Google Gets in Amazon's Line of Fire to Beat Apple

NEW YORK ( TheStreet) -- The technology sector appears to be abandoning an old working concept, one akin to the separation of the branches of government. For years it's been understood that OEM partnerships was the effective model -- which is to split the makers of hardware from those that specialize in software. That's the way it had to be. With the exception of Apple ( AAPL), nobody has been able to do both successfully or take advantage of a unified platform.

However, seeing as Apple is outperforming by being its own hardware and software supplier, its rivals have started to mirror that model and hoping for similar results. But will it work? I think that's a bit premature for anyone to say. However, at the very least, just having a unified platform without the right visionary does not necessarily guarantee success either -- just ask Research In Motion ( RIMM), which is now on the verge of suffering the same death as Palm while both had the Apple-like benefit of their own. Clearly there is more to it than that. Nonetheless, that's not enough to stop others from trying.

Every man for himself

In a span of only a couple of weeks, two dominant software companies appear to want to enter the realm of hardware. First it was Microsoft ( MSFT), which announced its Surface tablet while essentially saying to its partners it is now every man for himself. The company realizes that its own survival should now depend solely on its own success -- I agree.

It seems Microsoft has grown tired of taking the blame for equipment that is considered unappealing, especially since it does not have its logo on it. Though this move presents the risk of possibly alienating its current PC partners in Hewlett-Packard ( HPQ) and Dell ( DELL), I don't think anyone can blame it for moving in this direction. I think this is an appropriate route as opposed to continually relying on consumers accepting hardware that may or may not be up to par with what Apple is putting out. We'll have to wait and see how this goes.

Next it was search giant Google ( GOOG) that announced a tablet of its own called the Nexus 7, a device designed specifically for its online store which sells music, movies, books and various content. If this sounds similar to Amazon ( AMZN), it was not by accident. Amazon, which launched its highly successful Kindle Fire last year, has become an immediate threat to Apple's iPad to the extent that it has many analysts speculating that Apple will soon respond with a smaller version tablet of its own. While the Fire lacks several of the features of the iPad, its $199 price has proven to be a very attractive trade-off.

Google, on the other hand, has been watching from the sidelines. Though it's been benefiting from each Fire sale since it licenses its Android OS to Amazon, it seems that it is no longer satisfied with this arrangement. Clearly it realized how quickly Amazon was not only able to enter the tablet space, but it immediately became relevant. So as with Microsoft recently, in addition to being an Amazon partner, by releasing the Nexus 7, now Google just might have also become its biggest rival. So again, the new model appears to be "every man for himself."

Google, which priced the Nexus 7 at $199, said it will begin shipments in the middle of July. But it will be interesting to see what effect it has on sales of the iPad, which starts at $499. However, I don't think Google has its sights set on Apple at this point -- at least not yet. It's just like being in a pennant race. It first needs to secure the third or second spots within the category before it can start looking up at No. 1. To do this, it has decided that it is worth risking its partnerships with not only Amazon, but also Samsung, whose $250 Galaxy tablet runs on its Android platform, has been the only true test to the iPad so far.

Bottom line

So the question is, how will both Samsung and Amazon deal with this new rivalry? Will they both get sensitive and develop some insecurities as both Dell and Hewlett-Packard demonstrated on Microsoft's news? If so, will Google care? I don't think it should, and nor should loyalty ever trump that which benefits consumers -- innovation and free enterprise. Though I don't think it will make a significant dent in the iPad, I think Google deserves a considerable amount of credit for making this move. On the other hand, Amazon and Samsung both have a lot to be worried about.

At the time of publication, the author was long AAPL and held no positions in any of the stocks mentioned, although holdings may change at any time.