Amazon Kindle Fire


Well the news broke today that Amazon was releasing its own Tablet based on Android, called the Kindle Fire.  The most compelling thing about this product, initially, is the price point of $199.  It’s an interesting time in the technology space as we have this new category of device that is still being understood.  The debates are numerous.  Is the category a tablet?  Should it be a laptop? How does this effect market share…in what?? But with Amazon entering the game it does change the dynamics a bit as they are not a traditional device manufacturer but grew up as an online book store.  Which in addition to being unique provides them with some distinct advantages and ability to provide differentiated offerings.

The Kindle Fire is an extension of the Kindle, which was the original “successful” ereader.  It’s a case of a fish swimming upstream looking for bigger and more profitable markets.  In the case of Amazon the Kindle Fire gives them a chance to sell existing services to new customers.  To go beyond just being a device where I read my ebooks, but can do more. Amazon has a lot of relationships with content providers and will be able to utilize the Kindle Fire to drive additional services revenue.  It adds excitement to the tablet  space where to date only Apple has been able to generate excitement (OK a lot of excitement).  I commend Amazon as they have made the Kindle software available beyond their own device realizing they need to provide their services beyond their own ecosystem.

A key area I think where Amazon can make inroads is bringing cloud computing to the masses.  A few weeks ago at the Microsoft Build conference which was about Windows 8, they demonstrated a lot of features that tied into the Microsoft Cloud Services, the problem is it is a year away.  The Amazon cloud services will be here by the holidays this year, building and adding to the success of Amazons Web Services, which is already a billion dollar a year business.  Today cloud computing is a “buzz” word that is rapidly gaining traction but has yet to reach the mainstream.  Sure there are what we term cloud based services such as DropBox, various emails services, The Microsoft Live brands offer a variety of services such as SkyDrive.  But in my view and I think where Amazon has a shot to get it right is people want the vision and security of what the cloud offers but they want it to be a seamless experience that they just do and do not have to think about or worry about.  The Cloud will become real when it is in afterthought.  By bundling these services into the Kindle Fire, Amazon has a chance to hit a real home run in the market place.  There will be other like the Sky drive and iCLoud but the first to get it right will have a clear advantage in the market.

Release cycles are very compelling and necessary in the Tablet space – Apple has been able to maintain and sustain momentum by releasing new Tablets annually.  They generate excitement leading up to the release and then deliver. Having consistent release cycles is important, gone are the days of 3 year release cycles.  The market is far too impatient for such lengthy waits.  Apple. Amazon’s main competitor is pretty good at these release cycles and really has mastered generating PR excitement around the release of  their Tablets (not to mention “i” everything).  Microsoft, the other perspective player in the tablet space, may have more of a challenge on release cycles as their tablet is pinned to the traditional Windows OS.  For a refresher Windows has traditionally been on 3 year life cycles.  It will be interesting to see if they can foster a consistent stream of yearly innovation.  As technology innovation increase in velocity it will be important for players to keep up lest the fall behind, far behind.

Pricing for the  Kindle Fire is set to be $199.  This may be the most important development in the Tablet wars yet as Amazon is clearly set on losing money to garner additional services revenue.  It’s the HP printer model but in the cloud. Apple has panache but it is relatively expensive and is almost more of a status symbol.  At the low price Amazon is offering they have a real opportunity to drive market share and a lot of retail traffic to….Amazon (remember the business they started as back in the dotcom days).  I would assume Wal-Mart may be following these developments very carefully.  If the Fire is as slick as advertised then this low price point could be a big game changer and further enhance Amazon’s image as a consumer company.

Amazon constantly amazes me as it seems to re invent itself on a constant and consistent basis.  Starting off as an online retailer to driving a lot of innovation in cloud based services to making the ereader successful (they were not the first, many had tried).  The initial buzz seems to indicate the Kindle Fire should have great success as it will be available for the holidays and could gain a significant piece of market share (depending on how we define market share).    The industry needs a strong competitor to Apple, if anything to further innovation in the industry.  Amazons unique position to deliver cloud services and content services put’s it into a strong position to be that alternative to Apple.  We are still waiting to not just hear, but see another alternative from Microsoft, but I am continually perplexed by my former employers behavior.  They seem to live on their legacy not the future (which is kind of what technology is about).   It sounds like we are a year away from the Windows 8 tablet, which means the market could have moved somewhere else by then.  We are probably waiting for someone else to enter the fray – the market opportunity is just too big for that not to happen.  based on what we are seeing wherever the market goes in the next few years Amazon will be there with presence and power.

Good Night and Good Luck

Hans Henrik Hoffmann October 3, 2011

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3 thoughts on “Amazon Kindle Fire

  1. Content is king. As Facebook demonstrate, fresh relevant content with high entertainment and happiness quotients is the new web-driven economics. In that context, devices and the cloud almost become the basic requisite phone jack and wiring for the 21st century. In of itself they have little value. It is the content services they are connected to and how that will matter. Without rich and engaging content, apps and devices become glorified e-book-ends

  2. Content is king. As Facebook, Netflix, Apple, Amazon demonstrate, fresh relevant content with high entertainment and happiness quotients is the new web-driven economics. In that context, devices and the cloud almost become the basic requisite phone jack and wiring for the 21st century. In of itself they have little value. It is the content services they are connected to and how that will matter. Without rich and engaging content, apps and devices become glorified e-book-ends.

    1. Agree 100% – the phrase Content is King has been around since the dotcom days(I remember ATT Wireless talking about this) but now the bandwidth and technology are widely available I feel the phrase is moving from cliche to reality

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