Tuesday, September 06, 2011
Amazon is the real Apple competitor
I have always perceived Amazon as a threat for Apple. After all, they have a mobile device which is kind of a tablet (Kindle) and a bunch of cloud services. Still, they never felt close, mostly because they have always focused on a niche (books).
Everything is about to change: Amazon is about to release a 7-inch touchscreen Android tablet, a direct challenge to the iPad.
Why do I think this will be huge?
Here you have the first eight things that come to mind:
1. Amazon is the most valuable and trusted brand online. The cloud, which goes hand-to-hand with mobile devices, is a place where trust is everything. In particular, if you are storing your most important data. Amazon has gained the trust of about everyone. Nobody comes close.
2. Amazon has your credit card, and everyone's else (at least in the US). Having a billing relationship is something Google is dreaming of, and the big advantage Apple has on the App Store vs. the Android Marketplace. I would bet Amazon has more credit cards than Apple does in this country.
3. Amazon has a phenomenal sales machine to push a new retail device, as they have done with the Kindle. Guess what? They will call this one Kindle as well, a new kind of Kindle, the natural upgrade to all Kindles they have sold so far. It will be on Amazon home page every single day, as the most important gift for your Christmas list.
4. Amazon is setting the perfect price for a tablet: $250. Anything closer to the iPad is a no show. Forget the Android tablets in the market today: if I want to buy a tablet and the price is close to the iPad, I will buy an iPad. Period. There is no game. If you say "half the price", you have my attention. And you are about to end in my Christmas list (and not only for me, it is a perfect gift).
5. Amazon has everything in the cloud. I mean everything you need: they have books (duh), music (Amazon MP3 is awesome) and movies (Instant Video). They match Apple (nobody else does). Actually, Amazon is better at books... There is a chance they will throw in free Instant Video, as they are doing today with Amazon Prime. It would be Netflix on a mobile device, for free... Huge.
6. Amazon is planning to ship a tablet with the right size. A 7 inches tablet does not really compete with the iPad. It is a different thing. It is something you can bring to bed with you. It is an upgrade to the Kindle. But it does everything else the iPad does. It is like an iPad Mini, at half the price.
7. Amazon has an App Store with apps. This tablet is built on Android, and Amazon has its own marketplace. You can be sure that 99% of developers will make sure to upload their app on the Amazon Appstore right away, as soon as the new Kindle ships. Right now, there is no incentive or very little (I downloaded the Amazon Appstore on my Android smartphone, used once and already deleted it) but users drive developers. Trust me, it will take days not weeks.
8. Amazon is choosing the right time to launch it: October, just in time for the holiday season.
Is this enough to challenge Apple and the iPad this Christmas? You bet. We are about to hit the second wave of tablet purchases, the massive one of the Early Majority, now that most of the Early Adopters have one (and some have already lost their first one, ehm...). Right price, right timing, right features, some cool perks (like Istant Video) and Amazon immediately becomes the #1 competitor for Apple. Cool.
Posted by Fabrizio Capobianco at 16:29
5 Comments:
Interesting points, I would say though that I really don't think it will be called or in any way reference the word Kindle.
The Kindle is in a different market space, and there is no natural upsell path from an e-reader to a full blown tablet. Kindle users bristle at the idea "upgrading" from e-ink. If an e-reader doesn't have a good screen for reading it's lost - and a good screen for reading is a bad screen for multimedia (and vice versa). At present, the brand "Kindle" stands for a 'books on an e-ink screen supported by strong wireless infrastructure'.
Introducing a "Kindle Tab" risks polluting that strong association for the normal Kindle. Plus, tablets are strong in multimedia content consumption - why would they want to associate that with books?
Just my 2p on the branding aspect
Comment Posted at 03:29
Fabrizio said...
Actually, I believe calling it Kindle DX o SX or whatever would be a great marketing move. They have a brand people love and understand. They are not making a new iPad, they are making an advanced Kindle, because it is of the right size for a book reader. They would not kill the old one, they will have it as well as Kindle something (the one with electronic ink). I would not invent a new brand, when I have one that works so well.
Comment Posted at 07:22
Well, I stand corrected - the news today is that Amazon have settled on Kindle Fire...
Still, I feel that calling it the Kindle Fire means that when talking about the old Kindle you're forced to say "the one with the electronic ink" to make yourself properly understood. I think that the more important brand within the context of multimedia content delivery (essentially, where the money is in the long-term tablet game) is actually Amazon, not Kindle.
Still, fair enough! The intricacies of branding are mysterious... And perhaps, sometimes, it doesn't matter quite as much as branding consultants in Marketing Week tell us :-D
Comment Posted at 01:50
Massimo said...
Fabrizio, I disagree :-)
Although conceptually your post makes perfect sense, when you think about the Apple buyer... there is no comparison shopping going on. They just want those white little profit makers. Price is not a primary concern.
The Amazon shopper is quite the opposite: definitely price conscious, and much more pragmatic. Think about the first Kindle: how much more pragmatic can you get? "I just need to read a book on a plane, I don't need color!!".
The Apple buyer is the $200 designer jeans shopper. The Amazon buyer is the $30 Dockers jeans shopper (that's me, by the way!).
Two completely different worlds. They'll co-exist.
Apple will continue to work on their "design+functionality" innovation pattern. They've been incredible at that over the last 15 years.
Amazon will continue to deliver on their pragmatic, price-focused, "don't go for the fancy stuff" approach to Amazon-branded products and services. They've been awesome at that. And - by the way - when you are the first ecommerce portal in the world, cross-selling a good product to millions of people becomes almost a piece of cake!
All in all, I don't believe at Apple they're losing any sleep on the Kindle Fire. They're busying designing the next pair of $200 jeans.
Comment Posted at 23:50
Fabrizio said...
You know, I disagree ;-) There is a huge difference between pants and computers. The latter eventually reach a point where the amount of features is overwhelming for the majority of the people, and the price starts to go down dramatically. Apple is sitting on a pricey pair of jeans, which will become not as pricey very soon. Amazon is playing the game of starting low with little features and with time they will add all the features Apple has, keeping the low price. In a not too distant future, the iPad risks to become the tool for the 4% of people that want to be different. Still pricey and good looking, but not dominant anymore.
Amazon will be the biggest competitor for Apple in the tablet space. The best way to keep them away is to come out with a $249 mini tablet, just as they did with the iPod Touch (a mini iPhone). I would not surprised if we see something like that very soon.
capo
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