Amazon’s tablet related announcements on Thursday were similar to a bell ringing for round two of a prize fight. The opponent is clearly Apple, but Amazon is coming at the category leader in an unconventional manner.
“We want to make money when people use our devices not when people buy our devices…We don’t need you to be on the upgrade tread mill,” said Amazon CEO Jeff Bezos, taking aim at Apple while hosting an event that seemed strikingly similar to one of that companies famous launch events. Even former Apple executive and current Amazon board member Jon Rubinstein was in the audience.
Instead of relying on the hardware specifications to sell its devices, Amazon is using its breadth of online services as well as competitive hardware features (unlike the first generation Kindle Fire) to engage the consumer in a convenient tablet experience. And we continue to believe that creating a unique experience is an important aspect of not only capturing the consumer on the initial device sale, but of keeping the consumer engaged for an extended period.
As expected, Amazon will release four new tablets that expand Amazon’s reach for potential consumers. The two 7” devices and two 8.9” devices allow Amazon to cover multiple price points and usage scenarios from the low, mid, and high end, for the Wi-Fi and cellular-connected. Amazon has helped to redefine feature expectations for the low- and high-end of the tablet category, setting a new low end for devices from a major brand with the $159 Kindle Fire to the high end with the $499 8.9” device that includes cellular connectivity. The addition of Bluetooth also allows the Kindle Fire to generate significant accessory attach opportunities, as noted by Stephen Baker.
The Kindle Fire devices have access to over 22 million movies, TV shows, songs, magazines, books, audiobooks, apps and games. While watching a movie consumers can get information about actors on the fly using IMDB, an Amazon property. While reading a book, consumers can stop reading and pick up where they left off by listening using Audible.com, another Amazon property. Consumers can also trial Amazon Prime for a month for free.
What was apparent was while many in the industry have been pitting Amazon against Google, which recently released the Nexus 7, Amazon made no mistake about who it was targeting. Bezos on numerous occasions compared the new Kindle Fire devices to the iPad, outlining how Kindle Fire stacked up better. Amazon is going after Apple in the tablet market and it is using its unique set of assets to highlight strengths and differentiating features and capabilities.
Amazon’s ambitions are high and they have many assets they can leverage to offer a distinct tablet experience, but they are limited by geography. Most of their services are offered only in the U.S. Still, what Amazon’s efforts show is that there is a way to compete with Apple beyond the realm of hardware features by developing and stressing unique capabilities.
