About the Amazon Kindle Fire

September 30th, 2011

I find it fitting that Amazon named their latest tablet computer the Fire. At $199 when it goes on sale in November, it is estimated by some analysts that Amazon will be losing $50 on each unit sold. But maybe thinking about fire sales is going a little too far.

In the real world of big business, it may seem strange to sell a new gadget at a loss, but Amazon is plying the old Gillette razor gimmick, which means they sell the core product cheap, hoping to make it up in profits from other merchandise sales.

So in this case, Amazon hopes you’ll load up your new Fire from their e-book library, and stream videos from their online service, not to mention all the other goods and services the company has available. Add it all up, and a loss will turn into a profit. At least that’s the hope.

Certainly printer makers have this marketing scheme down pat. You buy the cheap printer, and pay thousands and thousands of dollars for consumables over the unit’s lifetime. Now some of you no doubt buy those $50 starter printers, maybe expecting to just buy a new printer as soon as the ink is spent, but they get you on that too. Usually those printers offer cartridges with only a tiny capacity, so just buying them over and over again may not be so cost effective, not to mention where you’d store them once the ink is used. And, no, I’m only half serious here.

When you look at the Fire, it seems to closely resemble the failed RIM BlackBerry PlayBook, which is evidently because they are assembled in the same factory according to published reports, but why couldn’t they tweak the design a bit more? Amazon is using the Android OS, but it’s heavily laden with their own modifications, so it seems far removed from any other device using Google’s operating system.

The big negative is that the Fire has a 7-inch screen, and there’s no evidence whatever that customers will embrace that size. Steve Jobs has been vocal in stating that Apple decided not to build such a tablet because the display is just too small, with about 45% of the real estate of the iPad’s 9.7-inch display. You wonder if Amazon ever considered that, or perhaps they were hoping that, at $199, the Fire would be a relatively casual purchase, particularly for gift giving. With a starting price at $499, the iPad 2 is never a casual buy, even though the price is maybe half what analysts originally expected.

What’s more, for those who buy a Fire, what purposes does it serve best? Obviously, Amazon hopes you’ll store your reading library on it, and partake of their other products and services. The built-in Web browser sports a feature that Opera has already used, which is to render some pages courtesy of an intermediary caching server to speed up performance; yes, AOL did that too with their proprietary browser in the 1990s. But it will only come in a Wi-Fi version, which means you will have to rush to the hot spot if you’re on the road and need to get online. Curiously, the built in software doesn’t include such basics as a calendar, and there’s no mic or camera.

More to the point, the Fire appears best suited for reading, watching videos, and browsing. In other words, it’s a consumption device that merely expands upon the capabilities of the original Kindles. This is quite a contrast from the flexibility of a general purpose tablet, as exemplified by the iPad, not to mention the rich selection of software at the App Store.

As to how well it works in practice, it’s curious that the members of the media who attended Amazon’s rollout of the Fire weren’t allowed to actually use them. All they could see were canned demonstrations that seem to indicate good performance. But nobody will know for sure until the product is actually in the hands of reviewers. Contrast that to Apple’s penchant to let the media have hands on with new gadgets after many press events. Maybe Amazon is still fine-tuning the OS for performance? I don’t pretend to have an answer.

The real issue is whether you can call the Fire a direct competitor to the iPad. I think not, and not just because of the smaller screen size and the lack of key hardware features that are a given in a tablet these days. But people who cannot afford an iPad, or simply want something on which to read books, watch videos, and do some casual Internet serving, may lap them up in huge quantities. If anything, the companies who are building small Android tablets, such as Samsung, have a lot to fear from Amazon.

As to Apple, not so much. But truth be told, if there was any sales impact at all, I suppose Apple could just lop off $100 from the iPad’s purchase price and still make a decent profit. After all, the original development costs have been more than covered by now. Regardless, we already have pundits weighing on in an alleged tablet price war, as if selling something at a loss is the proper way to do business, even if you don’t have other products and services to offer to compensate for the loss. In any case, when it comes to the Amazon Kindle Fire, just color be skeptical.

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7 Responses to “About the Amazon Kindle Fire”

  1. Peter says:

    I tend to agree–much of this “iPad killer” nonsense is just that.

    The Kindles are somewhat akin to the older iPods. The base models are very good at one thing–reading books. Browse the web? Not so much. Video? Impossible. But if you just want to sit and read a newspaper or a book? The experience is much better on a Kindle than an iPad–e-ink is easier to read, the weight is much better, etc.

    The Fire tries to be much the same thing–a great way to consume other media such as movies, TV Shows, simple games, etc. I have no problem with the 7″ screen for stuff like that (heck, I watch movies with my iPhone) and I think it’s a better trade-off in regards to portability. But for all the things the iPad does, I think the 10″ screen on the iPad is better.

    So what Amazon has done is create a kick-ass “Amazon player.” But it’s no iPad.

  2. jase says:

    I think that this Kindle Fire is going to be a great success. There are also rumors that a larger version with a 10.1 inch display may be available a little later.

    7-inch display is not as good as a 9.7 display for the most part, but weighing in at 14 ounces, it will be easier to hold when reading e-books and doing some light web browsing.

    What Amazon needs now is their own version of the Apple TV device, to tie together the Kindle Fire and the consumer’s TV to their Amazon Streaming video service. $79 for a year of unlimited video streaming, plus free 2-day shipping from Amazon.com with no minimum purchase amount, is not a bad deal at all.

  3. paula says:

    “But if you just want to sit and read a newspaper or a book? The experience is much better on a Kindle than an iPad–e-ink is easier to read, the weight is much better, etc.”

    That old canard! Millions of folks read newspapers and books everyday on LCD displays– computers and the iPad!

    At 14 ounces, it’s almost a pound–and not much lighter than the iPad!

    We’d much rather have a device nearly 1 1/2 times larger for not that much more weight!

    I just cannot see that many people, at least not adults, watching TV shows or video on such a small screen.

    • jase says:

      @paula, The iPad is the device that I would buy every time. But the iPad also starts at $499 and goes up from there. A lot of the more casual tablet users are going to go with the $199 Amazon device. You can certainly watch video and browse the web on a 7 inch display. You can also read e-books and play video games and use many other Android-based apps. And if you pair this tablet with a good unlimited streaming video service for $79 a year (plus the Amazon Prime free 2-day shipping with no minimum purchase) then the value becomes compelling for a lot of consumers. If it isn’t a real alternative to an iPad for a lot of consumer, it sure as heck looks like a better value than the other Android-OS tablets.

  4. barryotoole says:

    I agree that Fire is no iPad ‘killer’. I’d say that while the KF is a eReader plus, the iPad is a laptop minus.

    Both companies are approaching the mobile tablet device market from opposite ends.

    Amazon is introducing a device which is pretty useless without the company’s Cloud for anything but reading books, or consuming other media. Even here, the continuous connection to its Cloud offers a better performance. iPad, on the other hand, let’s to consume as well as create. There are more business related apps for the iOS than for the Android fork of KF.

    If consumption is the only thing one does with a mobile device, and is not bothered by the 7″ screen size, KF is a great device. But if ones does want to dabble in creating, while consuming media, iPad is a better choice, since KF doesn’t offer that. Not yet, at least. It is possible that in the near future, Amazon may introduce another device, say a 10″, that may offer many or more things that you can do with an iPad.

    Nonetheless, Amazon is positioning itself as a major competitor to Apple, and any other Android or Windows tablets already out there or to be available in the future. This is because of the rich ecosystem Amazon already has under its belt, the only one big and diverse enough to rival Apple’s.

    If there is a 10″ Kindle within a year or so, even if it has just the capabilities of the current Fire, and the price point is sufficiently below the iPad, it would be a compelling media consumption device for those who do all of there creative work on a laptop. This would be a great pair to, say, a MBA.

    While the current KF is not much threat, a future one might be. However, Apple isn’t/wouldn’t be sitting still; I believe that by that time frame it would be improving the iPad to be a full-fledged, stand-alone, laptop. If that happens, the iPad will continue to be the king of the hill.

  5. dfs says:

    If you look at the current Kindle, it comes with an “experimental” section that contains a browser, with which you can actually surf the Web, including, I suppose, webmail pages. It kinda works, and I suppose will be beefed up on the Kindle Fire. Give it an e-mail service and add the ability to access various kinds of Amazon-distributed media and you have a tablet that will satisfy the needs of a large number of consumers. Add to his Amazon’s large and attractive librariy of e-books and media offerings and its highly positive corporate image and (at least assuming this thing is going to have a back-lit color screen of reasonably good quality), yes, Apple has plenty of reason to be concerned, and I bet there are plenty of discussions going on in Cupertino (although I wouldn’t bet on what response will actually be made). A price reduction would be one option (although there’s still plenty of difference between, say, four hundred bucks and two hundred bucks). A more radical alternative might be to offer some kind of entry-level iPad “stripper” in or at least near to the same price range as the Kindle Fire.

  6. Steve says:

    When your out I think a 7″ screen will suffice, and when your indoors you can connect it to your TV anyway if you want to watch movies/tv shows on the big screen. It good that the Fire can be held with only one hand.

    I think it would be great if Amazon launched a 9″ version with 3G next year so there was 2 options available and they could still price it lower than the iPad.

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