Let's say you browse the Amazon.com website looking for a book, a wristwatch or a muffin pan. When you find the object of desire, you click an "Add to Cart" button. Amazon already has your credit card and address, so it's easy for you to buy and for them to sell. The cardboard box your item arrives in is the physical manifestation of Amazon's fulfillment of your order.

Boxes are important to Amazon's business. But they're not in the box business. They don't make money on boxes. Amazon is happy to lose a little money on boxes because it enables them to profit from what's inside the box.

To Amazon, a is just another kind of box.

Electronic products like music, movies, e-books and digital publications are part of Amazon's business. An e-book is an item for sale, just like a paperback. And Amazon wants to control the order-fulfillment experience just like it does with cardboard boxes. So it makes tablets.

You can divide the tablet universe into three categories: 1. Companies that are in tablet hardware and online content and services businesses; 2. Companies that are in the online content and services business only; and 3. Companies that are in the tablet hardware business only.