Weekend Tech Blog: After the Amazon Kindle Fire, the real bonfire

Amazon has upturned the tablet market with its new Kindle Fire color tablet, forcing companies and the public alike to rethink the tablet's role

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The Kindle family.

Amazon has upturned the tablet market with its new Kindle Fire color tablet, forcing companies and the public alike to rethink the tablet's role

Quick: Is this a campfire or a forest fire? That question is burning throughout the tech industry, even at mighty Apple. On Wednesday Amazon.com introduced the Kindle Fire, its $199 multimedia color tablet (along with three new black-and-white Kindles). The Fire has already fired up buyers, and the blogosphere is full of dire predictions about how it will singe every aspect of the nascent tablet industry.

The doomsayers may be right. Clearly, this launch opens the next chapter in the tablet craze, which started only 22 months ago when Apple introduced the iPad. There’s no telling how many companies will be affected.

You’ve probably been inundated with tablet descriptions, so I’ll try to keep mine short: The Fire is roughly the size of the older black-and-white Kindle and weighs under a pound. It has a color screen and an allegedly super-fast browser. It's WiFi only. It lets you tap into — and buy more of — Amazon’s seemingly endless array of books, movies and TV programs, music, and apps. It will sell for $199. For a better look, here are two videos from CNET and Business Insider showing the Kindle Fire at work.

Let’s cut to the chase: The game-changing fact is that the Kindle Fire has redefined what a “single purpose” device is, and thereby flipped the tablet industry on its ear. Tablet purveyors have led us to believe that single-purpose devices — dedicated book readers, etc. — are dead, or at best poor investments when you can have a tablet that does everything. Why limit your options? With tablets you can read, write, listen to music, watch music videos, play games, learn new things.

Then last Wednesday, Amazon said to the tablet industry: It’s not that we do too little. You do too damn much, and overcharge for it. We’re changing the game plan. From now on “single-purpose” means not just e-book reader but play platform — reading/watching/ listening/gaming/web browsing. We think people will gladly pay 50 to 60 percent less for a device that hones in on the services they really want. Oh — and we have the supply chain and marketing already in place to feed their desires. Ka-ching! goes the Amazon cash register. (For a terrific account of how the Kindle Fire came to be — and an equally good analysis of Amazon.com as a 21st century marketing organization — read this profile on Forbes.com. Highly recommended.)

That’s audacious marketing. It presumes that people now know enough of what tablets can do to refine their reasons for buying one. The gazillion-dollar question is whether the public will agree. After all, the Fire has limited on-board memory, no webcam, no SD card slot or extra port  for expansion, no microphone, no Bluetooth, no GPS. 

Granted, this is Version One. The iPad originally had no webcam; it still doesn’t have an SD card slot. And it hasn’t exactly sold poorly

What does the techno press think? Here’s a sampling of opinions:

• Few think it’s an iPad killer — here’s a head-to-head comparison of the Kindle Fire and iPad from computer industry stalwart eWeek — but it may rock the Nook Color’s world.

• It will force Google into a defensive position. Will there be a $199 Google tablet soon?

• Kindles will eventually be free.

• And finally, every other Android tablet manufacturer is now looking bad. Scant days after the announcement, Android tablet prices are dropping like flies: The HTC Flyer, down $200 at Best Buy; Nook Color available as low as $149, down from its $245 retail price. Expect more cuts in coming weeks as November 15, the announced Kindle Fire delivery date, comes closer.

The ultimate proof of Amazon’s argument will be how well the Kindle Fire sells. The news is mixed thus far: According to InformationWeek, sales reached 90,000 the day after it went public. The day after the iPad went public, its sales hit 300,000. But the Fire is already popular among Wall Street Journal readers. As of Friday afternoon, 10,000 responded to a ”Will you buy it” survey posted online by the paper. Slightly more than 63 percent said “yes.”

One sure thing will come out of this introduction: it will finally put to rest Steve Jobs’ infamous remarks about seven-inch tablets being DOA. I wonder if Apple's management team has any regrets about embracing Jobs’ view. Will the new managers be brave enough to go against the Dear Leader’s wishes and produce a smaller version?

Amazon was also busy on other fronts this past week. When it comes to video, it has been playing second fiddle—or perhaps second triangle — to Netflix. But then Netflix split off its DVD-by-mail service, raised prices 60 percent — and lost half a million subscribers, devalued its stock as much as 57 percent. Hit movie source Starz will stop supplying movies to Netflix next year. Now Amazon is rumored to be looking at buying out Netflix's movie streaming. Some analysts think Netflix split its streaming and DVD components to make that sale.

Even if that doesn’t happen, Amazon is strengthening its hand while Netflix weakens. It announced it as acquired the rights to stream major older 20th Century Fox films, from Mrs. Doubtfire to Butch Cassidy and The Sundance Kid, plus 2,000 episodes of such TV episodes as 24 and Arrested Development.

On the book front, Amazon made news that didn't help its image. CNN Money came out with a strongly worded piece alleging that Amazon is tightening its grip on the entire book-publishing chain, noting “how deeply Amazon's tentacles reach into all parts of the industry, including its growing interest in inking deals with authors to publish some of the hit books Amazon sells.”

That follows news from a few weeks ago, reported by multiple sources, that Amazon is looking to start a Netflix-like streaming book service that would allow people to pay a subscription and download as many books as they liked. It would be limited to older titles, however.

As the Kindle Fire assumes a more prominent place in the consumer market, there will no doubt be renewed attention on Amazon’s frosty relations with the music business as well as questions about its app store—from, of all companies, Apple. The next few months should interesting for those nice folks at South Lake Union.

In the meantime, do you buy the premise of the new Kindle Fire, or do you demand all those other features? What do you want from a tablet? We'd love to hear from you.


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