I'm merely pointing out that this might not be the best situation. I'm not proposing any intervention or anything like that. I'm merely pointing out that we may find that we have fewer tablet vendors in 5 years than we have today - the opposite situation from what we would want to happen.
In terms of the Amazon tablets, they are selling them at cost (they've explicitly said this) and it will take time to see whether they make back the money they spend on shipping, warehousing, R&D, etc. via content. It may be a model that others adopt to provide competitor tablets. It could also lead to a duopoly of Apple and Amazon on tablets. That would be bad. It could lead to Amazon getting further leverage over publishers and consumer prices. Also bad.
The thing is that bad behavior isn't without precedent. Standard Oil sold at below cost in a market to make the competition exit. When the competition was gone, they would raise prices significantly. So, in the short term you could get cheaper gas, but in the long run, you removed the competition. And sometimes we do regulate bad behavior. We did it with Windows and in the absence of Android, we might be considering it against Apple.
I'm not saying that I'm a fan of intervention or that companies can't attempt a console-style business model for tablets. I'm just suggesting caution in a developing industry that many see as a future of computing: one where we'll want competition and innovation, not for most players to exit before it even takes off. Low prices are a good thing, but let's not get ahead of ourselves and happily applaud low prices into an oligopoly. We want cheap prices that can be sustained and innovated on. Maybe these tablets are going to hit that. But there are some signs that might not be the case given LG's exit, the fact that Moto and HTC don't have recent offerings, the general mediocre financials of Amazon, Moto, HTC, LG, and Asus, etc. Then again, maybe that will turn a corner in the near future and I'm worrying for nothing and we'll have an awesome, cheap, competition-filled future.
In terms of the Amazon tablets, they are selling them at cost (they've explicitly said this) and it will take time to see whether they make back the money they spend on shipping, warehousing, R&D, etc. via content. It may be a model that others adopt to provide competitor tablets. It could also lead to a duopoly of Apple and Amazon on tablets. That would be bad. It could lead to Amazon getting further leverage over publishers and consumer prices. Also bad.
The thing is that bad behavior isn't without precedent. Standard Oil sold at below cost in a market to make the competition exit. When the competition was gone, they would raise prices significantly. So, in the short term you could get cheaper gas, but in the long run, you removed the competition. And sometimes we do regulate bad behavior. We did it with Windows and in the absence of Android, we might be considering it against Apple.
I'm not saying that I'm a fan of intervention or that companies can't attempt a console-style business model for tablets. I'm just suggesting caution in a developing industry that many see as a future of computing: one where we'll want competition and innovation, not for most players to exit before it even takes off. Low prices are a good thing, but let's not get ahead of ourselves and happily applaud low prices into an oligopoly. We want cheap prices that can be sustained and innovated on. Maybe these tablets are going to hit that. But there are some signs that might not be the case given LG's exit, the fact that Moto and HTC don't have recent offerings, the general mediocre financials of Amazon, Moto, HTC, LG, and Asus, etc. Then again, maybe that will turn a corner in the near future and I'm worrying for nothing and we'll have an awesome, cheap, competition-filled future.