Jeff Bezos's firm expected to release a tablet computer before Christmas to add to its dominance of the ereader market
Amazon is expected to release a tablet computer before Christmas which analysts forecast will finally provide serious competition for Apple's iPad, which has had the overwhelming share of the tablet market since its launch in April 2010.
Though the company declined to comment on Tuesday, a growing number of analysts and industry watchers said Amazon, best known for its online shopping site, is preparing to push into the highly competitive tablet market to add to its dominance of the handheld ereader market through its Kindle device.
Meanwhile US testers of Apple's new iCloud service say it will allow users both to download and to stream music wirelessly to iPhones and iPads, after using early versions of the "iTunes Match" service – which will put Apple into even closer rivalry with Amazon's own "music locker" service launched in the US earlier this year.
Sarah Rotman at Forrester, speaking about the expected tablet from Amazon, said that if Jeff Bezos's company manages to set the price below $300 (£185) and launch it by October, "we see Amazon selling 3m to 5m tablets" by the end of the year and that it will "completely disrupt the status quo". However she sees Apple continuing to dominate the sector, where it has roughly three-quarters of the market. In the Christmas quarter of 2010, Apple sold 7.3m iPads.
Rotman said that "even though Amazon taking on Apple is a bit like David taking on Goliath – compare the market capitalisation, profits and cash position of the two companies – Amazon's willingness to sell hardware at a loss, combined with the strength of its brand ... makes it the only credible iPad competitor in the market".
Apple has sold more than 28m iPads since it was launched, reporting 9.2m sold in the three months from April to June in its most recent financial results. Though Amazon does not release data about sales of the Kindle, the analysts IDC believe 3m were sold in the Christmas quarter of 2010, adding to the millions already in users' hands; since then it has also introduced a lower-price version. IDC estimates around 6m Kindles were sold in 2010.
Analysts expect Amazon's forthcoming tablet will use Google's Android mobile operating system, which has become the dominant player in the smartphone market, pushing aside Finland's Nokia, but made little impact so far on the larger devices, partly due to a lack of content and apps.
But Amazon has been preparing its own "app market" for Android, and can offer its Kindle app on the platform, creating a potentially huge market for ebooks.
"A year from now, Amazon will be synonymous with Android on tablets, a strong second to Apple's iPad," Rotman said.
But other tablet makers' experience in trying to challenge the iPad suggest that it may be difficult. Hewlett-Packard, one of the world's biggest technology companies, abandoned its TouchPad tablet after it had been on sale for just 48 days, taking writedowns on stock that are believed to have cost millions as it slashed prices to around £100. And the BlackBerry maker RIM, whose seven-inch PlayBook tablet runs its own QNX software, has seen slow sales since its launch, with just 500,000 sold in the three months to May, when it last reported its results.
Meanwhile testers of Apple's iOS5, the upcoming version of its software powering the iPhone and iPad, said the new iTunes Match service announced in June by ex-chief executive Steve Jobs, allows users both to download copies of songs from their collection, or just listen to them without downloading if they wish.
iTunes Match works by first scanning the user's music library that resides on their principal computer. Any songs that already exist in Apple's master library are then immediately available to stream or download to another device such as an iPhone or iPad; songs which Apple does not sell are uploaded and become available later. When Jobs announced the service in June he only mentioned the downloading capability – but Apple may have since signed licences which allow it to add streaming.
The $25-per-year service competes in the US with offerings from Amazon and Google, but those require users to upload their songs manually to Amazon's or Google's servers, though Amazon's already includes any songs bought from the site. By contrast iTunes Match includes any song on the computer, whether paid for or not – so that it has been seen as a form of amnesty for people who downloaded songs illicitly from filesharing services, while bringing in money for the record labels through Apple's licensing.
"All your music – up to 25,000 songs – will be accessible from your various computers and iOS devices," said Arnold Kim of the MacRumors site. "What wasn't clear before is that music can be either streamed or downloaded. This [streaming option] means your music library won't need to take up valuable space on the device itself, as long as you have some sort of internet connection."
However Apple has given no date for the launch of iTunes Match in the UK. Nobody at Apple UK could be reached for comment on Tuesday at the time of publication.
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Source: http://www.guardian.co.uk/technology/2011/aug/30/amazon-apple-ipad
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