Amazon’s Ad-Supported Tablet: What Took So Long?

The current Kindle Fire

From my Forbes.com blog The New Persuaders:

Ever since the first, rather expensive smartphones came out five years ago, I wondered: Why not offer cheaper ones supported by advertising? After all, even if you’d prefer not to see ads, you’re already taking a subsidy from a wireless carrier that often entails (I’m talking to you, Verizon) carrier widgets and interface limitations than are far more onerous than any advertising.

But since then, the only ad-supported portable devices that I can think of, at least that are still around, are Amazon.com’s Kindles with Special Offers. Now, however, the Wall Street Journal says Amazon may debut an ad-supported new 7-inch tablet as a followup to now sold-out Kindle Fires, as a way to offer a lower price in an increasingly competitive tablet market. The tablet could come as part of an expected Amazon launch of new tablets on Sept. 6.

The tablet apparently would display an ad as the device “wakes up.” The story mentioned no specific price break. The Special Offers Kindles offer a $30 to $50 price break, which if applied to the current Kindle Fire price of $199 would come in as low as $149. That would provide a considerable discount from Google’s Nexus 7 tablet, whose key appeal since it debuted in mid-July has been its low price.

Apple also is expected to come out with a similarly sized iPad Mini this fall, that could be priced as low as $249. However, Apple’s brand would still make a higher-priced device appealing to many people.

Assuming the ad-supported Amazon tablet actually launches, what took so long? Well, for one, tablets are still a pretty new category, so perhaps it just took awhile to work out the economics. Also, it’s possible that the ad formats on each tablet have to be so unique that it’s hard to get marketers interested at a more than experimental scale. Not least, a lot of people may figure that if they’re already paying a couple hundred dollars or more for a device, having to watch ads as well is a step too far.

But given that the three key tablet combatants today–Apple, Google, and Amazon–each are already in the ad business to varying degrees, and as it becomes clearer what kinds of ads work best on mobile devices, I wouldn’t be surprised to see more ad-supported models before long.

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