They may have really messed up with their Android tablet strategy.

Back in March, I postulated the KindleDroid, a potentially massive move by Amazon into the tablet world. But if the rumours from TechCrunch are accurate then Amazon has missed the bull’s-eye… they may not even be on the paper.

I was hoping for a 10” with almost no bezel and it looks like we’ll have to make do with a 7” and wait until next year for the bigger display. That isn’t a deal breaker.

It is also a regular capacitive touch, backlit LCD with all the visual goodness and power consuming badness that goes with it. This too is not a deal breaker as long as the battery lasts at least ten hours… although the 50 that I guessed at for a colour e-ink display would have been nice. What would be really nice is if they bring some Touchco love to the tablet and give us pressure sensitivity and optional stylus goodness.

The word is that the Kindle Fire will sell it for $250- which is pretty damn nice considering that I was guessing at $100 less than the cheapest iPad 2 and this is $250 less… half the price of the least expensive product from Apple! I am sure that Apple won’t just roll over and let them have that big a price advantage but given the big problem I bring up below, they can probably get by with cutting the entry level iPad 2 by $100 not $250.

I don’t think they have to beat the $249 price tag of the Amazon Kindle because Amazon has crippled the device and fractured the Android market to boot.

That is the deal breaker- they’ve forked Android.

Amazon looks to be building their tablet on an obsolete version of the Android OS with a layer of proprietary Amazon bolted onto it that will ghettoize their customers.

There is very little they could have done to mess up the tablet but this is at the top of the list. The HP TouchPad and RIM PlayBook screwed up by trying to force yet another tablet OS on the user. Right now we have Apple’s iOS and Android and any different OS has to be a massive improvement or it is screwing the customer- not just different for difference sake. The Amazon tablet looks to be different simply for the sake of locking the customer in.

I’m not saying that it will backfire on them hard, but it should if the customer is even a little bit more savvy than Amazon gives them credit for.

I am sure that Amazon crunched the numbers pretty hard to figure out how much they would sell through a captive KindleDroid and how much that would allow them to subsidize the per unit sales price. My bet is that they figured that forking Android OS and locking the customer in was the only way for them to wiggle the price down to $250. They may think that this will allow them to corner a bigger percentage of the market and that was justification enough for them spend millions of dollars crippling the system.

Problem #1: It will only run apps that are specifically coded for an old, forked version of the Android OS with their additions. I am sure the app developers are overjoyed that, if they want their apps to run on the Amazon tablet, they will have to rewrite their old apps and dual stream the coding of their new apps. The Amazon customer will get a subset of available apps unless they take advantage of “Problem #2”.

Problem #2: It will take a whole day or three for the hackers to jailbreak the Amazon Kindle so that it will run an up to date version of the Android OS. How much money are they going to lose with tens of thousands of people buying the subsidized tablet just to set it free with the current version of Android OS?

It would have cost a fraction of what they spent if Amazon had just skinned and integrated their system on top of a fully functional and up to date version of the Android OS. There would be no fracturing of the market and no incentive to root their tablet.

Amazon gives great service and they are set to become even better- so it puzzles me why they thought they had a need to try and lock their customers away from any competing services?

Jeff, if you still have any influence in the boardroom, you might want to tell the bean counters that they are screwing your customers- trading long term growth for short term profits.

Unless of course you feel that both iOS and Android OS are doomed by the full OS with tablet integration? We will get Windows 8 next year and unless Apple has bought into their own marketing (it’s happened), they will do at least as good a job as Microsoft integrating a touch interface into the next integer upgrade of the MacOS.

Amazon’s strategy might make sense as a rear guard action against the next three to five years of market near-chaos as the limited capability tablet OS is subsumed back into the full OS. It isn’t in the best interests of the customer but Amazon might think it will help them better weather the storm.

I may well end up buying both the Amazon Kindle and the iPad 2 (or 3) just to ensure that my e-books work as cleanly as possible on both platforms.

That in itself is an indictment of how Amazon and Apple are treating their sheep customers.