∞ Kindle Fire will be successful, but it's not an iPad killer

New product launches are exciting affairs, but it drives some writers to the brink of stupidity. Amazon’s tablet announcement this morning is no different.

I have no doubt in my mind that the Kindle Fire will be a successful product for Amazon. In fact, I think it could easily grab the second spot in the tablet market behind Apple.

However, it’s not an iPad killer and I don’t think Amazon is positioning it that way. The press may be, but Amazon isn’t.

Here’s what I said last week about the Kindle Fire:

Amazon has a solid name among consumers. Millions of people shop there and they are trusted. As soon as Amazon comes out with a tablet, people will start buying.Even though it will be based on Android, consumers will only see as far as the Amazon name. People will look at the device as an expanded Kindle rather than a tablet and buy it for that reason.There is a whole subset of users that would be happy to have a tablet to read books, surf the Web and get email. That’s all they want, and all they need. Amazon’s tablet will be perfect for them.

At $199 people are going to view the Kindle Fire as a device for reading books, shopping at Amazon or surfing the Web and getting email. It’s not going to touch the high-end of the market where the iPad lives. Those people are still going to get an iPad, although they may buy a Kindle Fire for their kids or spouse.

The companies that have to worry about the Kindle Fire are other Android-based tablet-makers. They are in real trouble at this point because they’ve already shown they can’t compete on the high-end with the iPad and now I don’t think they’ll be able to compete on the low-end with the Kindle Fire.

  • Craig Storm

    I use my iPad and iPad 2 to check email, surf the web, play games, read books, watch movies & TV shows, etc. The idea of a $199 device to do these things is very attractive. Questions remain: Can I load my own video content onto the device for viewing, or is this a 100% Amazon-content-only machine?

    • Jay Butler

      It only has 8GB of storage. That’s not going to hold much content if you can load your own.

      • Anonymous

        Hence the free 1 month subscription to Amazon Prime. Loads of streaming content plus 2 day delivery on purchases.

      • You get 5GB of free Amazon cloud storage. 20GB is $20 a year. Brilliant on their part …they will let you buy content from elsewhere, but you’ll pay THEM to store it.

        I personally love Amazon’s services. Don’t see a reason why you’d need to buy things elsewhere after you buy the Kindle. That’s kinda the whole point of buying into the platform.

    • Anonymous

      Yes, a $199 iPad does sound attractive. But Kindle Fire is not an iPad. I think you will find 1,000 things that disappoint you that you just assumed would be there.

  • I’m hesitant to call the Kindle Fire a consumption device, but I’d like to see how Amazon will allow implementation of simple productivity apps, like task managers, a calendar and maybe a text editor.

    If they do this right, I really think that other Android device manufacturers will need to be very afraid, because Amazon has working and feature-complete platform to build the ecosystem for the Kindle Fire on.

    • Dan Woods

      Android Device manufacturers should be afraid regardless. Of the few Android Tablets that people actually purchased, you can guarantee that they are only being used for consumption devices. iPad sales may be impacted, but only at the low end. I think that that is what Apple would prefer. Let others race to the bottom while it takes the cream. It also positions the iPad as a Luxury device again.

      • I think you’re right in saying iPad sales might be impacted at the low end, but I don’t think the iPad will thus be positioned as a luxury device. The iPad is a premium product, but not a luxury product. Apple will not raise their prices, just because there now is a viable low-end alternative by a competitor.

        I really want to try the new Kindle, because despite the things it has in common with the PlayBook, it looks like the better implementation.

      • Anonymous

        No, iPad and Kindle Fire are not in the same market. And you have the low-end and high-end backwards. Kindle Fire is high-end, and iPad is low-end. But again, in different markets.

        iPad is a low-end Mac. It competes against Windows notebooks in the $500 PC market, where almost all Windows systems sell. iPad has one function: run PC-class apps. Same as the Windows notebooks it is replacing. Yes, iPad is a tablet, but it is a tablet PC. The Keynote on iPad is the same Keynote from the Mac, except the mouse interface has been pried off and replaced with a touch interface. There are thousands of apps like that. Wolfenstein is the same Wolfenstein we know and love but with touch controls on top. These are PC apps.

        Kindle Fire is a high-end reader slash media player. It’s the most high-end reader yet released. It’s like the first iPod with video. It’s a milestone Kindle. There are low-end Kindles below it, 2 of them. Yes, Kindle is a tablet, but it is a tablet reader or tablet media player, not a tablet PC. Think about it: we also have tablet phones.

        The Apple product that matches Kindle Fire is iPod touch 8GB for $229. This description applies to both devices: “high-end reader and media player, 8GB storage, runs mini phone apps, screen is too small for PC apps, sells for around $200.” None of those things are true about iPad.

        The myth is that people are buying iPads and just sitting there watching movies all day, as though they never had a TV before. People think that is true because if they haven’t used an iPad, they can’t really imagine all the things it can do. But once you have one, you realize pretty quickly that it is a PC, that it can do anything a PC can do. There are even apps that give you a filesystem if you want or need that. You can control a Mac-based music studio by sending MIDI over Wi-Fi from your iPad. The reason it can do all those things is that under the touch interface is OS X, a PC class OS for a tablet PC.

        • I agree with everything you’ve just said, but if the Kindle Fire is going to compete with the iPad depends on the perception of the consumers. Many will recognise the iPad for what it is at once, but others won’t.

  • The problem is this is still a device that is not pirate-friendly. That’s the problem with iTunes/Amazon, we don’t want to buy your content! We want to use the device to do all the things that we want to do with all the content we gather from the ends of the earth. But I don’t want Prime, or Hulu Plus, Netflix, etc. 

    • I cannot imagine that there won’t be some kind of 3rd party media player available on the Amazon App Store.

      Other than that all I can say is that this really isn’t Amazon’s or Apple’s problem. They don’t have to build their devices “pirate-friendly”. If you don’t like the options you are given you have to find alternatives.

      Personally I’d love to have a service like Hulu Plus or Netflix in Germany.

    • Anonymous

      I’ve personally found the iPad to be sufficiently “pirate-friendly” – even out of the box. wink wink nudge nudge Even more so if you jailbreak it…

    • Amazon is cutting the price of this tablet to either a razor thin margin, or actually taking a loss on it with the premise that they will make their money back by selling you a continuous stream of content. The thought of them ever giving a crap about pirates is laughable. They aren’t interested in you.

  • I agree that it is the Android device makers that are in the most trouble. They were having big troubles as it was, and were just starting to take on the iPad in price. I don’t see how they can hope to compete with the Kindle Fire on price (one analyst says that Amazon will lose $50 on each device).

    Personally, I have zero interest in a 7″ device. It will be interesting to see what Amazon offers next.

    It will also be interesting to see how much this further fragments the Android world. I think I read that Amazon “forked” off this version of Android. If Amazon’s tablets really do become the dominant Android tablets, and if Amazon doesn’t work to keep its Android in sync with Google’s Android, it could give Amazon as much or more control over Android than Google has (which should be really worrying to Google as well).

    • Dan Woods

      I don’t think Google Android has anything that Amazon Android needs, or can’t do themselves. As long as they are binary compatible with Apps in the Amazon App Store, Amazon doesn’t care.

      It will be interesting to see if Amazon pay to licence Java from Oracle, unlike Google.

    • Anonymous

      The whole idea with open source is to give Amazon exactly as much control over Android as Google has. The fact that Google has a different definition does not mean anyone else will go along with that.

  • If it had a front facing camera that could be used with skype I would pre-order right now. Full usb support would help also. 7 inch screen size is fine for movies. After all I enjoy watching video on the 3inch iphone screen. What matters is the resolution not the size. It’s only 12 inches from my face. How big does it need to be? In the end it’s more about what this device CAN’T do not what it can.

  • Anonymous

    There is no need to own a iPad and Kindle Fire.  At less than half the cost this will cut into the iPad’s casual user market.

    Just like the iPad is cutting into laptop sales, this will cut into iPad sales… and probably even more so.

    • Anonymous

      I don’t think there are any casual iPad users. You either don’t know why you want one and so don’t buy one, or you know why you want one and you buy one. Casual users have a no-name generic PC. That is the casual choice. iPad cuts into laptop sales because it is a laptop. It’s a $500 low-end Mac that competes with $500 low-end Windows. It is very simple. iPad is a PC. It’s distinguishing features over other mobiles are these: PC class OS X core, PC class 9-10 inch 1024×768 screen, PC class 1024×768 native C/C++ apps, and the most gigantic mobile GPU ever created (attempting to be as close to a PC class GPU as it can get.)iPad is absolutely NOT a giant phone like Android tablets. If you want to think that it is, then you are playing right into Apple’s hands. They will be happy for you to be fooled right up until the day in 2015 or so when OS X outsells Windows.

      Kindle is a reader. At $200, the question is: do I buy a Kindle for the 7 inch screen and Amazon services, or do I buy an iPod touch for the FaceTime camera, iOS apps, and Apple services? Those are the 2 equivalent devices: phone apps, reader, media player, Wi-Fi only, around $200.

      • Anonymous

        I think you pigeon hole people by saying that casual users have a no-name generic PC. That’s plain ridiculous. I use both platforms doing high-end 3d work – so it’s hardly casual. People buy “no-name” PC’s because they can get a hellofalot of bang for the buck. It’s cheaper to buy a decked out PC than a decked out MAC generally. Apple does make some nice products but there are limitations in extreme environments – the cost effectiveness of network compatibility – software purchasing and custom tools for pipeline production. That said, the PC’s I use at work cost boatloads more than almost any MAC I can imagine but I also keep a 1500 dollar computer at home and that includes 2Tb of diskspace an 8 core proc 16 Gb of DDR 3 and two 21 inch displays.  It’s hard to beat that value. THAT is where the kindle fire is going to come in.

        As nice as Apple products are they cost too much. I keep an android phone which does literally anything an iphone does and way more than I really need it to do. I love the 7inch form factor – something the size of a paperback is not going to dominate my life. Some people have a use for ipads – I use them at work – but I guess I’m a “casual user” because there is really no place for a 10 inch device in my life outside of work especially at that price point. If I’m going to spend 600+ dollars on a mobile device that large – I’m buying a laptop because then I’ve got a full-bodied operating system.

        There are good android alternatives out there to the IPad too – alternatives with more power, ports, storage and flexibility. They don’t sell well because they cost too damned much. The Ipad does too – you might as well chip in a couple hundred more dollars and get a Macbook Air.

        So there is Definitely a place for android, 7 inch tablets AND the kindle fire in the marketplace. It may be a “casual device” but seriously – that’s what it’s meant to be. I can’t imagine doing any kind of heavy lifting even with the IPad – maybe in the future – until then you can still listen to music, play videos, surf the internet, play games, read emails, ftp to your web server, transfer files, check on renders, see what’s new at the theater and etc etc etc… but the Fire is the first device I will actually plunk my money down for. It has the right form factor, the right features, and the right price – that is the key.

    • Anonymous

      Did you not read the post at all?

  • Webguy

    I am excited as I have been when I got my HP Touchpd for $99

  • Crisrod63

    I agree. This is NOT the iPad killer. It’s intimately tide to Amazon. Amazon created it, not to sell hardware, but content. Apple’s philosophy is quite the opposite, the have content to sell hardware. So now we will se which business model is better.

    • Anonymous

      Considering how people love to pay for hardware and really hate to pay for software or media, I think Apple is going to be OK.

      But Amazon’s tablet is not just about content, it’s also about shopping for physical goods.

  • You are right and wrong at the same time, depending on how you define markets. There is no doubt that Amazon has become Apple’s most dangerous competitor. But Amazon is looking to redefine the rules. 

    First, rather than compete with Apple at the high end, Amazon is following the classic Innovator’s Dilemma strategy of segmenting the overall tablet market and targeting an under-served portion of it, i.e. people who don’t want to spend $500 or more on a tablet.

    Second, even with the low cost product, Amazon is leveraging its expertise in cloud computing with its new browser, Silk. If Silk really can deliver a better browser experience, Amazon will have a huge advantage over Apple who has limited cloud expertise.Third, it’s well understood that some time in 2012, Amazon will release a high-end tablet that will go head-to-head with the iPad. By that time, Amazon will already be high-volume tablet producer and in a much better position to compete with Apple on hardware features as well as price.

    • Not discounting your analysis, because I think it has some merit, but these two companies have different goals.

      For Apple content in a means to the end of selling hardware, while Amazon uses the hardware as a means to the end of selling content.

      Amazon doesn’t care whether their devices can compete with Apple quality wise, they just have to be good enough for people to be able to enjoy the content they bought without problems.

    • Anonymous

      Markets are not a way to express your individuality, they are factual actual things. Many people go shopping for a “$500 PC” and there are many, many PC’s made to sell around that price just so they can serve that market. There are also $1000 PC’s and $1500 PC’s. There are $600 phones, $300 phones, and $100 phones (carrier prices, not retail.) That is a fact.

      $200 media players do not compete with $500 PC’s. They simply do not. A user who gets all the computer they need out of an Amazon tablet was never going to buy an iPad. 

      The Android phones that are being given away free are $100 phones, and the Android phones that sell for $200 with contract are $300 phones. There are no $600 Android phones. iPhone is $600. They do not compete except in some ignorant heads. The carrier is not going to say, hey, wait a minute, I like the iPhone better, so why don’t I cancel my order for 10,000 $300 Android phones and get 5,000 $600 iPhones instead? They know that they are going to have both $300 and $600 customers come in to buy phones. They need BOTH phones. Every carrier right now wants a $600 iPhone, $300 Android, and $100 Android at least so they have 1 phone at each price point. If and when Apple does a $300 phone and/or $100 phone, then the competition between Apple and the Android cartel will begin again.

      Amazon … is not even close to Apple’s most dangerous competitor. Amazon does not make any of the same products as Apple, with the exception of a high-end reader/media player around the $200 price point. That competes with iPod touch, but iPod touch may not even exist anymore by the time the Kindle Fire ships in November.

      The most important competitor for Apple right now is Microsoft. That is very easy to see: 1) Apple just launched their first low-end $500 PC 18 months ago, after pundits were asking for it for literally decades, and 2) almost all Microsoft makes is low-end $500 PC’s. All of Windows is huddled around the $500 mark, with the OEM’s making like $20 a unit in profit if they are lucky. Some are unprofitable. iPad is the newest product. Microsoft will not have an ARM system ready until late 2012 at the earliest, and likely later. Amazon does not make a low-end PC.

      Right now, Apple has no competition in high-end PC’s. The only high-end PC’s that are selling other than Macs are really custom ones that are bought for a special hardware and cannot be replaced with a Mac. Amazon does not make a high-end PC.

      Right now, Apple has no competition in phones. All the other phone makers have run away from the $600 market and left it all to Apple. They take 66% of the profits across all handsets. Amazon does not make a phone.

      The thing is, you just can’t say “Apple is doomed” anymore. They are just way, way too big. They have enough cash that they could close all of their stores and stop shipping products, and they could still run the company for 10 years, making products the whole way but never shipping them. They are outrageously large and outrageously rich. And they are even richer in technology: they are at least 10 years ahead of everyone else in software. AT LEAST. Software is SLOOOOOOOOOW. You cannot just throw another body at it to speed it up. It’s like a novel … if a novel is behind schedule, the publisher can’t just hire a second writer and send him in to write 20% of the book he knows absolutely nothing about. Nobody is going to catch up to Apple for quite some time if at all.

      Silk will likely suck. It will likely make some pages faster and make a great demo, but it will also likely chew up a ton of content, especially HTML5, which does more of its thinking on the client than HTML4.

  • Not an iPad killer, but an iPad sales killer. It will put a significant dent in the iPad’s sales. The majority of users only use the iPad for the features that the Kimdle Fire provides and it will make a lot more sense for them to buy a $199 Kindle vs. a $499 iPad. Finally, and Android tablet maker has seen the light on how to compete with Apple in the Tablet space.

    • Anonymous

      Totally wrong. iPad is a PC. It sells in the PC market, in PC stores. People buy it for PC tasks. There are surveys: we know that 40% of iPad buyers in the first year bought one “instead of a Windows PC,” and we know that another 40% bought one “instead of a Mac PC,” and we know that for another 10% it was “their first PC,” and the other 10% had various reasons.

      Nerds may like to play semantic games and pretend that iPad is not a PC because it doesn’t have a mouse or doesn’t have Windows or doesn’t have Intel. Regular users look at iPad and see a netbook that is done right. They do not question that a device with a 10 inch screen, HTML5 Web browser, Keynote, iMovie, and other PC apps is a PC.

      Here are some features that all iPad users use that are not found in Kindle Fire:* All iPad users use the 9-10 inch PC class screen, and Kindle Fire has only 46% of that screen area, making it phone class.* All iPad users use the PC class app platform, with full-size 10-inch 1024×768 native C/C++ apps throughout for speed and power efficiency and breadth of app catalog choices. Kindle Fire has mini Java phone apps, like a 2005 phone.* All iPad users use the giant oversized GPU that is in iPad, much, much larger than the one on any other mobile … and all iPad users use the OS X display subsystem that draws the entire interface in the GPU so that iPad feels fast and fluid. Kindle Fire has a phone GPU and Android 2.3 does not use it at all, the interface is drawn in the CPU, which wastes battery power.* All iPad users use the 11-point 10v multitouch with Apple heuristics as opposed to Kindle Fire’s 2-point 5v multitouch with Google heuristics.* All iPad users use the 10 hour battery as opposed to 7.5 tops in Kindle Fire.* All iPad users use the regular software updates for 3 years after purchase that add new features and greatly improve the device, and which close security holes that have been discovered in a timely fashion.

      • 40% of iPad users use the 3G modem that does not exist on Kindle Fire, they are not even in danger of switching to Kindle Fire

      I could go on and on and on, there are thousands of features that are in iPad but not in Kindle Fire because iPad is a PC and Kindle Fire is a reader.

      And you are underestimating iPad sales. Consider that during the current quarter, iPad all by itself will outsell HP. All of HP. Who only 2 quarters ago were the world’s biggest PC maker by volume. Last quarter, Apple took the #1 spot, but this quarter, they could sell no Macs and still be the #1. Making a dent in those kinds of sales would be hard even if Kindle Fire had all the iPad features for $200 and was feature in a SuperBowl commercial. It is likely Amazon could not produce enough Kindle Fire’s over the first year to even scratch the surface of iPad sales.

      And all iOS devices, including iPad, double their sales every year. Since 2007 that has been the case.

      The way to understand iPad is to think back to when notebook PC’s really came in, and suddenly nobody wanted a desktop anymore, and imagine if Apple had been the only vendor who could make a notebook, because of some arcane technical reason such as Microsoft didn’t have any battery support at all in Windows yet. Imagine if they were the only notebook PC vendor for 18 months, and then at that point, Microsoft announced their notebook-ready Windows was still 12-18 months away. That means Apple would have been the only notebook PC maker for 3 years before the first Windows notebooks begin to stumble out of the nest. Apple would have like 100,000 “notebook-optimized” apps, things that didn’t make sense on a desktop, and even worse for Microsoft, users are not calling notebooks “notebooks,” they are calling them “PowerBooks,” the Apple brand. They are telling each other “you have to get a PowerBook, they are so much better than the old-fashioned PC’s!” they are not saying “get a notebook.” That is what is going on with iPad. Apple went down another level of form factor and the Windows PC makers could not follow because Windows is not ready to run on ARM yet, even though Microsoft has been making ARM software since 1996.

      So iPad’s success is partly Apple doing a great job, and partly Microsoft totally blowing it. When you have a situation like that, you get a market-changing event.

      The last time this happened was Intel Mac. When the first Intel Mac shipped, Windows users had been on XP for 5 straight years. Then a year later: Vista. Today, Apple has 90% of the high-end PC market and everyone in Silicon Valley uses a Mac. The Mac versus PC commercials are over because Apple won. The Mac chased Windows out of the high-end. Now, it is round 2: iPad versus PC at the $500 price point.

  • somedumbCanuck

    First, show me how this product is relevant internationally, then start talking about how this will eat into Apple’s sales. Amazon’s media offerings don’t exist anywhere outside of the USA. 

  • Anonymous

    It’s not going to touch the high-end of the market where the iPad lives.

    Akin to a netbook vs the MacBook Air…

  • Anonymous

    There is a much greater potential for this thing to be an iPod Touch killer than iPad killer. At $229, the iPod Touch is a bit more than the Amazon Fire. The iPod Touch does have some nice features not in the Fire such as Photo/HD Video support, Bluetooth and Accelerometer/Gyro. I think for folks thinking about the Fire as a gaming device, they may be disappointed when they learn about all the limitations with not having an accelerometer. But for the older crowds (today’s Kindle users), the Fire is a very compelling device.

  • Doug67

    Fire vs ipad. Really ? – No 3G: Problem. 3G ipad with Google maps=the best traveling device. – 7 inch: Problem. Too small for videos, movies and also business applications ipad: great experience as is. No need to connect to a TV to fully enjoy it. – Small on-screen keyboard: problem. The ipad on-screen keyboard size works just fine for me, even for medium to large size documents – apps: Problem. ipad with thousand of specific apps that work very well together. Able to really work with it without missing my laptop – integration with iphone: problem my ipad and my iphone interact very well together and will even more with iOS5. iphone 5 is just around the corner and Apple will sell many, many millions of it. All these buyers will find the iOS5 integration very valuable

    And these are just some of the few huge differences. No, Fire is NOT an ipad killer. It is not even in the same market segment. ipad might even benefit from this.

    However, that does not mean that Fire won´t sell. It might be a Playbook killer and an Android tablet killer. RIM should be in shock, as well as Samsung, HTC and others, because their margins just went down quite a bit. They will be compared, specially their 7″ offerings, with Fire and they will have to price down their products in order to sell.

    Now, all this is assuming the product works right. We will not know that until mid November. Remember the hype behind the Playbook ? Once it was out, it showed so many problems that it did not sell as expected. So, let´s wait and see what the real product is in a few weeks.

  • Anonymous

    The question to ask is can the OS be updated or it is just another dead end android product.

  • Anonymous

    Looks to me that Fire will work its way up to the iPad over time, pulling a big market sector chunk of buyers with it. Bezos is plenty smart: Remember when Amazon went for years and years without making profit, living off the stock market to gain market acceptance? 

    The real question is Apple’s response. Will it react with a Fire sized tablet with iPad quality for near Fire prices? The Lexus versus Honda comparisons, already out there, don’t bode well. Apple didn’t do so well as a Lexus maker.

    I think Apple will not react but continue on its way. Per usual. It knows it must share the tablet market eventually. Nothing about Amazon suggests that it can wipe out Apple’s reasonable share. 

    Apple, in any case, must be looking farther ahead. I’m hoping Apple will move on to cars. I want an iPlug electric vehicle.

  • Canucker

    This is called market stratification. Amazon has taken its time to wait until the conditions are right for them to leverage their strengths. Apple does’t dwell on specifications, it talks about what you can do with the iPad. Amazon (Bezos) has taken exactly the same approach.  No mention of the 8GB memory, plenty of mention of the cloud storage and easy of use. I think Apple may respond by moving the iPad a little lower in pricing but not by much.Similar to their approach with the white MacBook perhaps – aimed at large scale implementations in schools, libraries, etc. 

    The biggest limitation of the Kindle Fire is that it is hooked up to Amazon.com’s teat. That’s the primary source of content and Amazon has made it that way to undercut sticker price. It’s somewhat similar to iTunes/AppStore (except it’s the reverse business model in terms of source of profits) but it is most definitely not “open” as in the Google Market. So, Apple captures people who want the best experience and are wiling to pay for it.  Amazon captures people who are willing to compromise on the tablet but are willing consume content through Amazon. This leaves “mainstream” Android licensees fighting for a market of people who are not willing to pay for a high end device and are also not willing to pay for content. I’d say that fraction of the market is the least appealing to any company in terms of business plan. If Apple takes a similar approach to Silk with Safari (ditto Microsoft), Google is left trying to sell adverts to businesses seen by the eyeballs of people who are demographically defined as less likely to spend their money. Not to mention the impact of the closeted FaceBook community and the relatively shallow commitment of Samsung and HTC to Android. End runs? No wonder Larry Page is so focused on social and acquiring MMI.

  • Low price has a disruptive value in itself if it provokes incumbents to abandon the low end and flee up-market. You can’t get lower in price than giving the product away, which, in a way, is what Amazon seems to be doing. according to this article Amazon has pretty low margins on everything it sells, but it makes a good profit due to its scale and volume, regardless the fact whether this tablet will slash the popularity of iPad or not you never know, as to how far this tablet could run http://tablettechtoday.com/blogposts/how-far-will-the-kindle-fire-go.html

  • Dave West

    Please also feel free to read this guide about “how to transfer books from iPad to Kindle“.