Friday, September 7, 2012

Amazon rolls out new Kindles while continuing aggressive pricing strategy; will better Kindle Fire tablets make publishers see the platform as equal to Apple's iOS?

How many times did Jeff Bezos tout the Android operating system driving his new line of Kindle Fire tablets? About as many times as the word "Android" is mentioned in the online copy selling those tablets on the website. In other words, never.

In fact, this almost seemed like the point of the Amazon event yesterday, to differentiate the new Kindle Fire from other Android tablets to such an extent that buyers would see it as a complete separate platform – the Kindle Fire is supported by Amazon's app stores while all other Android powered devices are powered by Google Play.

As far as I can see, nothing is yesterday's product launches changes much for publishers. Most continue who do development in house will continue to develop for iOS first, Android and Kindle second. What may change, if Amazon can make the new Kindle Fires a hit, is that the Kindle's customized flavor of Android may be the second platform to develop for.

Since April of 2010 when Apple launched the iPad, publishers have wanted to know how many tablets were being sold, the idea being that only when the market was big enough would they care to develop for the platform. Apple is very open with its sales numbers, while Amazon is less clear. Ultimately, though, the important numbers for publishers, when it comes to tablet editions, is downloads first, then unique users. These numbers are not reliant on the device maker, the publisher can figure these out themselves.

Because of this, the battle between tablets is over size of market, which platform offers an audience worth developing for. Vendors, though, want no part of this, they will support them all, or at least try to.

Today J.D. Power announced that once again Apple's iPhone topped their smartphone satisfaction survey. It was the eighth time in a row that the iPhone came out on top (and really it wasn't even close, the iPhone came out on top in all categories). The iPad, too, has a high satisfaction rating, as shown in others surveys.

As any brand marketer will tell you, the ability to take away market share is related to how satisfied customers are with the product you are attacking. Amazon is in a great position to go after other Android tablets and to firmly establish the Kindle Fire as the strongest competitor to the iPad (they probably already have achieved this).

Beating the iPad, though, is tougher challenge simply because the iOS platform is so entrenched. If you already own an iPad, especially the new one, why buy another tablet? Unlike smartphones, that seem to have a two year product cycle based on contracts, the tablet market is more like a PC. If you already have a hundred apps, dozens of books and magazines installed on your tablet, changing platforms is a pain that only the most tech crazy person would embrace.

Update: Some sites are reporting that the Kindle Fire HD will display ads on its lockscreen and that Amazon will soon announce an option to get rid of them – presumably putting the ad-free model at a higher price point. This may change the dynamic a bit and make the new tablets far less attractive for some consumers. Strange that Amazon's CEO failed to mention all this yesterday, no?

Later Update: No opt-out, according to Amazon. If you buy a Kindle Fire in the U.S. you get ads on your tablet. Good reason not to preorder that tablet, if you ask me. I love advertising, don't get me wrong, but not everywhere, and certainly not on the lockscreen of my tablet.

Unlike last year's launch, this year the
new Kindle Fires are being sold in Europe

Last year at this time there was much enthusiasm for the new Kindle Fire line then announced. The end product, though, proved a disappointment. Amazon sold a lot of tablets, but burned a lot of potential customers.

The new Kindle Fires seem like a major step up in quality and power. But we won't really know if Amazon has created a hit until after the Christmas season as the 8.9" model does not get shipped until November 20. By that time Microsoft will have launched (maybe) its new Surface tablet.

Those who had hands-on experience with the new Kindle Fires seemed to be satisfied that the user experience was an improvement over the older model.

With its higher resolution of 1920 by 1200 pixels for the 8.9" model, the Kindle Fire could seriously challenge the iPad, especially its 3G models. Let's face it, any savvy buyer who sees its $499 price, then compares the features, will probably be seriously attracted to the Kindle Fire over any other tablet unless previously committed to a platform (read iOS).

Along with its eReader and tablet announcements, Amazon also made waves with its introduction of a $49.99 per year data plan. For that low price, Amazon will offer its Kindle buyers the ability to have 250 MB of 4G LTE data at a price that will be hard to resist.

Sadly, Amazon did not introduce a new smartphone that offered the same plan.

Data usage on tablets varies tremendously among users. Those that travel a lot with their iPads, or use their iPad for business, probably rack up a lot of data. But research seems to show that most users find WiFi more than adequate for their needs.

My own first iPad was the WiFi model, the new iPad has 3G. But I cancelled by data plan for lack of use. I don't think my own user experience is that different from others. If a tablet owner also owns a smartphone they tend to check their email, look at the weather, check that sports score on their phone.

But let me be clear, anything that creates downward pressure on data plan costs is welcome. The trend is definitely heading in the other direction, with cell carriers realizing the phone minutes are not were the money will be in the future, data is.