In its second-largest acquisition, Amazon buys the company for $970 million.
It could make more merchants focus app development efforts on Android.
Apple Inc. has sold 28.7 million iPad tablet computers worldwide to date, the company reports. It utterly dominates the tablet market, and retailers and other businesses delving into tablet apps have focused their energies on iPad apps, not apps for tablets running Google Inc.’s Android operating system. Though growing, sales of Android tablets lag far behind the iPad.
But that may change come October. If reports are true, Amazon.com Inc. will introduce its own Android tablet PC this fall. An Amazon tablet could follow in the successful footsteps of the e-retailer’s popular Kindle e-reader, thus enticing more merchants to consider developing Android apps.
“If it’s launched at the right price with enough supply, we see Amazon’s tablet easily selling three million to five million units in Q4 alone, disrupting not only Apple’s product strategy but other tablet manufacturers’ as well,” writes Forrester Research Inc. analyst Sarah Rotman Epps in a new report entitled “Amazon Will Be Apple’s Top Competitor in Tablets.” “Apple will maintain a strong lead in market share, but Amazon will gain ground quickly and give product strategists from media, software, retail, banking and other firms a reason to kick app development for Android tablets into high gear.”
A year from now “Amazon” will be synonymous with “Android” in the tablet marketplace, Epps says. “Amazon will provide the missing pieces of the puzzle that Android is lacking: a competitive price point, a good experience for app shopping, a wide selection of content and convenient e-commerce,” she says.
Amazon.com did not immediately respond to a request for comment.
Retailers on average have spent only $14,000 on tablet commerce projects, yet on average 21% of their mobile traffic comes from tablets, Forrester Research finds. A tablet from a retail powerhouse with a highly successful track record at selling mobile hardware could mean that merchants will need to ramp up tablet strategies.
“So far, retailers have not invested much in building tablet apps or optimizing their web sites for tablets, even though shopping is a top activity that consumers do on the iPad today,” Epps says. “In addition to investing more in Apple’s platform, retailers must decide how to play the Amazon opportunity. If consumers buy and use Amazon’s tablet for shopping, retailers can’t afford not to be part of that experience.”