Amazon Kindle’s the Fire

Earlier today we saw another bold bet by Amazon – this time with Kindle Fire.

Kindle Fire is a 7 inch color tablet computer and betters the popular Kindle ebook reader in several areas and comes with a ‘tablet’ price tag of $199.

All features apart, and assuming the product is a good one, on the surface it does appear that comparisons with Apple’s iPad are much warranted especially in the pricing department.

But then the discussion drifts away from Amazon’s core competency- they are the world’s biggest online retailer. Period. And what better way to think about Kindle Fire than an extension of that distribution channel

So Kindle Fire is just another device on the new mobile distribution channel for Amazon. Consumers are doing more today with mobile devices than before. And that inevitably includes Ecommerce. ie. Amazon is really not interested in the device per say- all it is trying to do is to ensure that a) it’s commerce channel to mobile users does not get disrupted by competitors ( think apple bookstore, apple store etc) and b) it’s able to reach those new consumers who are using mobile devices more and more for actual commerce purchases.

Coupled with the fact that Amazon relaunched it’s store front recently to be more usable by mobile devices AND that Kindle Fire sports a  new browser called ‘Amazon Silk’ this seems to be all the more true.

Also just like brick and mortars ‘invest’ in distribution, it is quite likely that Kindle Fire is actually an investment on Amazon’s financials towards building out this new mobile commerce channel.

So what will it do to the tablet market anyways- seems like Kindle Fire is going to polarize the tablet market into the high end and low end right away. Till date every other manufacturer was aspiring( or rather forced by component suppliers- whichever way you look at it!) to play Apple’s game- i.e. around $500 + per device.

And in this polarization, Apple will loose a small amount of market share- but on the contrary it may just continue. Either way the market is present and it’s growing.

Will any of the 29 Mil ‘Apple converted’ iPad users want to use another device for their purchases- Probably yes- how about a cheap tablet for the living room or bedroom. So this could actually grow the market further!- Anyone for 2 tablets in every home? or maybe an iPad for office and a Kindle Fire for home?

Will they ditch their iPads for a Kindle Fire- Unlikely. Apple’s UI and design wins have many devoted followers who are willing to shell out that much extra even in a down economy and for the next upgrade.

Will this appeal to new tablet users?- yes certainly but again this could end up enhancing Apple’s iPad as the premium product – and there are tons of new users who want a premium product.

What about Apps- this is probably an area where Amazon has work to do but then if it can help drive more commerce traffic, it may be content to just provide some basic functional apps.

 

The real question is – what happens to all the rest out there- who are kind of ‘Lost in the middle’- i.e. high on price, low on features/ brand appeal, invisible on product positioning and more importantly low on current sales. Will they be able to survive the combined onslaught of a ‘high end’ iPad and a ‘ basic’ Kindle Fire? Think Samsung, Sony, Motorola, Blackberry etc. Amazon has just ‘kindled’ the fire!

 

And Now suddenly HP’s ‘touchpad dumping’ looks like a smart move!