Saturday, October 1, 2011

Do I really need the Amazon Kindle Fire?

Okay, I admit it. I'm as much of a geek as the next person, so when I see something cool and new like the Amazon Kindle Fire tablet that was unveiled earlier this week, my first instinct is to say "I want one!" There's no rationale behind it, no logic, just the primal instincts of a geek being drawn to a new bright, shiny object.

But now that the initial excitement has worn off, I have to say that I'm underwhelmed by the specs. No MicroSD slot, a paltry 8Gb RAM, no camera, no mic, no Bluetooth or HDMI support, and no 3G (at least not in the first release). An iPad killer this is not, although I was pleasantly surprised that it will include a micro-USB 2.0 port. Sure, the price point is compelling, and you can't really expect too much for $199, but that still begs the question, what is Amazon's target audience?

Perhaps the Fire is the tablet counterpart to the Google Chromebook. The hardware specs don't need to be impressive, because it is assumed that users will store all of their content in the cloud, reducing the need for local storage. In other words, the Fire is being aimed at a different audience than the iPad, which is designed to be as much of a productivity tool as a media client.

The range of apps available through the Amazon App Store is paltry in comparison to Apple, and Apple is likely to retain a huge advantage in this area for the foreseeable future. Interestingly, the Fire will not be able to access Android Market, although I suspect some enterprising hacker will figure out a jailbreak for that restriction within days of the Fire's release. As with Apple, the Amazon App Store is a walled garden, in which all apps undergo an approval process.

But I suspect that Apple isn't really Amazon's real target here. From a technical standpoint, the Fire doesn't appear to have been conceived as an iPad killer, and there are now so many devices competing in the high-end tablet space where the iPad reigns supreme that it doesn't make sense to add another one to the mix. Besides, Amazon clearly isn't concerned about making a profit on sales of Kindle Fire tablets. The device itself is a loss-leader for them, as the retail price is actually lower than the manufacturing cost, according to this analysis. The real long-term strategy behind the Kindle Fire is to draw new customers into Amazon's media ecosystem and make them dependent upon it. Anybody who purchases a Fire will receive a free one-month membership for Amazon Prime, which provides unlimited two-day shipping and, more importantly, access to a growing library of streaming movies and shows. As Business Week points out:
Amazon Prime may be the most ingenious and effective customer loyalty program in all of e-commerce, if not retail in general. It converts casual shoppers...into Amazon addicts. Analysts describe Prime as one of the main factors driving Amazon's stock price—up 296 percent in the last two years—and the main reason Amazon's sales grew 30 percent during the recession while other retailers flailed. At the same time, Prime has proven exceedingly difficult for rivals to copy: It allows Amazon to exploit its wide selection, low prices, network of third-party merchants, and finely tuned distribution system, while also keying off that faintly irrational human need to maximize the benefits of a club you have already paid to join.
If anybody should be nervous about the Kindle Fire, it should be Netflix and B&N, not Apple. The iPad dominates the higher end of the tablet market, and will likely continue to do so for the foreseeable future. The lower end of the market, however, is still up for grabs, and that is where the Kindle Fire is likely to dominate. Backed by Amazon's leviathan marketing machine, considerable resources and a vast media ecosystem, the Fire is likely to become yet another huge success for Amazon.

But none of this answers the question of whether or not I need one. I already own a first version iPad, which I use mainly for taking notes in meetings, watching movies on planes and as an RDP client for my home network. With the addition of the awesome Clamcase keyboard, my iPad doubles as an extremely effective netbook when I need it to. So when the iPad 2 was released last year, I decided to give it a miss, as it didn't offer any compelling new features that justified an upgrade. Instead, I figured I would wait another year to see what the iPad 3 had to offer, and that is still the plan.

With that said, there is still something.... I don't know.... compelling about the Kindle Fire. I'm a big fan of the 7" form factor for reading e-books, watching movies and browsing web content, and the addition of a MicroUSB port that supports the addition of an external hard drive is a killer feature for a movie buff like me. As a consultant, I spend a lot of time in hotels and on airplanes, where WiFi speeds are often insufficient for streaming media from the cloud, so the ability to carry around my media on a flash drive would be huge (the failure of the iPad2 to provide USB support was one of the major factors in my decision not to buy one). Even so, this one feature alone is not sufficient justification for replacing my iPad.

If I didn't already have an iPad, the Kindle Fire might be a no-brainer for me, but I certainly don't need two tablets. It would be like having both a notebook and a Chromebook, which I just can't see the need for. Still, the Kindle Fire will certainly be a huge success without people like me buying one. If you don't already have a tablet, you can't really go wrong with a $199 device that provides you with access to pretty much all the media content you would ever need.

UPDATE: My colleague Chris over at Technologese adds some great technical insights into Amazon's strategy, and as usual, is right on the money.

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