Sony is no copycat. Its Tablet S, revealed at IFA today, shows true innovation in hardware design. It’s slightly smaller than the iPad, but it feels completely different to hold, with its folded-magazine “wraparound” design. It has high-tech features that set it apart from the iPad and other Android Honeycomb tablets, including DLNA support, an IR blaster, and what Sony calls “quick view/quick touch,” which makes the screen and Web browser extremely responsive and fast-loading.
A bigger step for Sony is what comes on the device. The Tablet S comes preloaded with access to Sony Entertainment Network, including a six-month free subscription to its Music Unlimited service, plus two free PlayStation 1 games—finally, leveraging assets from across different business units, a huge step for Sony. Sony has also negotiated deals for an exclusive window to several new Android tablet apps, including Crackle and Foursquare, which will be preloaded on the device. These are all important product innovations, which combined with Sony’s brand should put Sony’s product ahead of many Android competitors in consumers’ minds.
We’ve been beating the Amazon tablet drum for a while—in fact, as early as April 2010, my colleague James McQuivey wrote that Amazon's product strategists should “go head to head” with Apple and create its own tablet. Now, on the cusp of Amazon actually doing so (perhaps as early as October), we’re turning up the volume with a new report explaining exactly how, and why, Amazon will disrupt the tablet market.
This report has been in the works for months. We held off publishing it last week out of respect for Steve Jobs, and we have great admiration for his inventions and influence on our culture.
Even though Amazon taking on Apple is a bit like David taking on Goliath (compare the market cap, profits, and cash position of the two companies), Amazon’s willingness to sell hardware at a loss combined with the strength of its brand, content, cloud infrastructure, and commerce assets makes it the only credible iPad competitor in the market. If Amazon launches a tablet at a sub-$300 price point — assuming it has enough supply to meet demand — we see Amazon selling 3-5 million tablets in Q4 alone.
Amazon’s quick ascension in the tablet market will completely disrupt the status quo. Apple will retain dominant market share, but Amazon will cause product strategists at: