Why Amazon Keeps Making Tablets When the Market Is Struggling

Because it can be converted into a portable Echo device with Alexa always recording your becks and calls.

The gadget is meaningless. But the electronic ecosystem into which it feeds the user and her data, is the key to dominance. JL


Hayley Tsukayama reports in the Washington Post:

Sales of tablets will drop 12% this year and revenue for those sales will drop 13%, extending several quarters of steady decline. (But) Amazon has found a way to make Alexa, and your connection to Amazon, mobile. Tablets now have Alexa voice control, allowing you to interact with them as you would with the Echo or Dot. And that mobility is key, since Amazon doesn’t offer a smartphone like Google and Apple. The Alexa integration enables a user to take the tablet between home and work."They're essentially giving them away." With Amazon tablets, you never have to be without Alexa.

The tablet, as a gadget, hasn’t had a great couple of years. The Consumer Technology Association, the tech industry group, expects that sales of tablets will drop 12 percent this year and revenue for those sales will drop 13 percent, extending several quarters of steady decline. The main bright spot in the market has been high-end laptop replacements, such as the Microsoft Surface or iPad Pro, with detachable keyboards. The familiar slate design has all but gone to collect dust in many minds.

That is, except at Amazon.com. There, tablet sales seem to be growing, and the products remain an integral part of the company’s strategies for selling its goods and services to consumers. Amazon ended 2017 as the world’s second-largest tablet maker, behind Apple, having overtaken Samsung during the holiday season, according to International Data Corp., which tracks tablet shipments.

Last week, the online retail giant released a new version of the Amazon Fire, the Kids Edition HD 10, a durable 10-inch tablet aimed at children, for $200. It also released a $40 dock that lets tablet owners put their devices into “Show Mode,” turning them into a screen that acts more like a small television for watching on-demand video, which you can control with your voice.

(Amazon CEO Jeffrey P. Bezos is the owner of The Washington Post.)

Amazon doesn’t release sales figures, but analysts at IDC said that last year the company’s tablet business grew 50 percent in the holiday quarter, when it makes most of its tablet sales. Compare that with Apple, which IDC estimates saw just 0.6 percent growth at that time, or Samsung, which saw its market share decline by 13 percent from the previous year.

One likely reason behind Amazon’s success is that its tablets are inexpensive. A basic iPad will cost you $329; Amazon’s comparable tablet comes in at $150. Those prices are so relatively low that it may be easier to justify buying one to watch YouTube videos in the kitchen or to hand to the kids as a gadget of their own before buying them something pricier. Amazon is essentially the only major manufacturer going for the cheap end of the market right now, and it tends to push tablets with big discounts in the last half of the year, first with its Prime Day shopping holiday in July and then into the holiday season.

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“They’re essentially giving these devices away for half of the year,” said Lauren Guenveur, an analyst for IDC.

But a relatively cheap price doesn’t sell a device all on its own. Amazon has also doubled down on pushing tablets as an entertainment experience. Take Show Mode. The feature allows you to watch content on your tablet on an ideal screen. “If you look at the usage on tablets, they’re essentially a television replacement,” Guenveur said.

Tablets also provide an alternative to dedicated Alexa devices, such as the Echo, she said. The Fire HD tablets now have Alexa voice control, allowing you to interact with them as you would with the Echo or Dot. That means Amazon has found a way to make Alexa, and therefore your connection to Amazon, mobile. And that mobility is key, since Amazon doesn’t offer a smartphone, as its main voice-assistant rivals, Apple and Google, do.

In an interview with The Washington Post, Allen Hughes, Amazon’s director of sales and marketing for Fire tablets, noted that customers who have bought any of the many other Alexa products — Echo, Show, Look, Spot, Dot — have to set up the devices in a static spot. “Now,” he said, “you can move from room to room” with your tablet and set up Show Mode docks around the house to take you from couch to nightstand without missing a beat. The Alexa integration also enables a user to take the tablet between home and work, he said.

With Amazon tablets, you never have to be without Alexa. And that’s exactly what Amazon likes to hear.