Who would be hurt most by a $199 Nexus tablet – Apple, Amazon, or RIM?

Google will reportedly introduce the cheapest major tablet on the market later this year. The tablet wold pose a serious threat to at least one company.


Rumours of a “Nexus Tablet” have spread since 2011, and an anonymous supply chain executive told AndroidAndMe.com that a sub-$200 tablet from Google is now a “done-deal.”
There’s still much to be discovered about this supposed device, but if Google does manage to deliver a high-quality tablet pc at an affordable price, targeted at $150 to $199, which company will be most affected?

APPLE

The hysteria surrounding today’s release of the new iPad confirms that Apple has nothing to worry about for the foreseeable future. Apple sold more iPads in the last three months of 2011 than the combined total of Android Honeycomb tablets sold in all of 2011. A low-cost tablet that doesn’t feel like a low-cost tablet might make future tablet buyers think twice about an iPad, but a massive number of consumers want the apps and experience fostered by Apple. The iPad unequivocally owns the tablet market and will likely do so until something dramatic happens to threaten its dominance.

AMAZON

Amazon's Kindle Fire, not currently available in Canada

The real threat that a Nexus android tablet poses is to Amazon and RIM. Amazon’s Kindle Fire is a certified hit with an estimate 5 million sold. The Kindle Fire is only available in the U.S, but Amazon has plans for the device to spread globally. The only thing holding it back is that the Fire is designed to be a consumption device for Amazon’s books, movies, music, and app store. Licensing deals prevent it from expanding outside the U.S at the moment, so it doesn’t make sense to sell the Kindle Fire, which sells for less than what it costs Amazon to manufacture, if Amazon can’t sell movies and music to buyers.
Google on the other hand has, or is aggressively pursuing, content deals for more countries. If it manages to deliver a sub-$200 tablet before Amazon can expand internationally, that would be huge. Why would someone get a Kindle Fire, which runs an older version of Android and doesn’t have a tenth of the apps and games available in Google Play, if they are the same price? The reason the Fire has been so successful is Amazon’s content offerings and its low price in comparison to other tablets. A Nexus tab would at least be on equal footing with the Kindle Fire, and it would probably have better software and hardware to eat away at both advantages for Amazon’s device.

RIM

RIM's BlackBerry PlayBook is selling well at its $200 price point.

As for RIM, things could get even bleaker. The BlackBerry Playbook’s struggles have been well documented, but praise for the 2.0 software version and price drops are seen as ways to increase popularity. However, a Nexus tablet could match any price drop and hit RIM where it hurts most – enterprise.
BlackBerry is synonymous with business, but many corporations are increasingly turning to Android and iPhones. Tablets are also rising in popularity, so these are two trends working against RIM. Part of the appeal of the PlayBook as an enterprise device is the integration with BlackBerry phones, but that might not be enough, especially for companies that let employees choose their own devices. It’s hard to invest in Playbooks, which costs more and don’t integrate as well with the phones employees prefer, when a stack of Nexus tablets can be purchased at affordable rates. One could easily make an argument about which OS is best, but the low costs and high rewards of a Nexus tablet might hurt RIM in enterprise. It will severely hurt RIM in the consumer market.
There’s no guarantee that a low-cost Nexus tablet will debut this year and wreak havoc on the tablet market. But since I’m familiar with the writer starting this rumour and he has been accurate in the past, I’m going to put faith in the notion that Google will seek to undercut its rivals later this year. When that happens, Amazon and RIM will face a serious threat for the runner-up position in the tablet market. Considering the low price, even Apple might have to look over its shoulder.