A few years ago, people laughed at Amazon’s Kindle, especially its clunky hardware design and CEO Jeff Bezos’s breathless rhetoric about how it would change how customers bought and experienced media. Now that we’re getting closer to the unveiling of Amazon’s long-rumored, slickly designed multimedia tablet, nobody’s laughing any more.

Amazon has swiftly become the most disruptive company in the media and technology industries. Its potential in this space is simply off the charts: bigger than Apple’s, bigger than Google’s or Microsoft’s. It’s becoming a purer version of all three.

Amazon’s competitors are mostly software companies focused on a small number of tent-pole products that they then market to consumers or enterprise. Amazon is a company focused on selling anything and everything, from mass-market paperbacks to infrastructure-as-a-service, or IaaS. In order to do that, it’s become a major technology powerhouse, from shipping, sourcing and logistics in its warehouses to the software that powers its web site and e-readers.

The Kindle isn’t a book. It’s a bookstore. The Kindle tablet extends that principle further, by making it a retail portal and showcase for everything Amazon sells, whether physical or virtual.

It’s a mistake to underestimate where Amazon could take this, or to try to put the company in a box. Even though I’ve been pretty bullish on Amazon over the last few months, I’ve been guilty myself of underestimating what it might do.

A year ago, writing for Gadget Lab, I was curious but skeptical about early rumors of an Amazon tablet:

On the one hand, again — Amazon sells a lot of digital products online, not just e-books: movies, games, music. And it’s not hard to make an Android tablet. In fact, at this point, Amazon has more hardware-production experience with the Kindle than some of the companies that are coming forward with pretty solid [Android tablets]. Add an App Store and it starts to look pretty appealing.

On the other hand, Amazon’s built up good brand identification with the Kindle, e-books and E Ink. Will it turn around and say, “oh yeah, multimedia tablets are really awesome, but not, um, more awesome than a Kindle, I mean, um, why not buy both?” Just seems a little surprising.

Three things changed my mind:

1. Anecdotal evidence and empirical research that showed tablets were eating into the netbook market much more than dedicated e-readers.
2. The Nook Color showed that there were alternate paths to win in the tablet market, other than becoming an OEM for Android or Microsoft or trying to go head-to-head against Apple’s iPad. You could go big like Apple or go home with a very tailored experience like the Nook. In particular, it showed that companies with a strong emphasis on book and media sales were best positioned to do this, or to try some hybrid or variation on the two.
3. I interviewed Richard Linevsky, president of Catalogs.com, who’d just introduced the company’s new iPad app.

It was a little story, but it helped me realize what a perfect machine the iPad had become for selling any kind of product. Not just the apps and movies and music Apple was pushing through. Anything. Everything a digital retailer like Amazon might sell.

You sit on the couch and flip your fingers across the screen like you were thumbing through a catalog or a magazine. But every image and advertisement is connected to a digital store, powered by Amazon. With one click, you’ve bought it: Either it’s delivered to your machine immediately, over the air, or is delivered to your door in less than two days.

It’s the realization of Steve Jobs’ harsh but prophetic vision of the future of the web, voiced in this 1996 Wired interview, a vision he later brought with him to Apple:

Wired: What other opportunities are out there?

Steve Jobs: Who do you think will be the main beneficiary of the web? Who wins the most?

Wired: People who have something –

Jobs: To sell!

Wired: To share.

Jobs: To sell!

Wired: You mean publishing?

Jobs: It’s more than publishing. It’s commerce. People are going to stop going to a lot of stores. And they’re going to buy stuff over the Web!

At that time Jobs was busy at NeXT refocusing his company on building software modules to make it easier for companies to deliver software applications for retail sales, building up the web infrastructure in much the same way that Apple did with iTunes and the App Store, and Amazon has done with AWS. In his introduction to the interview, Wired’s Gary Wolf wrote:

The new Steve Jobs scoffs at the naive idealism of Web partisans who believe the new medium will turn every person into a publisher. The heart of the Web, he said, will be commerce, and the heart of commerce will be corporate America serving custom products to individual consumers. The implicit message of the Macintosh, as unforgettably expressed in the great “1984? commercial, was Power to the People. Jobs’s vision of Web objects serves a different mandate: Give the People What They Want.

Unless those “people” are states looking to collect sales tax or affiliates caught in the middle, it’s hard to think of a better guiding principle for Amazon today.

Continue reading “Amazon’s Future Is So Much Bigger Than a Tablet”…

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