Follow-up: Amazon is going to miss the mark

With Amazon’s official press conference on their updates to their Kindle line of products — which in my mind can no longer be considered just a line of ebook readers — behind us, it seems only fair to revisit my post from a couple weeks ago in which I posited that Amazon had it mostly wrong in their approach to entering the tablet market and see how some of my points appear to have held up.

In general, my underlying perspective remains that to succeed on any significant scale in the tablet arena, a company must be positioning itself to compete either directly or indirectly against the Apple iPad. I stand by that perspective: that particular product is the point of reference and the product against which most consumers will make their purchase decision in terms of functionality, price, performance, design and pretty much any other metric that matters to a given consumer. And if the consumer’s own weighting puts the two products on roughly equal footing, all but the diehard Apple-hater will lean toward the iPad simply because it is a known product with a track record as opposed to a new entry.

Having said that, it would appear that Amazon’s Kindle Fire is in fact not positioned to be a successful competitor to the iPad. Most of the rumors regarding the then-unnamed Amazon tablet were reasonably close to the mark. Where the Fire does appear to be relevant is as a competitor to the B&N Nook. Much of the Fire’s capability along with the updates to the rest of the Kindle line render the Nook as an almost-completely overtaken product line (at present). Can the Fire compete there, rather than with the iPad? Absolutely and successfully, I think, but in my mind that’s a different market and a market with only limited overlap than the market in which the iPad and other vendors’ tablets compete.

Looking at my original points:

  1. Size: point stands. I still believe 7 inches is the wrong size for a truly successful tablet.
  2. Hardware limitations: point stands. Comparable to or better than the Nook, not comparable to the iPad.
  3. Forked version of Android: point stands.
  4. No Android Market: Amazon confirmed the absence of the Android Market and the presence of their own app store; point stands.
  5. This is not a “Kindle”: in the sense of being an ebook reader, I still feel my point stands. The screen does not compete with e-ink for reading ease and comfort, and having seen the gooey mess of fingerprints on most heavily-used tablets, I’m not sure a touchscreen makes sense for a device used primarily for reading. So, not a great reading experience. But… if we expand the Kindle line from just an ebook reading platform to a broader media consumption platform, which is probably more correct, Amazon now has a product that, while not as good for books, can provide consumers with more and different content. Good for both Amazon and the consumer, but not if your primary content is in fact books (which at present mine remains). I am willing to admit that if the Kindle line is considered more from a content perspective than just books, this represents a logical transition for the entire Kindle line and a good move on Amazon’s part. Overall, this point was probably wrong.
  6. Hackability: I’ve seen nothing yet to counter this point and believe it will stand.
  7. Tentative first step: point stands with respect to the tablet computer arena; perhaps not relevant if the Fire is considered a (more limited/restricted) content-delivery device.

Other interesting aspects of the announcement: First, the price point has some interest implications, some of which are already being seen/discussed in various places. At this price point, it is positioned as a viable alternative to an iPod touch — although the two devices clearly exist within different ecosystems for content — and may be a better platform for games and video just based on the larger size.

In addition, the price point for this device has already been followed by significant price drops on existing “traditional” similarly-sized tablet devices. From that perspective alone, this entry may have significant ripples through the rest of the tablet market.

So, overall? I still maintain that this device is not positioned in many ways to be a viable competitor to the iPad. Can it be successful, though? Yes, it can and likely will be but in a different and only slightly overlapping segment of the market than the iPad. This is not the device that makes any sort of dent in the iPad’s market share.

Discuss.

Amazon is going to miss the mark

I want to be excited about the idea of Amazon bringing an Android-based tablet to market. I really do… and I realize that much at this point is still speculation, and that reacting to speculation is potentially a waste of energy. The more I read, though, about Amazon’s approach with their initial foray into the tablet landscape, the more it seems there’s more to be concerned about than excited. Amazon is probably one of the few companies that can realistically stand a chance at competing with Apple and the iPad in bringing an appealing alternative tablet to market, but their initial approach just simply seems to have too many strikes against it for it to succeed…

  1. Size: A 7″ tablet is the wrong size: too close to a phone and too small for almost anything I would want a tablet for. I’ve used an iPad; that’s the right size. At 7″, this is not really a competitor for the iPad. Further…
  2. Hardware limitations: Reportedly based on just a two-finger multi-touch display (versus the iPad’s 10-finger interface), with just 6GB of storage, a single-core processor, and no camera, all of this adds up to an even stronger argument that not only can this device not compete with the iPad, it really can’t compete with other 7″ tablets on much other than price.
  3. Forked Android: This may or may not be a good idea. I recognize that it gets Amazon more control over the OS. My concern here is they have taken themselves out of the mainstream for OS updates and features. They may also have taken themselves out of the mainstream with respect to app developers and the additional work needed to port apps to Amazon’s fork. Which takes me to my next point…
  4. No Android Market: This not only makes it harder for app developers to get their apps to this device, it eliminates a huge eco-system of existing apps, including (according to TechCrunch) all of the Google apps. Without the Google Apps, I question whether this Android-based device will have any of the tight integration with the Google services I so enjoy on my Android phone (mail, calendar, contacts, docs, reader, Google+, voice, talk). What about other relatively mainstream apps like Evernote, Twitter, and Facebook? This also raises questions about owners of other Android devices now having to purchase multiple copies of apps for multiple devices if they even are available. Amazon also reportedly has a less-than-stellar track record with app developers. This feels like a particularly limiting choice.
  5. It is not a “Kindle”: TechCrunch has indicated it will be branded as just the “Amazon Kindle”, but I think that’s a mis-step as well. Amazon has been relatively successful in marketing their e-ink-based readers. I have one and love it. This is not an e-book reader and, while some people may choose to use it as such, this is the wrong screen for that application. This is a fundamentally different device, and if it fails to take off, that’s a black mark against the name as well as this particular product.
  6. Questions about hackability: At $250, Amazon may not really be subsidizing the cost of the hardware, but they likely aren’t making much profit on these. That’s even more the case if the rumors that the purchase price includes free Amazon Prime (currently $79/year) end up being true. Couple that with forked OS and the absence of the Android Market, and I have to wonder how easy it will be to hack/mod these to run “real” Android. Clearly, it is not in Amazon’s best interest to make it easy for people to do that if they are planning on making most of their profit via these device’s tight integration with Amazon’s universe of services: as soon as that integration is gone when someone roots it and moves it to a different OS, Amazon’s profit stream on any such device just disappeared.
  7. Tentative first step: Everything I’ve read indicates Amazon will take a wait-and-see approach to releasing a 10″ version of the device, possibly with better specs. That’s the device that likely comes closer to being attractive to me, but Amazon’s choices here with this first version may so cripple this entry that the much more attractive device never gets a chance to compete. This is a case where Amazon needs to go big or go (stay, perhaps in this case?) home.

So with all of that, what have they done right? About the only thing I can come up with is the price. At $250, this is probably at the upper edge of that price region where people may just buy one to try it, particularly when most of the similarly-sized tablets are more expensive (significantly so in some cases) — but I think it probably is still in that range. That’s even more the case if the rumors about the price including Amazon Prime play out as truth.

The recent circus around the HP webOS tablet $99 fire sale — a clearance sale on a device that by all accounts was a complete failure — show that there clearly is a market for an appropriately-priced tablet. I simply question whether this device coupled with Amazon’s reported choices in their approach has too many hurdles to overcome in order to succeed.

Convince me I’m wrong. Please.