It’s been another interesting week of publishing news, as the content landscape continues to shift and change, so we thought this week deserved a special communication to gather some highlights in case you missed some of the buzz. We are all keenly aware of the impact the Apple’s iPad has had on us as publishers, and how that’s tipped the scales for the publishing market as a whole. Those publishers that are creating content for the iPad have generally kept their efforts focused there and not on other tablet devices because the return was viewed as minimal. The Amazon Kindle Fire, announced this week by Amazon CEO Jeff Bezos is another game changer that will push those assumptions to the next level.
Amazon’s strategy for Kindle Fire is significant because it directly competes with the iPad/Apple Store model – as both devices work with digital stores where users can buy books, music and movies. Other tablets in the market (Playbook, HP) have failed to compete successfully so far largely due to their inability to offer the volume and quality of apps in Apple’s appstore/iTunes. In the second quarter of this year, the iPad had 68% share in the tablet market. The Fire’s price point is less than half the cost of the iPad, positioning it to potentially reach the middle-America market that the iPad can’t connect with. There is speculation that the cost to build the Fire is around $150, suggesting that the real revenue strategy for Amazon here is in downloads and physical purchases from Amazon.com.
It remains to be seen whether content created for iPad will render as beautifully on the Android-based Kindle Fire. There are still some major gaps in expected functionality however, this device will appeal to the mid-market that’s been left in the cold with the higher price-point of the iPad.
Many of our sites have already put plans in motion to get their content ready for the Fire. We’ll profile more about that in weeks to come.
In case you missed it, here’s some of the background and commentary that circulated this week:
Tablet Stats:
- Cost – $199
- Plays music and video
- Display magazine and book content
- 8 GB Storage
- Has a “split browser” called Silk that works on both the physical tablet and in the Cloud
- Runs Google Inc.’s Android OS
- Integrates with Amazon Prime – for $79/year
users can stream any of 11,000 movies and TV shows, plus get the free shipping deal - Dual-core processor
- Protective 7-inch Gorilla Glass display
Media Commentary:
From the Wall Street Journal
“The move highlights how the battle lines are blurring in retail, media and technology. Apple, once known as a computer company, is now the world’s biggest music retailer and a leading phone maker. Amazon has morphed from a discount retailer of physical books to a digital department store that streams movies and sells its own gadgets.”
“Book publishers said they expected the new black-and-white Kindles and the Kindle Fire to boost e-book sales, particularly after the holidays. Before the original Kindle launched, the fledgling e-book business had lost traction and had largely been written off by the publishing community.”
From Bloomberg BusinessWeek
“What we are doing is offering premium products at non-premium prices,” Bezos says. Other tablet contenders “have not been competitive on price” and “have just sold a piece of hardware. We don’t think of the Kindle Fire as a tablet. We think of it as a service.”
From USA Today
“I suspect Amazon will sell a lot of Kindles at those prices, and agree with Forrester Research analyst Sarah Rotman Epps who expects “Amazon to sell millions of tablets” as well. “The rapid-fire adoption of the Fire will give app developers a reason — finally — to develop Amazon tablet apps,” Epps opines. She adds that she thinks “Amazon will be a strong number two (to Apple), and we expect no other serious tablet competitors until Windows 8 tablets launch.”
“Experts saw it as a negligible threat to Apple’s tablet, and cited a variety of reasons.”
“Hardly an iPad killer,” said Brian White of Ticonderoga Securities, in a note to clients today. “While Amazon’s price point, installed base, digital content and cloud ecosystem will attract a certain consumer demographic to the Kindle Fire, there is still no real competitor to the iPad 2.”
“Others agreed.”
“I think it’s more disruptive of the Android tablet market because of its price point,” said Carolina Milanesi, an analyst with Gartner. “Android competitors like Samsung will be impacted by the Fire’s price, much more so than something that has the Apple logo on it. So there’s no reason why Apple should worry today.”
“When Amazon launched its Appstore for Android in March, some wondered why Amazon would bother creating an alternative to the Android Market. Now the reason is clear: It allowed Amazon to provide access to apps on its own devices.
“Amazon will vet app submissions, just like Apple, and ensure that Kindle Fire users have access only to the apps that work on their device. And while we’re sure that Android hackers will be busy rooting the Kindle Fire, a la the Nook Color, we’re equally sure that Amazon will take as many precautions as it can to keep the device untouched.”
“The Appstore experience on the Kindle Fire is completely customized, as opposed to the free-for-all Appstore APK for Android devices. And, unlike regular Android — which can exist without the Android Market — Amazon’s approach is much more akin to the way the App Store is built into iOS.”
(photo via Mashable)
Posted by: Margot Knorr Mancini
