Can Amazon Give Google A Hit Honeycomb Tablet?

The Amazon Android tablet meme was revived in full force last week after stories by the Wall Street Journal and The New York Times unearthed more details about a media consumption device that could challenge Apple’s iPad or other e-reader devices.

The Journal said consumers can expect a tablet equipped with a 9-inch screen that connects users to Amazon’s extensive media content, including Amazon MP3 music and Cloud Player and Amazon Instant Video. Such a device would run the Android “Honeycomb” tablet-tailored OS.

Amazon also has an Android Appstore to offer users thousands of applications written for the open-source platform, though the device will not have a camera. The company is having an Asian hardware manufacturer — some have said Samsung — build the machine.

The Times meanwhile said Amazon has struggled with how to position the device, debating “the pros and cons of an Amazon tablet running Android versus Amazon building its own operating system based on the existing Kindle platform.”

Honeycomb a failure?

The market is increasingly saturated with Honeycomb tablets such as the Motorola Xoom, Samsung Galaxy Tab 10.1, Toshiba Thrive and Acer Iconia Tab 500, among others. None of them have proven hot sellers to date.

Global Equities Research analyst Trip Chowdry — who has criticised Honeycomb tablets in the past as buggy and not efficient or particularly user-friendly for the vast majority of consumers — doesn’t believe Amazon will deliver Honeycomb’s salvation.

Chowdry believes that if Honeycomb were going to succeed in this digital, Internet-oriented age, it would have been an instant hit, noting that a successful market product is usually defined within the first hour or two of its launch.

As examples, he pointed to Apple’s iPhone, iPad and even the new Google+ social network, which racked up 10 million users in two weeks.

“In the Internet space, there is no second chance. You get it right or screw it up and move on to the next project,” Chowdry said. “In these areas, you have exponential growth, or no growth. Honeycomb is a failure, period.”

Not Honeycomb’s last stand

However, Forrester Research analyst Sarah Rotman Epps, who has been expecting an Amazon Android tablet for months to try to challenge Apple’s iPad domination, doesn’t think this is Honeycomb’s last stand.

Epps pointed to Sony’s S1 and S2 slates, which are coming to the market in September, as high-quality Honeycomb tablets.

“We’re in inning 2 for Android,” Epps said. However, she acknowledged, “It’s fair to say the Honeycomb software is not as developed as iOS and it doesn’t deliver the features consumers expect from an operating system like Windows.”

Epps does believe Amazon, with its vast content ecosystem and e-commerce distribution of customers, could provide a strong, low-cost alternative to the iPad.

The device might not stack up in hardware sophistication, but it could be subsidised — $300 or less — by Amazon, which could eat the remaining costs or offer a tablet paired with advertising.

“I have no doubt that Amazon’s tablet will far outsell the other Android tablets that have been on the market so far, but it’s not Android’s last gasp,” Epps said.

Epps said Amazon will compete with the iPad in three ways: on price, assuming they sell the hardware at a loss as they have done with the Kindle; in the cloud, where Apple is behind; and in e-commerce, where Amazon is the undisputed leader. She said 47 percent of tablet owners have reported researching and purchasing products from their tablet.

High-end, low-end options

IDC analyst Bob O’Donnell believes Amazon will offer two tablets: one low-cost device priced around $249 to compete with the Barnes & Noble Color Nook e-reader and one more traditional 10-inch tablet for $399 to rival the iPad.

IDC considers this Android-based device a tablet; O’Donnell said it was one of the best-selling Android tablets in the first quarter this year, better than even the Amazon Kindle sales.

“Here’s the problem: All of these Android guys are pretty much offering the same product,” O’Donnell said. “They’re all of the same thing and have been priced the same. Now you’re seeing the PC guys [Acer, Toshiba] come in cheaper.”

Whether the Amazon Android tablet is targeted at the iPad or the Nook, Chowdry believes Apple will be unfazed by the salvo. He said Honeycomb’s ecosystem is “fundamentally broken because Google is going with reach,” diluting its value proposition.

“You have got to have a good balance between reach and profitability, and Apple iPad has it right,” Chowdry told eWEEK. “Developers are getting more traction, more revenues, better support and better tools from Apple’s ecosystem versus Android.”