Amazon yesterday announced its first Android powered tablet called Kindle Fire. The tablet was fueling the media rumor mill for a while, many claiming it to be the ultimate iPad killer. Let's see where Kindle Fire stands and how is it going to change the tablet landscape.
First things first. Amazon Kindle was a cool ebook reader with its e-ink which allowed readability in the broad day light. However, Kindle stagnated and did not innovate much. Nook continued to innovate but lacked the online retail presence that Amazon had thus could not sell as many eReaders as Amazon did. So, why was Kindle hotter than Nook -- Amazon's retail presence. It was far more easier to order a Kindle, which mostly appeared on the home page of Amazon, than to order Nook. Its still unclear the gap between the two devices since Amazon never disclosed the actual units sold we don't yet know which is selling better.
Tablets: A different ballgame
Now, tablet is a different ballgame. Tablet is still a niche market. Apple has a lead as most Apple fanboys, and the number is big due to iPhone's success, would shell out $600 for a device they know nothing about.
It leaves out the average consumer who wants great value for her investment. Looking at this factor Android tablets are doing a great job. Tapping into those markets is not an easy task. So kudos to Samsung and Motorola for capturing a decent non-Apple market. This market will continue to grow as users who use PCs only for consumption or networking will switch to tablets. These users may not necessarily go to Apple.
This is where Amazon Kindle Fire can shake the tablet market. Kindle Fire just make the journey to Apple's garden a bid harder.
What is Kindle Fire?
It is a low-end Android tablet which offers basic functions of a tablets -- browsing, eBook reading, movies, music and some games.
It is not a high-end tablet, it doesn't come with HDMI output or other hardware found in high-end Android tablets. Kindle Fire doesn't have the Android Market so users will be limited to apps offered by Amazon. The question is how many users care about it?
Kindle Fire is like those cheap Chinese tablets with branding from Amazon and a far better user experience as compared to those Chinese tablets. So, the only players who are really going to lose are those cheap Chinese manufacturers who were selling Android tablets under $200 price point.
Who else is going to lose?
Apple -The biggest dent is going to be for Apple as Kindle Fire is going to be the hottest selling gift this holiday season, pulling the carpet from under the iPad. Quite a lot of iPad 1 users have not yet upgraded to the iPad 2 even if it had cameras. There may not be many incentives for users to upgrade to the iPad 3. All Apple can count on is new users, but quite a lot of these new users are going to be lured by the Kindle Fire.
No, that doesn't mean Apple uses will switch to Android. What is means is a lot of Apple users will be buying the Kindle Fire as gift for kids or for grandpas. Why would they spend $700 on one device when they can buy 3 for the same price. That said, its hard to predict anything at this point.
Samsung, Motorola may gain and not lose
Apart from the holiday sales, some Apple users will continue to shell out $600 every year to upgrade to the latest version of the iPad, which is more or less trying to catch-up with Android. Kindle Fire will play no role in this segment, so the question is will it hurt other Android players?
It is evident that the iPad is inferior to the Samsung Galaxy Tab in terms of the OS and hardware. The only area where it leads is apps which are created by 3rd parties and not Apple. The gap is shrinking so non-Apple fans will continue to buy high-end Android tablets where as Apple fanboys will continue to upgrade to the latest version of iPads.
The way I see it is Kindle Fire will actually help bring more consumers to the tablet market. Kindle Fire may create new tablet users, those who were staying out due to the price point. But once they taste the blood they may want to upgrade to a better, high-end version of the Android tablet which lead them to Samsung, Motorola, Toshiba and HTC. These users may not go to Apple route due to the eco-system. So, the way I see it is Kindle Fire may actually help the other Android players.
Microsoft has yet to enter the tablet market and looking at the company's performance recently – failure of Windows phone, Bing, Office 365 and so on – we can assume Microsoft is the next GM. Yes, it will continue to dominate the shrinking desktop market with its anti-competitive business practices, but it has lost the future to open source and Linux.
Blackberry is pretty much done in the tablet segment. PlayBook was a massive failure and as more and more executives are moving towards the iPad or Android Tabs, the challenge for RIM is to create a value that no one else can offer. Failing to do so, RIM will continue to lose customers. Kindle Fire will have no effect on these customers as these are primarily government, enterprise customers and they don't make personal purchase decisions based on prices. These customers will go for the iPad or high-end Android tablets.
In a nutshell, the Kindle Fire is a low-end Android tablet which is targeted at average user who want a hybrid of eBook reader and a tablet at affordable price. Just the way Kindle was stagnated where as Nook and Sony Readers continued to innovate, we can assume that Kindle Fire will see a slower innovation cycle. Users will buy it due to Amazon's direct access to them, and the attractive price point.
Amazon is in a very strong position to sell its Kindle Fire, which competitors lack. So, I think Kindle will be a hot product and will shake the tablet market. It will in fact create a market for Android tablets and push the iPad towards the corner.
Note to be made, owing to the closed ecosystem of Amazon, a lot of free software advocates and concerned users will stay away from the Kindle Fire. The last thing you would want is another Apple.