Amazon is apparently getting into the tablet business, or so say several sources. My own view is that Amazon is going to compete with the Barnes & Noble Color Nook, a product that I’ve gotten myself and find enormously interesting, powerful and helpful. The issue here isn’t becoming a tablet player, it’s defending the ebook space against a competitor that’s using a tablet feature set to enhance e-reader value. Every Nook that’s sold is a B&N camel’s nose under the ebook opportunity tent. Amazon can’t sell Kindle books to that market, and of course B&N profits from the lock. So Amazon has to become a player in what I’ll call the “t-reader” space, a space that is almost a tablet but that lacks the ability to host competing e-reader software and so still locks the consumer in as a traditional e-reader would.
Amazon needs to make sure that it doesn’t lose customers to the Color Nook because it needs to be sure that it doesn’t let B&N create a legion of book-hungry semi-tablet enthusiasts that can’t get Kindle without rooting their Nooks.
The question is whether they can do something at this point, when the B&N device is already out there and competing effectively, without giving away too much and hurting their profits even if they win the t-reader race.