The Kindle Fire’s slogan says it all: “All the content. Ultra-fast web browsing.” That’s the best sort of marketing message: simple, appealing, and true. Well, we’ll see how fast their new cloud-boosted Silk browser is in practice, but the content part is undeniably true. If you buy a Kindle Fire, you’ll have no trouble finding and buying books, movies, and apps. The deal for Amazon Prime members is good too: unlimited streaming of movies and TV shows. (Streaming, I believe, means it won’t work offline, but Amazon also sells and rents movies and TV shows for offline viewing.)
It’s all about the content, though. That’s the difference that other tablet makers missed. Motorola, Samsung, RIM — they seem to be chasing the iPad on specs, building the best tablet they can manage at the same starting price of around $500. But they have no clear message telling people what you can do with them.
Back in June, Harry McCracken laid out the key question to ask of any tablet: “Why should somebody buy this instead of an iPad?” The Kindle Fire is interesting because it’s the first one with a good answer: it’s much cheaper, Amazon offers a digital content ecosystem that rivals Apple’s (fewer apps, more books), and millions of people already use and enjoy Kindle hardware. The e-ink Kindles are to the Kindle Fire what the music-playing iPods were to the iPhone, and what the iPhone was to the iPad — traction in the mass market based on trust and loyalty.
Amazon built an alternative to the iPad, rather than a direct competitor. It’s a different market segment. As Steve Jobs explained back in 2010 at the introduction of the original iPad, there’s unexplored territory between smartphones and laptops.
Apple and Amazon are approaching this tablet territory from opposing sides. The iPad takes it on from the high end. It’s the best possible device in that price range from the world’s best maker of devices. The Kindle Fire takes it on from the low end. The iPad is a credible laptop replacement for many people — and with iCloud and another year or two of hardware improvements, that’s going to be true for more and more people. The Kindle Fire is a laptop replacement for almost no one. It’s a peripheral, not a second computer — and it’s priced accordingly. You can get a Kindle Fire and a new top-of-the-line e-ink Kindle Touch for less than the price of an iPad. It’s a very different take.
The iPad and Kindle Fire are emblematic of their makers. Apple’s primary business is selling devices for a healthy profit, and they back that up with a side business of selling digital content for those devices. Amazon’s primary business is as a retailer, including as a retailer of digital content. They back that up with a side business of low-cost digital devices that are optimized for on-the-fly purchasing of anything and everything Amazon sells. The Kindles are to Amazon what the printed catalog was to Sears a century ago.
Attack from a position of strength. Build on your previous successes. That’s what Apple does. That’s what Amazon is doing here. The other guys — the Samsungs, HTCs, Motorolas, RIMs — can’t match Apple’s hardware design, don’t even try to match Apple in terms of original and differentiated software, and struggle to match Apple’s prices because they don’t have the economy of scale advantages Apple does. Those guys can’t match Amazon either, because they have no content to sell. Amazon can give away the razor because they’re already in the business of selling blades. The other guys don’t even have blades to sell.
I doubt there’s any profit whatsoever in a $199 Kindle Fire. The same goes for all Kindle hardware. And with the Fire in particular, I wouldn’t be surprised if Amazon is taking a small per-unit loss, confident that they’ll make it up with the sale of content. With the iPod a decade ago, prices did come down over time, but for the most part Apple concentrated on making rapid improvements to the device at the same price points, year-over-year. With the Kindle, Amazon has improved the hardware each year, but their concentration has been on reducing the price.
Jeff Bezos comes right out and says it in the Kindle-promoting letter to customers now on the Amazon homepage:1
There are two types of companies: those that work hard to charge customers more, and those that work hard to charge customers less. Both approaches can work. We are firmly in the second camp.
Like I said, Apple tends to keep price points the same and improve the device year-over-year. It’s more like Apple works hard to keep charging customers the same amount, but Bezos’s point rings true.
Last year Amazon tried something new, with an option to pay less for a Kindle that displays “special offers”. They’re ads, but they never interrupt reading — they’re only shown on the home screen and screensaver. Today, they’ve flipped the marketing around. Instead of paying less in exchange for looking at these ads, the “special offer” Kindles are now the default, and you can pay a $30-50 premium for a Kindle without them. ($30 on the low-end non-Touch model, $40 for Touch, $50 (!) for Kindle Keyboard.)
Amazon has always catered to price-sensitive customers, and I suspect they know their audience well. And Amazon is a data-driven company. I’ll bet the $40 premium is based on how much money they expect to make from the ads they sell and products they promote via the special offers. Last year the special offer Kindle was only $25 less; the data must show that the special offers are worth more than $25 per Kindle to Amazon.
I got a Kindle about a year ago, and I use it much more than I expected to. I like reading on e-ink. I look at glowing backlit displays all day, every day. I’ve been obsessed with computers my whole life. I love glowing screens. When I’m away from my computer for days, I’m happy when I sit down in front of it. There’s a certain feeling I get when I use any computer — a Mac, an iPhone, an iPad, my TiVo, even an ATM or the credit card slider at the supermarket. Cool, a computer.
I read books on my iPad, too, but reading on the iPad doesn’t have the same mental-mode-switching effect. When I read with the iPad I feel like I’m doing the same basic thing I do as I read on my Mac all day long — just with a different device. It’s more pleasant, in many ways, and definitely more personal. But I’m still in the same mental mode — fully aware that anything and everything is just a few taps and few seconds away.
E-ink feels peaceful to me. The Kindle doesn’t feel like a computer. It feels — not to the touch but to the eyes and mind — like a crudely-typeset and slightly smudgily-printed paper book. That’s a good thing. Battery life is un-computer-like as well: Amazon measures e-ink Kindle battery life in months, and they’re not joking. It’s a surprise when the Kindle actually needs a charge. I was a doubter until I owned one, but now I’m convinced that e-ink readers have tremendous value even in the post-iPad world.
The worst thing about my year-old Kindle is, well, everything other than the screen. All the buttons are crap, and a huge chunk of the front of the device is devoted to an unpleasant keyboard that I almost never use. The buttons that really matter, the ones for page turning, aren’t good. They’re too small and have a bad feel.
My seven-year-old son refuses to believe me that my Kindle is not broken, because its screen doesn’t respond to touches. He’s not far off base. If I go a week or longer without using it, when I pick it up, I often find myself swiping to turn the first page.
The new Kindle Touch seems exactly right. No more needless keyboard. No more junky buttons for page-turning. A touchscreen. Everything good about last year’s Kindle remains, everything bad about last year’s Kindle is gone. And it’s an ounce lighter and the price has gone down.
I don’t get the new just-plain-Kindle, though. Yes, it’s $20 cheaper than the Wi-Fi Kindle Touch ($79 vs. $99) but is $20 a big enough difference to justify the extra complexity of the product line? I’m not sure why the keyboard models remain, either, unless there really are some people who use the keyboard frequently. It’d be a much clearer product line with just two models: Kindle Touch for e-ink, Kindle Fire for tablet computing.
The new just-plain Kindle is available now, worldwide. But the Kindle Fire and Kindle Touch aren’t scheduled to ship until mid-to-late-November. Why announce now, 45 days ahead? Easy: because people are already making holiday gift decisions.
Production must be tight on the Fire and Touch models, as well, because they’re only being offered in the U.S. for now. The only new Kindle for sale outside the U.S. is the $79 non-touch model.
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