Begun the Tablet Wars Have

End the speculation (maybe) – here comes the Apple tablet (analyst Yair Reiner of Oppenheimer, quoted at Apple Insider, found via Clusterstock):


“Our checks into Apple’s supply chain indicate the manufacturing cogs for the tablet are creaking into action and should begin to hit a mass market stride in February,” the note said. “At this stage Apple appears to be sizing its supply chain to support production of as many as 1M units per month.”

[…]

Apple is also said to be offering publishers a deal that will allow them to release their content on other online stores, such as for Amazon’s Kindle, or for new, forthcoming digital storefronts from major publishers. But Apple could sweeten the pot by offering a better deal than some companies, like Amazon, currently offer.


“Contacts in the U.S. tell us Apple is approaching book publishers with a very attractive proposal for distributing their content,” Reiner said. “Apple will split revenue 30/70 (Apple/publisher); give the same deal to all comers; and not request exclusivity. We believe the typical Kindle split is 50/50, rising to 30/70 if Kindle is given ebook exclusivity.”

He went on to say that the Kindle has “disgruntled the publishing industry” by strong-arming companies into exclusivity through a “wolfish cut of revenue” taken if they sell their content elsewhere. The Kindle also does not allow advertising in content it sells for its device.

[…]

Oppenheimer predicts that the company could sell between 1 million and 1.5 million devices per quarter at an average selling price of $1,000[.]

Is this a threat to Amazon’s experiment with Kindle?  Quite possibly.  If the marketplace remains static until the tablet is introduced,  Apple will come to dominate the market, just like it has done  with MP3 players.  Apple brings its core competencies of control over hardware and manufacturing, superior user experience,  and stellar design and aesthetics.

I think Apple as platform will be a better monetary deal for publishers and advertising (with regards to data) well as a wealthier demographic, but Apple will be challenged to deliver mass market advertising.   The fanboys will scoop them up, and the tablet will become the lusted-for (overpriced in this case) status symbol, just like the iPhone.

It’s going to be very difficult to dislodge them if they are immediately successful.  They will have monetized print in the same way Google monetized internet advertising.
Now, if I were Amazon, I would do the following:
  • Lock up as much content as you can.  Not everyone is going to want to cede control to Apple.
  • Partner with someone (preferably several parties) with deep pockets and vested interests.
  • Open-source the hardware, and license the Kindle software.
  • Coordinate and influence the hardware manufacturers (aka how Google has dealt with Motorola and HTC on their Android phones.  A lot of support, and a lot of input to the consumer experience).

The Apple tablet is going to be the prize-winning orchid in the eBook arena.  Of course, beautiful, delicate, and specialized flowers require exact conditions to prosper.  Whoever is going to go up against Apple needs to be a dandelion.