
“In Darwin’s words, “nature favors the extremes.” The “sweet spot” of a market is an illusion that soon gives way to multiple sweet spots. So which spot do you want your brand to occupy?”
Up to Amazon’s move none of the challengers to Apple’s iPad seem to have worked out what spot they want to occupy. Sony and Samsung might have the best looking tablet products in terms of hardware and presentation, but all of these iPad wannabe’s seem to be quoting features and technical specifications rather than saying what their products actually do for you. Their only attempt at differentiation appears to be “we do Flash”. To add to their dilemma, they all seem to have come in at or close to the same price point as the “premium” iPad range. Apple have used the strength of their own retail distribution network combined with the muscle of their sourcing and procurement approach to create a superb product at a great price. Then they came out with the new improved iPad 2 at the same time most of the competitors were getting their first tablet attempt to market. If you are going to compete with Apple, you need to pick where to fight.
I watched the hour long announcement of the new Kindles by Jeff Bezos, Amazon’s founder, chairman and CEO, and was struck by how much he was trying to emulate Steve Jobs and Apple. His whole approach, from the style of the slides, to the clothes he wore, to the way he introduced and demonstrated the new Kindles on stage was straight out of Steve’s Apple play book. The key thing that Apple does is focus on and show what their devices can do for you, with hardly any mention of technical specifications. Jeff introduced 3 new Kindle e-readers and then the Kindle Fire. He got through the whole presentation without even mentioning Android, the operating system that the Fire runs on. He did explain how Kindle Fire will make use of the whole Amazon ecosystem – Kindle book store, MP3 store, Instant Video, Prime, Appstore and Web Services. All of your content is backed up in their cloud, and they have even created their own browser, called Silk, powered by Amazon Web Services. The browser deploys a split architecture with some functions running on the mobile device and others using the power of the cloud. Each time you load a web page, Silk makes a dynamic decision about what runs locally and what will execute remotely – they say it will make browsing faster, and get faster as it learns your browsing habits. It is completely logical that the company to really challenge Apple in the tablet market is one that combines a global distribution channel, leading edge technology, and an existing ecosystem for content. Jeff’s not as charismatic a presenter as Steve Jobs, and one of the big differences was the audience. An Apple announcement would have plenty of fans there to applaud and whoop in the right places. The Amazon audience of journalists and analysts felt quite flat, even when he announced the incredibly low prices there was no reaction.
Kindle Fire is a 7 inch, WiFi only tablet with a great looking colour touch screen, weighing only 14.6 ounces and with around 8 hours of battery life. It doesn’t have a camera or a microphone or slots for expandable storage. It’s designed for you to consume books, full colour magazines, movies (with access to 100,000 movies in the US), music (with access to 17,000,000 songs from the store), documents that are sent to you, as well as giving you the ability to do your email, browse the web, and use apps from the Amazon store – all for just $199 PLUS all your content is backed up in the Cloud for free. Jeff calls this premium products at non-premium prices. Pricing for the UK has yet to be announced, but on past Kindle experience I would guess it will be in the range £175-190. At under half the price of an entry level iPad this will create a lot of new demand and effectively starts a low cost, no frills tablet sub-category. There is still a place for e-readers with paper style E ink screens that allow you to read in bright sunlight outside. Some people who might have spent around £100 on an e-reader will sacrifice that ability, live with the glare of a colour screen and spend a little more to move up to a Kindle Fire to do more than just books.
The announcement also covered a new low cost, WiFi only Kindle at $79 and two touch screen versions – all without the keyboard of the Kindle 3 (still on sale but now renamed Kindle Keyboard). Only the low cost version is available for pre-order in the UK so far, and priced at £89. The low US price is supported by adverts, but in the UK the entry level Kindle is ad free, and so costs a little more. The pricing makes these Kindle products very significant for the e-book market, but they were overshadowed by the Fire.
It’s difficult to believe that the Apple iPad only shipped back in April 2010 and created a whole “post PC” revolution. Apple sold 300,000 units on the first day of pre-orders. Amazon took 90,000 orders for Kindle Fire on day one last week (and remember these numbers are real sales to consumers and not shipments to distributors). Not quite as dramatic as iPad’s first day, but still an indication of how strongly this product is going to sell. I can’t see the Fire impacting the iPad, but I do think it will steal market share form the lower cost Android based devices and the likes of the smaller Galaxy Tab or BlackBerry’s Playbook. Amazon can afford to build a very strong bridgehead at one end of the tablet market before they think of the next step, leaving Apple to consolidate their position at the other. If you take the tablet market as a whole, it’s just become a two horse race, but in reality those two horses are running on different tracks.

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The iPad will be a leader for many years to come. Apple’s brand name is just too strong… for now.
I’m a bit surprised that these ereaders are still out there and being sustained. I don’t think it can compete with alternatives because the prices are still too steep.
Hi Amelia,
I agree that Apple have a commanding position that won’t change for several years. Part of that is the Law of Leadership (see The 22 Immutable Laws of Marketing Ries &Trout) and partly because they have such a great, well positioned product. I don’t agree with you on e-readers though – I think there will be a category for a lower cost, specialist device aimed at books using technology that allows it to be read outdoors in sunlight for quite some time to come. It will only be new technology that changes that.
– Kindle Fire doesn’t have microSD slot that, for example, Nook Color has thus
it is stuck with 6 GB usable internal storage unlike Nook Color that can get up
to 32 GB card in. Kindles are made to be almost like a “dumb terminal” of the past to make sure you’re tied up to Amazon’s storage on the web (for which you need Wi-Fi connection to get to) and you can only store content you get from Amazon there, not other files. Quoting Amazon on Kindle Fire: “Free cloud storage for all Amazon content”. Get it, Amazon content?
– The stats of how long the battery can last (Kindle Fire theory is 8 hours) are taken with Wi-Fi off. You can only imaging how much less Kindle Fire battery will last if you use it to access content from their Cloud storage over Wi-Fi.
– Amazon can spy on your web activity through their new cloud-integrated web browser of Kindle Fire.
– VERY IMPORTANT – lack of microSD slot means that if you decide to root your
Kindle Fire, you’ll have to root the actual device thus there will be no coming back. On Nook Color, you can make it boot from a “rooted” microSD card and if you want to get back to the original Nook you can just take out the card and reboot.
– Kindle Fire doesn’t have a camera.
– Kindle Fire has about 70% less usable screen area than iPad 2.
– Kindle doesn’t support eBooks in ePub format that is the most used format in the world.
– Kindle app store contains only Amazon approved apps and it does not include (and will not include) Netflix app that iPad has and Nook Color is getting thus again you’re stuck with Amazon content only.
– Amazon confirmed that you cannot download anything to Kindle Fire when traveling outside US
I’d recommend waiting for a couple of weeks as Nook Color 2 is rumored to be released by Barnes & Noble soon.
Sorry Joke/trim73 but you just don’t get it.
You’re missing the point of Kindle Fire completely. Your list of features and desire to root the device so you can do other Android stuff on it, or use apps that aren’t in the Amazon store, means that you are trying to turn it in to a different product. There are other Android tablets available to do that. It’s a bit like complaining that a Canon PowerShot S95 doesn’t have the interchangeable lenses or the hot shoe flash of a Canon EOS 1000. The PowerShot is still a great digital camera that takes 10 megapixel photos, but it’s aimed at a different sector of the market to the EOS.
On Amazon “spying” on my activity. I have to live with that with Facebook, Google, etc., and anyway I see the advantages it can bring – that’s just not an issue for me. On Barnes & Noble and the Nook – they don’t exist here in the UK & Europe, so they aren’t available as a practical choice. The bottom line is that all of the things you seem to want Kindle Fire to do would make it a “me too” Tablet at a different price point. This product will be a success because it does a particular set of things well and defines a new “sweet spot” in the tablet market.