Analyst And God Pour Cold Water On iPad 2 Release

According to CNN, at 17:00 last night, in New York, six soggy Apple fanboys were already queueing  in the rain beside the enormous glass cube that marks Apple’s Fifth Avenue store. When the doors were due to be flung open at 05:00 this morning, the frantic ranks were expected to be swollen with people keen to be the first in the world to own the new tablets.

The fates were not the only ones pouring cold water on the launch as  Forrester released a report that Amazon would immediately be seen as a strong challenge to the iPad’s dominance.  Of course, the e-commerce and e-reading giant would have to build a tablet first.

Forrester analyst Sarah Rotman Epps said that while the Motorola Xoom, HP TouchPad and RIM Blackberry PlayBook are solid alternatives to the iPad and the iPad 2, those devices are too expensive and cannot compete with the Apple Store channel. Hence, the research firm’s prediction that Apple will command 80 percent of the US consumer tablet market through 2011, with the new entrants shaving only 10 percent from Apple’s 2010 tablet share after the first iPad sold 15 million units.

Dark Horse To Stalking Horse

Enter Amazon as a potential dark horse challenger to the impending iPad hegemony, which is supported by a thriving, but closed ecosystem of tightly controlled hardware, software and applications.

“It would be easy to call the game for Apple as the second innings is starting but we won’t, because we see a market that’s ripe for disruption, by Amazon in particular,” Epps wrote in a blog post. “Amazon could create a compelling Android- or Linux-based tablet offering easy access to Amazon’s shopfront (including its forthcoming Android apps store) and unique Amazon features like one-click purchasing, Amazon Prime service and its recommendations engine.”

Why would Amazon undertake such a bold play? Competition. Apple CEO Steve Jobs said at the iPad 2 introduction on March 2 that iPad and iPhone users have downloaded more than 100 million iBooks, presenting a serious threat to Amazon’s Kindle e-books.

The company could offer users an alternative to the stringent rules Apple has created for e-book sellers and publishers that require in-application payments. This potentially freezes out Amazon, which now has the motivation to create its own tablet.

Amazon could also sell a tablet at or below cost, recouping its expenses by selling content. Consumers would have to pay for 3G and 4G data plans. This model, Epps argued, would be preferable to the model Motorola, Samsung and others are using to sell their tablets via carriers at a subsidised price.

Ultimately, Epps said, Amazon has the brand; content such as eBooks, MP3s, streaming video and games; and retail channel inventory to make a tablet work. She is not just guessing either. Epps said a survey revealed that 24 percent of consumers said they would consider purchasing a tablet from Amazon, compared with 18 percent who said they would buy one from Motorola. Moreover, 28 percent of consumers considering buying a tablet would prefer to buy it from an online retailer, like Amazon, compared with only 11 percent who say they would buy one from a carrier.

From a branding standpoint, it appears carriers and their notorious data plans are scaring off tablet customers.

Suppose Amazon did build a tablet. Android would appear to be the most obvious OS to use. The company has already created its own application store for Android applications, so it would make sense to offer a branded Android device to run them on.