So meet the family. These are premium products at non-premium prices. People are going to love these products.
This is Amazon's mission statement for product development. They will not compete with Apple's "revolutionary, magical" phones and tablets; instead, they'll sell quality tablets and readers to the average person at great prices. This populist attitude has been missing from the tablet market since the iPad's release.
The Fire will be the first successful Android tablet because the user base already exists. With the last few Kindle generations, Amazon has groomed customers to pay for electronic content. These users will buy Kindle Fires and e-Ink Kindles in droves, buy more books, and tell their friends.
At this price, Amazon won't steal Apple's customers. They will simply introduce a new segment of people to the tablet market. Developers need to think about this as another golden ticket. Here's the iOS gold rush, part deux.
EDIT: changed "luxurious" to "revolutionary" after reading a comment below. I need more coffee.
The most interesting thing to me is that the Fire doesn't seem to have pretensions about replacing computing, though it theoretically could just as much an iPad or Android tablet. There's an app store, but they seem to be only pushing games on it, and the main thrust seems to sit squarely on consumption.
Especially at this price point, it's not a replacement for a computer, it's squarely a supplement.
I think I prefer this vision to Apple's. It feels more democratic in that I think the iPad wants to replace computing, but privilege consumption at the expense of production.
Amazon's vision is still one of centralized distribution of content, but it strikes me as one that's comfortable coexisting with the Web model of distributed, democratic content production.
Totally agree with this insight. One of the fallouts of the tech bubble and ubiquitious computing trend was that it became so 'cheap' to add programability features and customization that everything got more computer like. The backlash, things like the cell phones for elderly people which act like 'normal' phones was the result.
Also the market seems to be pushing back on things like TVs that are also internet browsers.
So the vision here is very important, and the Kindle as simply a window that lets you look at the books you have is pretty compelling. The $80 ad supported one, I want an open source text book library for that. The school district can give those to every student and save money.
How cool would that be! My library finally got the overdrive support so I wanted to check out an e-book (an audiobook) to try out on my kindle/iphone. And found a nice book that I wanted to read and the page says, "available copies : 0, library copies : 1, No. of patrons in waiting list : 23, Click here to add yourself to the waiting list".
Yeah, its a weird (and stupid) system. Libraries are toeing a fine line between getting sued vs not. They only got agreement for 'lending' ebooks if they set up a system like real books where if its out, you can't borrow it. This from the head librarian at the Sunnyvale Library at least.
I agree that it's silly from a technological point of view, but the libraries are at the mercy of publishers, and what else can the publishers do, really? If they let libraries "lend" out unlimited copies of books, who would buy them?
The business model to compete with Apple has been known for extremely long: offer lesser products at lesser prices. Everyone else failed at the "lesser price" part.
Amazon can pull it off, because they don't need to make money with the tablet: as long as it sells ebooks and movies, it remains profitable for them. Since there's nobody to challenge them on this market, they will get the volumes to drive the BOM prices down, too.
HP hadn't the option to make money by selling ink cartridges for subsidized tablets, as they used to do with printers...
Since there's nobody to challenge them on this market, they will get the volumes to drive the BOM prices down, too.
Barnes & Noble is in this space too, and they have hundreds of stores that will serve as points-of-sale for the Nook. Don't forget them.
EDIT: apologies to the European HNers. Still, those B&M stores in America are incredibly popular, making it easier for Barnes & Noble to find new Nook users.
> Still, those B&M stores in America are incredibly popular
They're actually an albatross. Ask Borders how popular physical book stores are. B&N is only still alive because of its digital business. Barely alive too, Amazon is 150x larger in terms of market cap. Digital sales are up, physical sales are down and at the end of the quarter they are losing a lot of money.
The Kindle line is sold in Target. I'd wager Targets are more popular and will be around longer than B&N. Even better, it doesn't cost Amazon a dime to keep Target stores open.
Agreed. I can't help but think Apple has to be paying Target something for the 10 foot long Apple-branded cases/displays for the iPad/iPod lines. Maybe Target would pay for that themselves to have the privilege of selling ipads, but I'd be less surprised if Apple was paying for the space.
I'm not in the USA, so I don't know B&N (although my company provides some of the hardware in the Nook).
However, B&N's main advantage compared to Amazon is its network of B&M stores, right? Now, the bet here is "let's lose money on the tablet, and hope that people buy tons of ebooks".
I'd guess that people for whom the existence of B&M stores is important aren't going to be the biggest ebook buyers: they'll be more into dead tree books, on average. If B&N subsidizes their Nook, and it's only used as a web browser, B&N has lost.
Barnes & Noble also has in-store cafes and their in-store Wi-Fi offers Nook users free reading and coupons for goodies in the store. I'm not sure how many people take them up on it, but it seems like they are at least playing with a business model.
B&N doesn't have the operational chops that Amazon does. Its going to take more than Brick & Mortar to make a dent in the tablet market. B&N will fight with Dell for table scraps while Amazon and Apple each capture sizeable, material share. I wrote a bit about why I think Amazon is going to kill this on my blog earlier today - http://www.byte.org/2011/09/28/amazon-coming-into-its-own/ - tl;dr: Amazon is one of the few tech companies with the ops and distribution chops in the same league as Apple.
How true. I had to buy a heap of textbooks recently, and had a discount coupon for B&N, so I decided to give them a try instead of just buying from Amazon as I had originally intended.
Bad idea. I saved about $75, but had to deal with billing errors, cancellation of part of my order, slow and overpriced shipping, and that cost me several hours of my valuable time. I was astonished at how poor the experience was.
I buy as much as I can on Amazon now - with Prime it is a no-brainer...
This is after wondering why I could order books from Amazon and they arrived 9am the next day (the joys of living in a teeny country like the UK :P) but when I ordered X other thing from different sites it took days, and was full of mistakes.
Amazon have absolutely nailed the shipping side of online retail - which is usually what people most complain about in retailers, after all!
Barnes & Noble is only america right? I have never seen a Barnes & Noble store anywhere in europ, were as amazon is very commen in europe. Thats not a small market.
Seriously though, do Barnes and Noble actually sell the Nook to international customers? They certainly don't market it over here, while Amazon have run quite a lot of TV and print ads. Buy the look of it I'd have to buy the device and books in US dollars instead of my local currency. These things don't give me the feeling that B&N are serious about sales outside the US, while Amazon definitely are.
In Seattle we have Amazon Fresh, which is home grocery delivery. I can generally get next-day delivery, so I can order groceries and anything else they have in the local warehouse (books, movies, whatever) and have it sitting on my doorstep by 6am the next day.
I can't imagine living my life without it. Seriously.
Opening physical Amazon stores would trigger a sales tax requirement in every state where it operates, regardless of whether or not Amazon is able to negotiate a federal override of the state right to collect taxes on e-commerce.
States do not have the right to tax Amazon, if Amazon does not have a physical presence in their state. That's not a "federal override" but rather is part of the constitution and is a protection against every state collecting taxes on every business across the country. No taxation without representation.
States do have a right to tax their individual citizens who purchase online. Unfortunately, most citizens do not comply with these state taxes (called "use taxes" because they aren't on a sale, the sale occurs out-of-state).
He or she is saying that some people who were not looking for the advanced features bought the iPad because it was the only tablet available beyond some minimum.
My mom (she's a minister) just got an iPad, when all she needed was a handheld device with which she can scroll the text of a eulogy, when she's at a grave doing a funeral. The lowliest of tablets can handle this task, but "iPad" is all people talk about. If Amazon can generate buzz -- and I think they can -- then it would certainly erode sales such as my mom's.
Yeah, a lot of people think they know this market and what people "would" buy, and all of them except the guys selling iPads have been wrong so far. Batting average of everyone else: .000.
"Easy-to-use", which is far from a given on a non-iOS device, doesn't mean anything if there is not an attractive application base.
A lot of price comparisons are based simply on initial purchase price. If you take into account pre- and post-sale service and support, build quality, longterm reliability, resale value over time, to name a few, it's harder to simply compare purchase prices. I think there will also be some people who will end up with Kindle Fires who probably - secretly - wanted iPads. Santa will be able to save a few dollars this year...
The majority of people (that I know) with iPads are using them for consuming content or playing games - something they could easily do for $300 less with a Amazon Fire.
No 3G, not much storage space, lower resolution (as soon as Apple releases iPad's with retina display) and lack of an Apple logo make the Fire inferior, but with a much lower price it could make things interesting.
I don't think Apple has ever promoted its products as "luxurious". Jobs introduced the iPad as "a magical and revolutionary device at an unbelievable price".
I think that Bezos quote is actually very Apple-like, what with "people are going to love these" and so on.
From the clip I saw, Bezos looked awkward and nervous. He looked like the wind was already out of his sails, which doesn't help to create that rock concert environment if that's what he wanted. He paused a lot to wait for applause and got crickets.
Sounds about like every time I've heard him speak. He probably let out some really loud laughs too.
Remember his welcome video to Zappos employees? It was a paper based presentation (giant sheets!) where among other things he explained mistakes he and Amazon made and then shared "everything I know". He's awkward at moments, but authentic throughout. I like his style.
He paused a lot to wait for applause and got crickets.
It's a press conference, not a public event. You measure interest by camera shutter clicks, rather than applause :-)
He's already achieved his business objective, which is lots and lots of frothy press coverage and market position as a value provider. The longer the poor economic climate lasts, the more this pays off. I can see why you're skeptical, but I felt the same way when I first saw the kindle, and boy-was-I-wrong-about-that.
I wasn't trying to make an assessment of the product though - I was just trying to make about his presentation style. I think he was hoping for a rockstar presentation where everyone would get energetic and excited from the way he presented alone (regardless of the product).
That clip is disturbing. I understand that not everyone can replicate Jobs' reality distortion field. But, why is Bezos not excited about his own product? There should be a natural enthusiasm that is missing onstage there. And, it's not that Bezos can't do it when he tries! I've seen interviews where he was clearly invigorated about little stuff like shipping infrastructure and AWS details. So this should have been a no-brainer.
Maybe he's gotten a sneak preview of what Apple has in store for October and it's now too late to change course.
Apparently this one is a stop-gap device that they had made to get into this holiday season. The tablet they really want to have is still some months away and will miss this year.
maybe luxurious is the wrong way to put it, but the iPad has always been marketed as a luxury-segment product. it is promoted as being something special, not just another everyday CE device.
the iPad is like a backyard swimming pool - you don't need one, but it's fun and all your friends will be impressed. the kindle is like a washing machine - you don't need one, but if you don't have one you're going to be going to the laundramat/reading paper books like a barbarian.
No, I think the iPad is like a veranda, and the Kindle is like a block of cheese. No, wait, the iPad is like a BMW, and the Kindle is 40,000 frequent flyer points. No, that not right, the iPad is like a Ming vase, while the Kindle is like a big screen tv. yeah, that the way.
You analogy is only slightly less awful than mine.
"This populist attitude has been missing from the tablet market since the iPad's release."
Disagree completely. Everyone expected the iPad to cost $999, but they came in at a superlow price point that no one else could compete with and have sold tens of millions.
To paraphrase Bezos and Andy Warhol at the same time the iPad is the Coke of tablets, we're still waiting for a Pepsi and every working class guy on the street knows he can get the same iPad as the President and no amount of money can get you a better tablet then the iPad that guy on the bus has. That's populism in the tablet market (or as they say, ipad market) to me.
- Absolutely correct. But all the other android tablet makers pricing their tablet anything over $300 will all get screwed by this for sure. [I cannot see what else they can do to justify double the price of the Fire without some brilliant ideas and innovations.]. They all refuse to do anything to the software. They also cannot match Apple's (and probably soon Amazon's) scale and huge volumes to get a good price on bulk-hardware. Nor do they have the "content" and "user base with credit cards" to match that of Apple and Amazon.
Good news is that we can expect more HP-touchpad like fire sales. Bad news is very few are going to want those even at those prices.
Amazon brilliantly played to their strengths. Kudos to Jeff Bezos and team!
"This populist attitude has been missing from the tablet market since the iPad's release." I do not agree with this at all. Before the iPad the tablet market was ~$1500 laptops. Now amazon has come out with a tablet that they did not have to design the hardware or software. Great, but do not knock the iPad for price, as it cost something to create a design people want to buy.
So meet the family. These are premium products at non-premium prices. People are going to love these products.
This is Amazon's mission statement for product development. They will not compete with Apple's "revolutionary, magical" phones and tablets; instead, they'll sell quality tablets and readers to the average person at great prices. This populist attitude has been missing from the tablet market since the iPad's release.
The Fire will be the first successful Android tablet because the user base already exists. With the last few Kindle generations, Amazon has groomed customers to pay for electronic content. These users will buy Kindle Fires and e-Ink Kindles in droves, buy more books, and tell their friends.
At this price, Amazon won't steal Apple's customers. They will simply introduce a new segment of people to the tablet market. Developers need to think about this as another golden ticket. Here's the iOS gold rush, part deux.
EDIT: changed "luxurious" to "revolutionary" after reading a comment below. I need more coffee.