Kindle Fire set to take on iPad
By Rachel Metz |
October 14, 2011, Friday
|
Print Edition
Print Edition
AMAZON'S unveiling of the Kindle Fire tablet computer sends a bright-hot message: The online retailer is ready to rival iPad maker Apple in an effort to be the world's top digital content provider.
It may sound odd coming from a company that pioneered online sales of physical products. But since it first entered the digital market in 2006 with its video download store, Amazon has bet consumers will pay for high-quality digital content.
In addition to the millions of items it sells, which range from toys to toothbrushes, Amazon's trove of digital content now includes more than 1 million e-books, 100,000 movies and TV shows and 17 million songs.
This is about 1 million fewer songs than iPad maker Apple Inc sells, but more than twice as many e-books and many thousands more TV shows and movies.
Amazon.com Inc CEO Jeff Bezos is confident its content is what will help the Kindle Fire do better than other tablets.
"The reason they haven't been successful is because they made tablets. They didn't make services," CEO Jeff Bezos said after his company unveiled the tablet at a New York media event last Wednesday.
Bezos, the 47-year-old former Wall Street money manager, built Amazon on exactly this sort of confidence. He started the company on the theory that a Web-based book store would resonate with consumers, since it seemed like the easiest way to browse millions of titles at once.
He was right. The company grew and Amazon began trading publicly in May 1997, despite never having turned a profit. It took five more years -- and the addition of product categories like CDs and DVDs - before the online retailer reported any net income. These days, Amazon consistently reports strong growth: In the most recent quarter, it earned US$191 million on US$9.91 billion in revenue.
Amazon has long toiled in Apple's shadow. With the arrival of Apple's iPod digital music player, which first came out in 2001, Apple figured consumers would be willing to pay for legal, high-quality digital music they could download to the devices. Apple became a major player early on, making deals with record labels to sell digital tunes through its iTunes Store in 2003. Apple added TV shows in 2005 and movie downloads a year later.
Then Amazon entered the market, rolling out its digital video downloading service in 2006 and music downloading service a year later. It was in 2007, though, that things really heated up. That's when Amazon rolled out its first Kindle e-reader, upending the book market once again by turning the focus from costly paper books to electronic ones that could be delivered quickly and cheaply to customers on a reading device.
The Kindle rapidly grew the company's e-book business, and Amazon said in May that it was selling more e-books than physical copies of books. But the Kindle Fire's ability to show e-books, surf the website, stream movies and TV shows and support apps positions it as an even better catalyst for Amazon's digital goods sales.
Shanghai Daily is available on the Kindle, iPad and the BlackBerry Playbook.
The price will probably help, too: When it goes on sale on November 15, it will cost US$199, which is less than half of the US$499 you'll pay for Apple Inc's cheapest iPad and US$50 less than book seller Barnes & Noble Inc's Nook Color e-reader.
"At the end of the day Amazon's core business is retailing and this is a way to sell more digital media on a sort of 7-inch vending machine," NPD Group analyst Ross Rubin said.
The Kindle Fire, which runs Google Inc's Android software, is clearly meant for gobbling up Amazon's digital media in particular. While most Android tablets include access to Google's Android Market for downloading games and apps, the Fire will eschew that in favor of Amazon's own app store. And while the tablet doesn't have much storage space - 8 gigabytes, compared with 16 GB on the cheapest iPad -- Amazon is offering users free Web-based storage for any digital content they buy from Amazon.
On the tablet side, the Fire's screen is on the small side, which means less space for watching movies and more panning around when surfing the Web. And it will only be able to access the Internet over Wi-Fi, not over wireless carriers' high-speed data networks.
Still, Amazon's decision to lead with content and services, rather than hardware, may help it prosper with the Kindle Fire.
It may sound odd coming from a company that pioneered online sales of physical products. But since it first entered the digital market in 2006 with its video download store, Amazon has bet consumers will pay for high-quality digital content.
In addition to the millions of items it sells, which range from toys to toothbrushes, Amazon's trove of digital content now includes more than 1 million e-books, 100,000 movies and TV shows and 17 million songs.
This is about 1 million fewer songs than iPad maker Apple Inc sells, but more than twice as many e-books and many thousands more TV shows and movies.
Amazon.com Inc CEO Jeff Bezos is confident its content is what will help the Kindle Fire do better than other tablets.
"The reason they haven't been successful is because they made tablets. They didn't make services," CEO Jeff Bezos said after his company unveiled the tablet at a New York media event last Wednesday.
Bezos, the 47-year-old former Wall Street money manager, built Amazon on exactly this sort of confidence. He started the company on the theory that a Web-based book store would resonate with consumers, since it seemed like the easiest way to browse millions of titles at once.
He was right. The company grew and Amazon began trading publicly in May 1997, despite never having turned a profit. It took five more years -- and the addition of product categories like CDs and DVDs - before the online retailer reported any net income. These days, Amazon consistently reports strong growth: In the most recent quarter, it earned US$191 million on US$9.91 billion in revenue.
Amazon has long toiled in Apple's shadow. With the arrival of Apple's iPod digital music player, which first came out in 2001, Apple figured consumers would be willing to pay for legal, high-quality digital music they could download to the devices. Apple became a major player early on, making deals with record labels to sell digital tunes through its iTunes Store in 2003. Apple added TV shows in 2005 and movie downloads a year later.
Then Amazon entered the market, rolling out its digital video downloading service in 2006 and music downloading service a year later. It was in 2007, though, that things really heated up. That's when Amazon rolled out its first Kindle e-reader, upending the book market once again by turning the focus from costly paper books to electronic ones that could be delivered quickly and cheaply to customers on a reading device.
The Kindle rapidly grew the company's e-book business, and Amazon said in May that it was selling more e-books than physical copies of books. But the Kindle Fire's ability to show e-books, surf the website, stream movies and TV shows and support apps positions it as an even better catalyst for Amazon's digital goods sales.
Shanghai Daily is available on the Kindle, iPad and the BlackBerry Playbook.
The price will probably help, too: When it goes on sale on November 15, it will cost US$199, which is less than half of the US$499 you'll pay for Apple Inc's cheapest iPad and US$50 less than book seller Barnes & Noble Inc's Nook Color e-reader.
"At the end of the day Amazon's core business is retailing and this is a way to sell more digital media on a sort of 7-inch vending machine," NPD Group analyst Ross Rubin said.
The Kindle Fire, which runs Google Inc's Android software, is clearly meant for gobbling up Amazon's digital media in particular. While most Android tablets include access to Google's Android Market for downloading games and apps, the Fire will eschew that in favor of Amazon's own app store. And while the tablet doesn't have much storage space - 8 gigabytes, compared with 16 GB on the cheapest iPad -- Amazon is offering users free Web-based storage for any digital content they buy from Amazon.
On the tablet side, the Fire's screen is on the small side, which means less space for watching movies and more panning around when surfing the Web. And it will only be able to access the Internet over Wi-Fi, not over wireless carriers' high-speed data networks.
Still, Amazon's decision to lead with content and services, rather than hardware, may help it prosper with the Kindle Fire.
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