28 September 2011

Amazon Announces Kindle Fire Tablet

The technorati had been twittering for weeks about today’s Amazon announcement in anticipation of an Amazon Tablet.  Amazon CEO Jeff Bezos did meet those expectations by introducing a 7" one touch color touchscreen Amazon Kindle Fire tablet with a dual core processor and WiFi internet connectivity.

Engadget’s side-by-side photo comparison shows that the new Amazon Fire looks strikingly similar to the BlackBerry Playbook   However, the Kindle Fire is not a carbon copy of the Blackberry Playbook.  The Fire strips the front and back facing cameras from its version of an Android based tablet, presumably to save manufacturing costs The Playbook boasts of 16 GB of memory whereas the Amazon Fire only has 6 GB of storage.  So what is the appeal of what could be seen as a stripped down tablet.

The Kindle Fire can afford to have minimal hands-on storage by integrating Cloud computing for tablet consumers.  Amazon established its cloud storage in March, which allows for 20 GB of storage to anyone purchasing one album a year from the on-line retailer.  Now Amazon promises to store all the content you purchase from Amazon on your data cloud for retrieval on an Amazon tablet.

The Playbook uses parent company RIM’s Blackberry OS.  This was popular last decade when Crackberry addition afflicted the technorati. But with the advent of the I-Pad, Google’s open source Android, Windows 7 for phones and the possible contiuance of Palm/HP’s WebOS, the Blackberry OS is suffering the same fate as the Sony Beta-Max standard in VCRs. Amazon is using an Android based backbone.  But instead of being Froyo (2.3) Gingerbread (2.3)  or the newer Honeycomb (3.1) version of Android which is optomized for tablets, speculation is that the Amazon Fire is powered on Eclair (2.1).

Why is Amazon using a forked version of Android? Officially, there is no answer but it is reasonable to presume that it ensures that Amazon Fire owners will buy their tablet apps from Amazon’s App Market rather than the Android App Marketplace or other third party suppliers.  Amazon’s ambition is to create products that seamlessly tie into Amazon’s web site.  There is strong rationale to do this.  The Kindle Reader on the I-Pad was stealing too many sales from customers who bought books from Amazon rather than through Apple.  So Apple forced app makers to fork over 30% of the sales in the Apple App Store to the Cuppertino based company.  That represented practically all of Amazon’s profits.  As a work around, Amazon reworked its I-Pad Reader to circumvent this Catch-22.

Amazon is also proud of its improved internet connectivity via its new web browser. Silk is a split architecture browser which offloads much of the heavy lifting of webpage requests to Amazon’s cloud computing clusters, which is believed to offer superior browsing performance.  This technological advance should be a great cause of concern to Barnes and Noble.  Some savvy Nook Color owners discovered that they can rig their e-book readers into being a dual booting Android tablet via the mini-SD card.  Having seen such a configuration in action, a jerry rigged Nook Color has slightly more zip on the internet than the Amazon Kindle’s clunky “experimental” web browers, albeit in color.  Sure it works, but it is not seamless and it is not particularly speedy. The Kindle Fire is a true tablet.  Bezo’s promotes his new units: “these are premium products at non-premium prices.”

Amazon is aware about finding the sweet spot with prices.  When Amazon concentrated on mass marketing the Kindle, the price dropped from $399 for the crude Kindle Klassic eventually to $189 for a full featured Kindle 3 3G/WiFi.  On the media side, Amazon fought hard to keep selling copies of best selling books at $9.99 until the majority of the six major publishers insisted on charging more for their new releases.

In August, the fire sale of the HP Touchpad showed the hunger amongst consumers on choosing tablets  for a less expensive device.  The HP Touchpad sold for $500, which is the same price point that RIM set for the Playbook and was the lower end cost for an I-Pad.  In HP’s case, their anemic sales convinced management to exit the tablet manufacturing business and prompted a fire sale in which the HP tablet sold 200,000 units in a weekend at $99 and $149.  Bezos learned from the mistakes of other alleged I-Pad “killers”.

Price is what ensures that the Amazon Kindle Fire will be an electronics blockbuster when it becomes available on November 15th.  Those in the Kindlesphere generally expected Amazon to market a “K-Tab” at $249, which is estimated to be a loss of $50 a unit from its manufacturing costs.  As the internet’s largest retailer, Amazon has the deep pockets to sell a loss-leader, expecting that they will recoop their costs within six months and they project to make $180 over the life of a unit by media sales from Amazon.   Pre-announcement, Kindle aficionados thought that Amazon would throw in an extended subscription to Amazon Prime, which would include complimentary access to Amazon Videos.

The Amazon Kindle Fire was offered for the amazing low price of $199, with a month’s subscription to the $79 per year Amazon Prime feature.   It costs half of the lowest priced I-Pad and undercuts the Nook by 20% while giving more value for money with true tablet capabilities. That is very aggressive pricing which may prompt three million sold by the end of 2011.

The big Amazon announcement was not just to tout the tablet.  Bezos introduced a line of Kindles with new lower prices.  Amazon was smart not to name the Amazon Fire as a Kindle since the latter is an e-ink reading device whereas the tablet is a color media consumption unit.  The 6" Kindle 3G/WiFi price drops to $149 (from $189) and boasts of worldwide 3G coverage (which was not guaranteed previously).  The new 6" Kindle Touch is a new WiFi only device which drops the keyboard but has some buttons and will sell for $99.  The 6" Kindle WiFi that retains a keyboard now sells for only $79.

While it is exciting to see the Amazon Fire as an inexpensive tablet, it is a relief that Amazon is not abandoning its Kindle line.  Many early adaptors to the Kindle were not technologically inclined but were avid readers who loved to have their entire library at their fingertips.  Moreover, the Kindle’s e-ink display is very easy on the eyes for prolonged reading and had a hearty battery.  The Amazon Kindle Fire uses an LCD display that should not have more than ten hours to a charge which the back lighting would be hard on the eyes for session reading. Amazon called all of their new products "Kindle" which led enthusiasts to nickname various units. It would be wise for Amazon to play up the Amazon Fire rather than confuse consumers with a color Kindle Fire when the rest of the supported product line is greyscale e-ink

As for the merits of the Amazon Fire, it sounds enticing but it is not the right tablet for me.  Based on viewing media on a 7" Nook Color, it is adequate for watching video but does not compare to a 9.7" screen, which is 50% larger.  The Amazon Fire’s $199 price is cheap, but I was able to pick up a HP Touchpad at a post firesale online sale for the same cost.  The Amazon Fire will be a great technology for surfing the web on the go and watching some videos, but it is a supplemental electronic device not geared for business.  While it might be turning into a torpedo, I believe that the clearanced HP Touchpad has more potential for business and entertainment purposes and its WebOS will survive.  Maybe there will be some more Touchpads left after today’s HP employees sale.

From a value for money perspective, had the Amazon Fire included a prolonged subscription to Amazon Prime, I would have immediately snapped one up just for the Amazon Video privilege.  Still, with Amazon’s inexpensive pricing, their impressive and varied media consumption devices and their awesome customer service, expect a mass of consumers to join Amazon’s Ring of Fire rather than a fire sale.

h/t: Engadget
     Len Edgerly of thekindlechronicles covering for kindlenationdaily

No comments: