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Beating Expectations: A Short History of Amazon's Future Tablet

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Beating Expectations: A Short History of Amazon's Future Tablet

This is a mockup. There are many like it, but this one is mine.

On Wednesday, Amazon is holding an invitation-only press event in New York. It starts at 10 a.m. Eastern. We’ll be there. Nobody thinks they’re coming to write about anything with an E Ink screen.

We’re expecting Amazon’s long-awaited media tablet, running a custom build of Android’s open-source operating system. The best reports suggest the following:

We can also expect Amazon to trumpet its Android Appstore, its recent deal with magazine publisher Hearst, the new tablet-optimized version of the retail store, and likely still more.

Rumors have been swirling about just which publishers, studios and other creative companies have already inked deals with Amazon, and whether these agreements will be announced at the launch. All of these companies have learned the lesson that a tablet can have gorgeous hardware with great specs, but still fail to catch on. Most tablets haven’t even gotten that far.

These are casual, consumer media devices. The package matters less than its ability to deliver the contents. At least, this is what Amazon and its partners hope. So far, Android tablets, particularly the seven-inch models Steve Jobs famously called “tweeners” on an Apple earnings call last fall, have failed to captivate buyers the way that Apple’s hugely successful iPad has.

Amazon has several advantages over other tablet manufacturers that have tried to compete with Apple. It has an established, built-in audience of loyal customers, whether of the Kindle, its e-books or the wide range of retail goods it sells. All of these give Amazon better brand recognition and loyalty than any comparable manufacturer except perhaps Apple, at least in the United States.

Amazon also deals in a wide range of other media perfectly suited for tablets, including video, magazines, games and apps. It’s customizing Android and its Appstore specifically for its own tablet hardware, potentially solving the fragmentation problem that’s plagued Android on smartphones and tablets.

At the same time, using Android as a base (and as a retail portal) makes developing for the new tablet or tablets much easier. Amazon hasn’t had to burn through cash developing an OS from scratch or buying one outright. Its cross-licensing agreement with Microsoft most likely insulates it from the patent lawsuits that have cost other Android manufacturers dearly.

Finally, Barnes & Noble’s Nook Color showed that customers do want smaller tablets if they can deliver quality media at a low price. Even Hewlett-Packard’s TouchPad death-and-resurrection debacle shows that there’s pent-up demand for a multi-function tablet that’s much less expensive than the iPad.

Here, too, Amazon is perhaps uniquely situated to deliver what customers want. Because the company sells so much digital media, and certainly intends to use the tablet to sell still more, Amazon can afford to sell its tablet at or below cost — reportedly as low as $250. If Apple was once content to support digital music because that in turn would sell more iPods, Amazon is coming at the market from the other direction: offer the razor/tablet cheap, and make money selling the blades/books, music, movies and apps.

So if Amazon is indeed so well-positioned to make and sell millions of copies of a great multimedia tablet, why has it taken so long? And what could still go wrong?

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