Amazon Prepares Kindle For China
Some 6 months after buzz first emerged that Amazon (Nasdaq: AMZN) could soon bring its popular Kindle tablet PCs to China, media are reporting that the product could finally make its debut in the market next month. I’ll be frank in saying that Amazon is coming to the China tablet PC market a bit late, as the space is already quite competitive due to the earlier arrival of Apple’s (Nasdaq: AAPL) iPad, along with tablet offerings from Samsung (Seoul: 005930) and homegrown giant Lenovo (HKEx: 992). But that said, I would also say there’s still no clear leader in the space, meaning Amazon could quickly grab some market share if it makes the right moves.More broadly speaking, the introduction of Kindle would mark Amazon’s latest step to boost its presence in China, following a major ramp-up over the last 2 years for its core e-commerce business. Unlike most of its rivals, which either focus on consumer electronics or e-commerce, Amazon actually focuses on both areas. That could ultimately play to its advantage over rival tablet PC makers like Apple and Samsung, since Amazon will be able to use its e-commerce platform to promote and provide products for the Kindle.
The buzz surrounding Kindle first began in December last year, when Amazon quietly opened a Chinese-language Kindle store on its China site. (previous post) It concurrently offered software to make products on the site readable by other tablet PCs, since the Kindle wasn’t yet being sold in China at that time. But the move sparked intense speculation that a formal launch for the Kindle in China was likely to occur sometime in 2013.
Last year’s Kindle store launch quickly drew some controversy, as the site reportedly clashed with China’s publishing regulator just a week after its low-key opening. (previous post) Reports at that time didn’t go into much detail, simply citing the regulator saying the site violated Chinese rules. I predicted then that the tussle looked relatively minor, and that Amazon would quickly resolve the problem to comply with the regulations. A quick look today at the site shows that the Kindle store is indeed still open, though it’s listed as a trial product and isn’t featured on Amazon China’s homepage.
All of this does seem to indicate that the latest reports saying that Amazon will formally launch the Kindle in China on June 7 are most likely true. (Chinese article) The reports, which cite an unnamed source, say Amazon is partnering closely with electronics retailing giant Suning (Shenzhen: 002024) for the launch, and that both Amazon and Suning will be the exclusive sellers of the Kindle through online channels. They say Suning and other major retailers will also sell Kindles in their traditional stores.
As I’ve said above, I do think that Amazon should have a reasonably good chance to quickly grab some major share of China’s tablet PC market. Apple’s iPads are already a leading player, banking on strong support from Apple’s own China app store. But the iPad’s image suffered during a bitter trademark battle last year, and Apple’s image in general has also suffered as the result of a series of attacks in the Chinese media. Samsung, Lenovo and Microsoft (Nasdaq: MSFT) also sell tablets in the market, though none has been particularly dominant in the space.
Amazon, on the other hand, has strong brand recognition already and the Kindle is a relatively well known product due to its popularity outside China. Assuming Amazon doesn’t do anything to upset Beijing or anger Chinese consumers, I could see the Kindle launch generating relatively strong buzz and getting a positive reception. Accordingly, I wouldn’t be surprised to see Amazon’s share of the tablet market quickly grow to perhaps as much as 20 percent by the end of 2013.
Bottom line: Amazon could quickly grab up to 20 percent of China’s tablet PC market following the local launch of its Kindle next month.
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