Yesterday, Amazon's Jeff Bezos took the stage to talk about the company's new line of Kindles. The Paperwhite, despite its sort of goofy name, looks promising enough. But the Kindle Fire HD may prove the most stunning example of how Amazon plans to muscle its way into tablet market domination. Can it really beat the iPad at its own game?
Apple's iPad has become synonymous with the general concept of a tablet. My mother, upon seeing a touch display larger than a mobile phone -- regardless of brand -- just refers to them as "iPads." While plenty of electronics outfits have attempted to capture the fervor surrounding Apple's device, only a couple have succeeded in gaining real (potentially) lasting notoriety.
Google's Nexus 7 is certainly deserving of attention, with a projected eight million to sell this year; Apple moved 17 million new iPad units in the third quarter. The Samsung Galaxy Tab, currently mired in patent-infringement-hell, still couldn't sell a million units as of this June (that's sales, not shipments). And for every Nexus 7 or Galaxy Tab, there's a growing mountain of touch-screen carcasses in Apple's wake.
The new iPad sold three million units in the first weekend.
But then, there's the Kindle Fire: Amazon's "number-one selling item." Recently, my wife had a little extra money to spend, and decided she wanted a tablet. Despite my assertions, she opted for the Fire, primarily because of its significantly lower point-of-entry when compared to the iPad. She enjoys surfing and reading on Amazon's tablet, and while the new iPad still holds all my affection, I find myself increasingly aware of just how much money I spent on the device.
So, just how many Kindle Fire units has Amazon sold? Well, the company's not talking. Estimates place the figure at around seven million -- but those are estimates. Regardless, the Kindle Fire sells well. And it sells well for a very simple reason: it provides great, Amazon-backed content for only $199.
Does the Kindle FIre have all the features of an iPad? Does the Fire have the same big, hi-res screen? No, it doesn't (or didn't). But what the Fire lacks in bells and whistles, it makes up for in an extremely affordable package. While Apple will undoubtedly continue to cater to the high-end market, Amazon sees the opportunity of getting a return-on-investment from content sales.
When consumers think of tablets, they think of iPad. But when they think of media delivery -- books, movies, etc. -- the box with a smile on the side comes to mind.
"We want to make money when people use our devices," said Bezos. "Not when they buy our devices."
The new Kindle Fire HD models come in three flavors: a 7-inch, an 8.9-inch, and 32GB 4G LTE. Every single one of them is cheaper than the new iPad. The 8.9-inch model is only $299. Amazon is betting on the user -- not the hardware -- to turn a profit. The company just needs to get the device in your hands to sell you its other wares; the Kindle Fire HD is Amazon's new box with the smile on the side.
Of course, it's far too early to tell if the philosophy will work. While consumers associate product delivery with Amazon, the Apple App Store is still the digital content juggernaut to beat. And while Bezos and crew are trying to beat Apple at its own big-screen tablet game, Cupertino may just pull an about-face.
If rumors hold true, the smaller iPad Mini will see its own day in the limelight this October. If Apple can bring the price of the iPad Mini within reach of the 7-inch Kindle Fire HD, this may not work out all that well for Amazon. Give consumers a tablet with equally affordable access to Apple's massive library of apps and the brand recognition of Apple -- and the Kindle Fire HD stops looking so amazing.
Of course, maybe Microsoft's Surface tablet will come out and destroy everything. Nahhh.
Follow this article's author, Matt Clark on Twitter.
alkalain
September 10, 2012 at 8:41am
You cannot muscle your way into the tablet market domination, like you say,when you think, like Bezos, that the world is the USA. As a Canadian I am insulted that he is still ignoring us 36 millions Canadians, an therefore will patiently wait for the Ipad mini, witch will kick his arse anyway.
b9bot1
September 08, 2012 at 5:49pm
Two things wrong with it right out of the box. First, no media or applications. Anything Kindle before won't work with it. You have to buy what ever you had again.
Second thing wrong with it which really bothers me is that it has advertising built into it. That's right your stuck with advertising on a product that you supposedly purchased by you. Amazon says you have no way to remove it.So I guess as a buyer you don't really own it because you don't have admin rights to remove crap like that on it.
My opinion that's a real deal breaker and I wouldn't buy it.
Apple does not do this. So Apple wins with apps and media that works between all of there devices. Apps and media that you have bought you can re-download for FREE again and again.
Apple isn't greedy, they do a lot more than pump out devices. They have stores that can help you use them, repair or replace them. They have online help, they provide constant software updates and improvements.
Quality of the products are always top notch and usually offer unique features which no other devices can do. So you can buy that $500 laptop that will last you about a year and you'll have to sink in $1500 worth of upgrades to get to anything that runs like a Macbook Pro if your lucky. Oh you want or need service, good luck calling india and waiting 6 weeks after shipping back for any kind of service.
There is a reason for Apple's pricing other than greed, it's call support, training, and service which you can't get anywhere else.
CrashN2Me
September 07, 2012 at 1:31pm
Amazon has stepped up to the plate and delivered on what everyone saw as short comings in their first attempt at a tablet, screen resolution and memory. What I haven't heard or read yet is whether any of these devices will be able to load real world apps like Microsoft Word or any Office software, if they can it will be a game changer. Think about what Apple refuses to give us the customer who pay way too much for their products, such as no HDMI ports on anything oh wait they did on their over priced Retina MacBook Pro. Don't you find it ironic that Apple who uses a China company known for cheap labor still charges mega bucks for their devices? Do you really think Apple will offer the new MiniMe iPad for $199 or even $249 to compete with the new tablets? I don't think they will because they as a company are greedy and oh yeah I forgot they know best what we want right. Amazon can beat Apple as long as they can get major developers to write apps for them. What do you think?
mtorok
September 07, 2012 at 2:41pm
Ummmm. Every manufacturer is using the cheapest manufacturing that they can find. Did you check to see where the kindle is made. Taiwan. I agree with you on hdmi port but I have an apple tv and can stream it wirelessly. It's funny people who don't really look into the price of what they are getting. Price out a compatible good manufacturing laptop with the software that comes on a Mac and it is close. Plus try to sell that used laptop and see what price you get. Apple products hold Thier value so when I sell to update I easily cover any price difference. Sell a used kindle come paired to an iPad and you will know what I am talking about.
Now back to kindle. I think it looks good but it has a lacking element. The app store is not developed as much as android and apple. That fact alone will hurt it.
With your complaint about apple being greedy I guess you think e same for high priced car manufacturers as well. BMW, Mercedes, Lexus, infinity, on and on. These cars cost more and sell for more on the used market. I wish I could afford one. If you cannot afford an apple product don't get one but I bet you will be back when that Chevy keeps breaking down and costing you more money in the long run.
MattClark
September 07, 2012 at 11:49pm
If you remember, a widely circulated report after the new iPad release valued Apple's manufacturing costs at around $316 per wi-fi unit. Large portions of that cost are tied up in the display and processor. The LTE model reportedly costs Apple $409 to produce. Now, while the profit margins of the wi-fi iPad are somewhere in the ballpark of 30-percent, that's a HUGE gap on the LTE model, which sells for $829. We're talking almost 50-percent.
While it's not my place as a reporter to call that "greedy," as Crash did, it's arguably a bit staggering given recent (and previous) reports in regards to Foxconn. Of course, that's assuming those cost figures are even true. I'm not even entirely sure those cost points include other factors in Apple's supply chain, and they certainly don't take into account investment in R & D (a massive point for a tech leader like Apple). The supposed figures are just literal representations of manufacturing cost.
In no way am I making excuses for the labor practices of Apple, Foxconn, or other suppliers, by the way.
Regardless, mtorok makes a valid point about the Kindle Fire HD's lack of competing content. That was an argument I made in the article, and I think it will be the defining factor of Amazon's failure or success. It really comes down to the consumer -- do they want a high-dollar tablet with an insane library, or a lower-cost tablet with a weaker app base (but the massive recognition of Amazon's content supply).
To answer Crash's other question: the iPad offers quite a few alternatives to office productivity, but we all know Surface will likely carry the true MS Office experience.
And just as a personal aside, mtorok, I drive a Chevy. ;)
Thanks for commenting, and keep it coming. I live for this.
