo

    I would like to see Amazon...

    Itemise the bill, so you have your VAT and "Apple Tax" spelled out for you.

    I find it so funny how for years and years everyone thought Microsoft was the evil empire, because they bundled a web browser in their OS for free and broke Java. Forcing all developers to share 30% of revenues made from their software was never in question... no one thought it would ever get that bad. Ironic that years after they came up with the idea of an "Apple Tax", Apple are finally implementing the idea.

    I resent my iPhone (of which I use the Kindle App on quite a bit), and look forward to dumping it for Android or Windows Phone 7.

    1. Anonymous Coward
      Anonymous Coward

      Try again

      That were not the only reasons Microsoft was considered the evil empire.. Think again. Maybe secret deals with hardware manufacturer to bundle Internet Explorer ring a bell? Project Blackbird? Microsoft Network?

      As for the rest of your post platforms charging for software go a long way back, they were called consoles. Remember the Gameboy, launched in 1989?

      Same concept as the iOS devices, but now much more democratic (anyone can publish software for them, no pot of gold required) and WAY, let me say that again WAYYY, less expensive to get on board too.

      But please do go ahead a move to Windows Phone 7, I think its a match made in heaven for you.

      1. Anonymous Coward
        Jobs Horns

        @AC 04:09 "Try Again"

        There's only one slight flaw in your games analogy, Nintendo don't insist you can only offer the same game on another platform if you price it the same as on Nintendo's platforms. This is the principle criticism of Apple's model; I really don't give a damn if they want to charge a "tax", that's just a normal business practice (although it would be nice if you could negotiate, but American software giants seem to have given up on that idea), but I do object to their interference in other distribution channels, and as a consumer, so should you.

    2. DZ-Jay

      @AC

      Did you know that your precious Amazon excised publishers up to 70% for selling their goods? Yes, that's right. They only *lowered* it to 30% to compete with Apple.

      -dZ.

  25. noodle heimer

    nookery rocks

    For me - and on the desktop, I'm a gearhead, running multiple VMs and wanting plenty of ram and computing power, and a few T of storage in the living room - the Nook is an excellent tablet.

    The tablet is mostly about consumption - about a nice thing to read the news with the evening, or a book or two.

    The blazing fast CPU isn't a big deal to me (though if I watched movies on a tab, the Nook might start to seem slow) on a tablet. I want control of the OS and I want easy file management.

    The nook's trivially rootable, my model most often boots the BN firmware rooted so I can use an RSS reader but was running a mod this weekend to look at bluetooth support (keyboard, good; microphone, not so good yet in my hands.)

    It's the first device I've come across to rival the 12 year old niche Palm Pilots have filled for me, with the addition of b-folders for locally accessible address database.

    I hope Amazon makes a 500 dollar device - I'd hate to see them make a 300 dollar device and have the nook dev community get more interested in Kindles.

    1. Anonymous Coward
      Anonymous Coward

      and in recent news..

      Is the Nook the one being sued by Microsoft at the moment?

      How I do foresee a long and happy life for it...

  26. Mark 110

    Errrm

    This:

    "Apple's apparent success in keeping its huge market share during 2011 is not just because of its own headstart and strong brand, but because its rivals are coming to market with flawed strategies, argues research firm Forrester."

    Is bollocks.

    Apple doesn't have a huge market share. Most of the people that would like a tablet haven't bought one because the only good one is the Apple one which is too expensive for most peoples pockets. I would like one and can afford one but haven't bought one because . . well . . I don't buy over proced Apple shite.

    Anyway - my point is the market for tablets is millions of times larger then the number of tablets that have been sold so far and Apple have, so far, only diipped into a tiny segment of that market. Apple have just as much of a flawed strategy as everyone else or I would have bought an iPad.

  27. walterdithers
    Grenade

    Apple hot news!

    This just in - not everything Apple does is great, but they generally do a reasonable job.

    Plus, its now been discovered that there is NO viable competition, because they are either (a) too lazy and rich - msft, or (b) too stupid!

    Apple have built a customer base of over 200 million people with their credit cards registered to buy music, movies, books, etc.

    They have not become the second largest co. on the planet (after Exxon) by accident.

    While M$oft were dreaming, Apple were working hard to sort out the music business mess, (which they did) and building good software and hardware. Whats not to like?

    If the in-app purchase thing proves to be a dud (or even illegal), then it will be dumped and Apple will look at other options.

    The real question is why other tech companies cant compete...

This topic is closed for new posts.

Other stories you might like