While it is well behind Apple's
Google is planning to rock the tablet boat with its very own tablet powered by its proprietary Android operating system. The device is likely to be manufactured by Asus, but there is also the possibility of Google manufacturing it. The company would probably want to make good use of its $12.5 billion acquisition of Motorola Mobility Holdings and dump cheap tablets.
Will Google's entry change the competition meaningfully? On first impression, I would say no. Google attempted to take on the tablet market earlier, but it moved nothing. However, the search giant has two things working for it: a big brand and a diversified supporting ecosystem, and it makes sense to take a deep dive.
It's safe to assume that Apple is not a real competitor given Apple caters to the high-end market segment, while the Kindle Fire is targeted at the lower end. The quality and features make Apple a different beast altogether. Then there are Sony and Samsung, which are playing the price game.
Amazon has managed to successfully keep competition at bay with its $199 price tag and an enviable ecosystem. Kindle Fire features its own highly customized Android app store, ebooks, movies, music, and other customized software and services. It creates a highly connected digital lifestyle around its products and services, much like Apple. Let's call it the Amazon advantage.
And that is exactly what Google is planning to puncture. Its sharp tools include a well-known brand; Google Play, which offers e-books, movies, music, and an app store; services like search and maps; reasonable cross-integration; and an expected price tag of around $200. Beat that! This makes me think that if Google comes out with high-end tablets at a similar price range, the Kindle Fire may feel the intense heat.
All said, I believe execution is the key. Google is still in the process of integrating its products and services and many others are doing the same. Sony is one of them and is closer to home than Google. I am not putting Amazon on the block yet, but I am not writing off the Google challenge. I will keep a close eye on the situation. Add Amazon to your free watchlist if you want to track it.
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Fool contributor Keki Fatakia does not hold shares in any of the companies mentioned in this article. The Motley Fool owns shares of Google, Amazon.com, and Apple. Motley Fool newsletter services have recommended buying shares of Apple, Amazon.com, and Google, and creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.