Is Amazon building a new tablet-size Kindle?

Amazon iPad-sized tablet computer - Kindle DX

“I bet Amazon is developing their own tablet computer.”

That’s what technology columnist Andy Ihnatko wrote in an insightful new article in the Chicago Sun-Times last week. Amazon had just announced their new app store for smartphones and tablet devices running the Android operating system. Was it the first step towards a color, iPad-style multimedia computing device? “I don’t know that they’re doing this,” Ihnatko wrote. “But I do know that Amazon has all of the required pieces in place and that they…are clearly in the best position to challenge Apple and the iPad.”

And here’s some more possible evidence from within the last week.

  • Yesterday Amazon’s older tablet-sized Kindle DX suddenly went on sale at a 20% discount at Best Buy and Staples. Were they selling off their inventory before introducing a better model?

  • Thursday Amazon added a link in the Kindle’s built-in store for downloading audiobook files. Were they encouraging Kindle owners to explore the Kindle’s audio capabilities?

It’s starting to feel like a not-so-secret secret. “Amazon has been working on a multi-touch color device with Wi-Fi since at least early last year,” reported Matt Buchanan of Gizmodo, “if not earlier. It bought a multi-touch company called Touchco, and merged it with Lab126, the subsidiary that works on Kindles. Then it put out calls LCD specialists. Another name for a multi-touch color screen device? A tablet.” Buchanan also suggests that there’s not much money for Amazon to make selling apps — unless they’re really planning to sell a new device that runs them.

It’s a move which seems to make a lot of business sense. Right now the only real competition to the Kindle is the Nook — an Android-based tablet which offers a back-lit color screen. But just Friday Barnes and Noble confirmed big improvements are coming for the NOOK Color in April, which reportedly include e-mail, an app store, and even support for Flash animation and video. They’ve sold millions of the device in the last six months, according to the business magazine Fast Company. Are they pressuring Amazon to come out with their own color multimedia reader?

Watch closely, and it seems like Amazon is already putting into the place the very things that some pundits are recommending. “If a Kindle tablet had a ‘Recommend this thing I’m looking at right now’ button…that one feature would be a force-multiplier for the commercial impact of the whole platform,” Andy Ihnatko wrote. But of course, just recently Amazon added a “Before you go” feature to the Kindle 3. (“When you reach the end of the book, you can immediately…share a message about the book with your social network,” Amazon explained when they announced the upgrade last month.) If Amazon proves it can generate sales for content, “it wouldn’t take much for Amazon to legitimize itself as the friend to independent producers of books and music and video,” Ihnatko writes. Apple needed its iTunes store before people would buy the iPod, and their app store to sell the iPad. But now Amazon could be offering up some real competition.

Of course, maybe Amazon is just trying to spook Apple — to give them some leverage over Apple’s threat to demand royalties off any sales which happen in the apps run on Apple products. But it’s the question that just won’t go away, and it’s fascinating to read the speculation. “The Kindle engineering team has always had a knack for zeroing in on the critical function of the device and then refusing to get precious about anything that isn’t absolutely necessary to that goal…” Ihnatko points out. “Amazon keeps the Kindle on message. Although Amazon isn’t in the business of technological innovation, they have a proven track record for making inexpensive devices that people instinctively like.”

I’m enjoying the what-if scenarios because they brings out some great analysis, and whatever happens, this conversation is helpful for understanding the world today. And I loved how Ihnatko concluded his 2,800-word masterpiece — the last reason he offered for an iPad-style Kindle. “Amazon can succeed like Apple and maybe exceed Apple’s success in many places because it has the single greatest asset that any tech company can possibly have: It’s run by a crazy billionaire… Listen to me: Jeff Bezos has his own space program. I never tire of saying that. This is clearly not a man who’s intimidated by the scale of a project or the expense.

“If there’s a real chance of success, he’s willing to pour in the money, the focus and the motivation that are necessary for his people make it happen.”

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