|From the Amazon web site|
For the longest time - 15 or so months actually - there has been hype about competitors to the 800lb gorilla in the tablet market, Apple iPad. The iPad has sold almost 30 million tablets so far, and is on track to sell close to 10 million tablets in the last quarter of this year.
Most competitors have fallen to the hubris of going after the iPad with premium pricing, unwilling to think of their products as having to compete on price. This vanity has seen at least two major vendors fail in the tablet market, or at least have to contend with sales figures that pale in comparison to the iPad.
For several weeks there were rumours, nay, there was a deluge of rumours of Amazon building a tablet. This tablet, even before any credible details were known, was pitched as yet another in the long line of wannabe competitors to the iPad. The first clues that Amazon may well be serious about the tablet market emerged when it was, yes, rumoured again, that the price would be $250 or thereabouts.
Today Amazon had an event where they announced four products:
Kindle Touch - at $99, Kindle, Wi-Fi, 6", at $79, and Kindle Fire - at $199. The Kindle Fire is a full-color tablet with multi-touch capabilities, and the $199 price undercut even the most aggressive rumours that had been floating about the Kindle.
What is clear is that Amazon believes that wafer-thin margins, coupled with Amazon's massive customer database, legendary customer-focus, and targeted content will make the Kindle Fire a blockbuster hit. Because customers will have easy access to the Amazon store, they will likely buy more. This is what Amazon has seen with its Prime membership - a fixed price of $79 per year entitles the customer to unlimited 2-day shipping, with no minimum purchase required. Sales have exploded because the $25 barrier to free shipping was eliminated. Impulse shopping no longer had to wait for the $25 threshold to be breached. Gratification came via free shipping. Amazon hopes the same will happen with its tablet. Of course, wafer-thin margins and cross-subsidization is to be expected.
It remains to be seen how Apple will respond to this new, and very credible threat to its iPad franchise. The iPad has an incredible amount of mindshare as well as marketshare, not to speak momentum, so any impact to the iPad will not be felt for at least a couple of quarters. Furthermore, lack of 3G means that the Kindle Fire's impact in the enterprise segment will be limited, since business users will demand 3G connectivity, not to speak of access to business apps available on the Apple iTunes App Store. Nonetheless, given how fierce a competitor Apple is, they will certainly be taking a very, very close look at the Kindle Fire.
If the Kindle Fire is successful, it is a given that Apple will introduce the iPad or something similar in this screen size. Apple has a hugely successful product in the iPad at a 10 inch screen size. Their hardware contracts and the contract manufacturer's factories are all tooled for churning out millions of 10 inch screens. If there is a market for a 7 inch tablet, Apple would have been silly to NOT disparage that segment till such time as it could bring out its own 7 inch tablet. And that is exactly what it has been doing, by calling 7 inch tablets "dead on arrival". If the Kindle Fire is successful, then Apple does not really lose much by introducing its own 7 inch version. Apple will surely gain some Kindle Fire customers by doing so, but it will also do so at the cost of cannibalizing its own 10 inch tablet. A 7" tablet from Apple will necessarily to be cheaper, and also have lower margins - therefore Apple would hurt Amazon for sure, but also at the cost of denting its own profitability. Apple is however orders of magnitude more profitable than Amazon, so it can afford a hit to its bottom line.
The new Kindle Touch has these new features:
NEW - X-RayKindle Touch, Wi-Fi, 6" E Ink Display - includes Special Offers & Sponsored Screensavers
Explore the "bones of a book". With a single tap, see all the passages across a book that mention ideas, fictional characters, historical figures, places or topics of interest, as well as more detailed descriptions from Wikipedia and Shelfari.
Light and Compact
Our all-new sleek design sports an 11% smaller body, with the same 6" screen size, and is 8% lighter, only 7.5 ounces.
Simple To Use Touchscreen
Kindle Touch features an easy-to-use touch interface. Turn pages, search, shop books and take notes quickly and easily.
Kindle, Wi-Fi, 6" E Ink Display - includes Special Offers & Sponsored Screensavers
Kindle Fire, Full Color 7" Multi-touch Display, Wi-Fi
|The new Kindles launched by Amazon, Sep 28 2011|
Media and analyst reactions (updated Oct 4 2011):
- Belkin, Marware Unveil Kindle Accessories : Page 1 of 1 : Dealerscope
Already the accessories are starting to arrive.
- Kindle Fire: why no welcome from Google? | Technology | guardian.co.uk
Forking the Android codeline is why Google is quiet about what could be the biggest Android tablet blockbuster this year.
- New Kindle Touch 3G removes access to most of Internet - CNN.comSort of makes sense, if you consider that browsing the Internet with the Kindle is next to impossible.
Amazon has clarified that the next generation of its 3G Kindle, the Kindle Touch 3G, will not be able to browse the Internet without a WiFi connection. Users will still be able to use 3G to sync book and document purchases, but anything beyond Wikipedia will be off-limits.
- The Amazon Kindle Fire May Kill The RIM Playbook - Forbes
How? By first "unkilling" it and then re-killing it? The Playbook is dead. If it ever reached anything more than comatose state to begin with.
- Kindle Fire on pace to outsell all Android tablets? — Mobile Technology News
No real surprise there, right?
- Pricier Kindle Fire orders outstrip other models | Nanotech - The Circuits Blog - CNET News
This is interesting, but note that the "pricier" Kindle Fire is still a measly $199; measly when compared with the Apple iPad, at $499. Yes, the Apple iPad is superior to the Kindle Fire, but this is not an apples-to-apples comparison that is happening, is it, to pardon the pun?
- How the Kindle Fire could make 7-inch tablets huge - CNN.com
Despite their being "dead on arrival", per Steve Jobs, it seems that they are not, after all. At least, one vendor's 7" tablets.
- Kindle Fire Preorders: 95,000 Units Sold | PCWorld
95,000 units pre-ordered the first day? Not bad. Not bad at all.
Media and analyst reactions (updated Oct 2 2011):
- Publishing News: Amazon vs barrier to entry - O'Reilly RadarAmazon's new Kindle Fire has the potential to disrupt the tablet space, but what Amazon did this week may actually be a much bigger deal with much broader implications: it lowered the ereader barrier to entry. And it lowered it on a mass-market level — at $79, the low-end Kindle arguably becomes an impulse buy.
- Amazon's New Kindles Will Explode the E-Book Market - Forbes
Between November of 2010 and May of 2011, the number of people in the United States who owned an e-reader doubled from about 6% of the population to 12% of the population, according to Pew Research.
But what’s interesting is that the Harris poll also shows that people who buy e-readers end up reading more books than they used to. I can attest to that – I credit my Kindle with getting me back to reading books. Owners of e-readers buy more books, and end up reading more. That’s a recipe for a lot more sales.
- Amazon's "Prime" challenger to the iPad - O'Reilly Radar
If you haven't noticed, creating and executing mobile platform plays is really hard. Just ask HP, RIM, Nokia and Microsoft.
- Amazon Publishing: How it controls whole book supply chain - Sep. 27, 2011
Amazon's low-priced bestsellers and Kindle e-reader are famous for changing the book industry. What's not so well known is how deeply Amazon's tentacles reach into all parts of the industry, including its growing interest in inking deals with authors to publish some of the hit books Amazon sells.
Booksellers and publishers are crying foul, saying they're being cut out of the chain by an aggressive Goliath. But some authors who have recently signed with Amazon Publishing say the company simply offered them a better, fairer deal than traditional publishers.
Media and analyst reactions (updated Sep 30 2011):
- Rough Type: Nicholas Carr's Blog: Beyond words: the Kindle Fire and the book's future Nicholas Carr has an expectedly contrarian and curmudgeonly take on the Kindle Fire, and not for reasons of its competitiveness vis-a-vis the Apple iPad.
The press coverage of the Fire has largely concerned its immediate commercial prospects: Will it challenge the Almighty iPad? But the real importance of the Fire is what it presages: the ultimate form of the e-book. Historians may look back on September 28, 2011, as the day the book lost its bookishness.
- PlayBook in trouble, if not dead, says analyst - Computerworld While not directly attributable to the Amazon Kindle Fire announcement, it highlights the state of most of the non-Apple tablet manufacturers.
Research in Motion's PlayBook looks to be in trouble, as it appears that the smartphone maker has stopped production of the tablet and is actively considering getting out of the business, says Collins Stewart semiconductor analyst John Vihn."We believe [RIM] has stopped production of its PlayBook and is actively considering exiting the tablet market," Vihn wrote in a note to investors. "Additionally, our due diligence indicates that RIM has canceled development of additional tablet projects."
- Kindle Fire Tops Amazon Best Seller List - Personal-tech - Tablets - Informationweek While not even available for shipping yet, Kindle Fire is already the top-selling gadget, based on pre-orders, on the list of Amazon's most popular electronics items.
- Cunningham Says Amazon's New Kindle to Hurt IPad Sales - The Washington Post
Chris Cunningham, co-founder of Appssavvy, says quite correctly that Amazon is "cool", like Apple. HP was not considered cool: another reason why its Playbook flopped, but in its meteoric firesale bust proved that a low-enough price point could trigger an avalanche of sales.
- I, Cringely » Blog Archive » Kindle Fire: Take three tablets and call me in the morning - Cringely on technology
I have said often enough that if there's a successful 7" tablet, Apple will make one.
Analysts will wonder how the Kindle Fire will affect iPad sales. It has to. I’ll be buying three Kindles, for example, rather than one iPad. So I’m predicting Amazon will have a hit and Apple will take a hit, but so what? Wasn’t something like this going to come along eventually anyway? If Amazon mightily validates the smaller form factor so scorned by Steve Jobs, you can bet Apple will follow with a seven-incher of its own. Game on!
- Fire - cdespinosa's posterous
Sounds pretty audacious. Via @amcafee (tweet)
Amazon will capture and control every Web transaction performed by Fire users. Every page they see, every link they follow, every click they make, every ad they see is going to be intermediated by one of the largest server farms on the planet.
- Bezos Portrays Pocket-Sized Fire as Service, Not Tablet - Bloomberg
Almost giddy with excitement, Bezos retrieves one by one the new crop of dirt-cheap Kindle e-readers --- they start at $79 --- from a hidden perch on a chair tucked into a conference room table. When he’s done showing them off, he stands up, and, for an audience of a single journalist, announces, “Now, I’ve got one more thing to show you.” He waits a half-beat to make sure the reference to Jobs’ famous line from Apple Inc. (AAPL) presentations hasn’t been missed, then gives his notorious barking laugh.
- Amazon's Kindle Fire just nuked the tablet market: Winners and losers | ZDNet
To quote, "In a nutshell, we’re entering a near disposable e-reader/tablet era that will split the market between Amazon (consumption based profits) and Apple (high end brand profits). Every technology company caught in the middle is going to have some serious problems."
- Amazon Silk: Weaving a new browser | Digital Media - CNET News
Somewhat obscured in all the coverage is Silk - Amazon's "cloud accelerated browser" that leverages Amazon's EC2 cloud service.
Amazon's solution is what it calls a "split-browser," a method that makes use of local processing for some things, while tapping into its Elastic Compute Cloud to process and serve up content faster than users might get it directly from the device.
That approach is similar to that of Olso, Norway-based Opera, which in 2005 debuted its Opera Mini browser.
- Kindle Fire as iPad killer? Yes. It's the price, stupid. | Molly Rants - CNET News
Molly Wood at CNET thinks "Amazon, not Apple, just mainstreamed the tablet market. The company's new Kindle Fire tablet, a 7-inch touchscreen device powered by Amazon's content ecosystem and priced at just $199, may be an orange to Apple's iPad apple, but I'd argue that it's an iPad killer all the same."
And furthermore, "The problem is that hardly anyone actually needs an iPad. And as tablet usage starts to shake out, it's more and more apparently that a low-cost option with fewer features will actually suit most people's first-world needs."
- Amazon Introduces Tablet That Undercuts iPad’s Price - NYTimes.com
“We have many customers who tell us they don’t want touch,“ Mr. Bezos said. “We’re going to sell many millions of these.”
- Amazon announces Kindle Fire tablet for $199
On the surface, the outlook for Fire would appear rosier, although we'll know more when the tablet starts shipping on November 15.
- How will Windows 8 tablets fare against Amazon's Kindle Fire? | ZDNet
The veteran Microsoft-watcher, Mary Jo Foley, opines, "Almost every analysis I’ve read today about the just announced Kindle Fire tablet from Amazon pits the Kindle Fire against the iPad and various Android tablets.
Even though Windows 8 tablets are still possibly a year away from shipping, Microsoft needs to be factored in here, too.."
- The Kindle Fire's real threat is to Microsoft | Microsoft - CNET News
Still not clear how this threat will play out, or even what this threat is actually is, but Microsoft has a year or so to figure answers to these questions.
- Kindle Fire sets a new (low) price point for tablets | Wireless - CNET News
Amazon just put the rest of the tablet world on notice by pricing the Kindle Fire at $199, less than half of the $500 mark that the industry has gravitated toward as a standard price. By doing so, Amazon is redefining for consumers just how much they need to pay for a quality tablet.
- Amazon Takes on Apple with New Tablet, New Browser, New Kindles, and Lower Prices - Forbes
Forbes identifies an important point, namely that the lack of a camera, microphone, or even 3G, are moot. At that price point:
It wasn’t a revolutionary event – far from it. Amazon didn’t come to the show with a groundbreaking tablet that will change everything. Rather, it came with a tablet that does just about everything we want – nothing more, nothing less. In fact, by the time the company’s presentation was over, it didn’t seem to matter that the Kindle Fire would not feature a camera, a microphone, or 3G support. This effectively kills any chance the device may have had to compete with Apple’s FaceTime feature. It also means that Kindle Fire users will have to be tethered to a Wi-Fi connection to get online (and in the cloud, which is a big part of the Kindle Fire). But at $199, will users care?
While I am not sold on the device, the price is very intriguing. My gut (and personal experience) tells me that the Kindle Fire will be a better quality tablet than the HP TouchPad, which, as a $499 device, looked very appetizing at $99.
- Eliot Van Buskirk: Amazon Kindle Fire Is Not for Reading - It's For Challenging the iPad (The Huffington Post)
Amazon CEO Jeff Bezos revealed a new line of tablets on Wednesday morning including one, Kindle Fire, that unleashes a clear warning shot across Apple's bow. It could even score a direct hit.
Amazon Kindle Press Conference - September 28, 2011, New York City