With Kindle Fire, Amazon's ready to fight

2011-09-30 11:15
Amazon has signalled its intent to tackle Apple with its Kindle Fire. (AP)

Amazon has signalled its intent to tackle Apple with its Kindle Fire. (AP)

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

San Francisco - 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.

Amazon's trove of digital content now includes more than one million e-books, 100 000 movies and TV shows and 17 million songs. This is about one 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 that its content is what will help the Kindle Fire do better than others who have trotted out tablets.

"The reason they haven't been successful is because they made tablets. They didn't make services," CEO Jeff Bezos said in an interview after his company unveiled the tablet at a New York media event.

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.

Profit

He was right. The company grew rapidly 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, DVDs and consumer electronics - before the online retailer reported any net income. These days, Amazon consistently reports strong growth: In the most recent quarter, it earned $191m on $9.91bn 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 major record labels to sell digital tunes through its iTunes Store in 2003. Soon the iPod became more multimedia-savvy: Apple added TV shows in 2005 and movie downloads a year later.

Amazon soon entered the market itself, rolling out its own digital video downloading service in 2006 and music downloading service a year later.

It was in 2007 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 web, stream movies and TV shows and support apps positions it as an even better catalyst for Amazon's digital goods sales.

Digital media

The price will probably help, too: When it goes on sale on November 15, it will cost $199, which is less than half of the $499 you'll pay for the cheapest iPad and $50 less than book seller Barnes & Noble Inc.'s Nook Colour e-reader. This leaves buyers with plenty of money left over to spend on content.

"It's important to remember at the end of the day that Amazon's core business is retailing and this is a way to sell more digital media on a sort of 7-inch [18cm] 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 favour of Amazon's own app store.

And while the tablet doesn't have much storage space 8GB, compared with 16GB on the cheapest iPad - Amazon is offering users free web-based storage for any digital content they buy from Amazon.

Another weapon in Amazon's arsenal: In hopes of keeping Kindle Fire users purchasing both digital and actual items, the tablet includes a free month of Amazon's premium shipping service, Amazon Prime. Prime, which costs $79 per year, gives users unlimited two-day shipping on any items they buy from Amazon, as well as free access to a library of 11 000 streaming movies and TV shows. This is about half of what Netflix Inc's streaming library has.

Amazon has never said precisely how many Kindle e-readers it has sold, but its higher sales of e-books than print books indicates it's a strong performer. Given this, and the general popularity of tablets, expectations are high for the Fire.

Sales

Rubin thinks consumers will become fans of the tablet, saying it offers a more complete media consumption experience than what Barnes & Noble has provided with the Nook Colour, which came out last year.

Forrester Research analyst Sarah Rotman Epps thinks Amazon could sell as many as five million Fires by the end of the year, but thinks it will probably be closer to three million since it's coming out so late.

Apple, by comparison, has sold nearly 29 million iPads since it released the first one in April 2010, and over nine million in the June quarter alone.

Of course, in addition to being the new tablet on the block, the Kindle Fire faces other challenges. On the content side, the Amazon Appstore currently includes more than 16 000 apps, but this is just a small fraction of the 425 000 apps in Apple's App Store, over 100 000 of which are tailored specifically for the iPad.

On the tablet side, the device'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, Epps believes Amazon's decision to lead with content and services, rather than hardware, will help it prosper with the Kindle Fire.

"Apple will still be the clear market leader, but Amazon will still be a clear number two because of that strategy," she said.

- AP

Read more on:    amazon  |  mobile
NEXT ON NEWS24X

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
9 comments
Add your comment
Comment 0 characters remaining
 

Inside News24

 
 
Traffic
Lottery
 
  • Wednesday Sir Lowry's Pass - 17:57 PM
    Road name: Old Sir Lowrys Pass Road
    TRAFFIC LIGHTS not working at Bezweni Road
  • Wednesday Cape Town - 17:56 PM
    Road name: Buitengracht Street
    TRAFFIC LIGHTS not working at Riebeeck Street
 
More traffic reports...
 

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Escape winter, head to Mauritius

Escape winter by spending 7 nights in Mauritius' tropical bliss from R13 215 per person sharing. Includes return flights, airport transfers and accommodation. Book now!

Kalahari.com - shop online today

Get many eggs in one basket!

Gaming bundles: 2 Super Hits games for R99, 3 Disney games for R99 and more + exclusive accessory bundles only available on kalahari.com. While stocks last. Shop now!

25% off bestselling books!

The Real Meal Revolution by Tim Noakes, Jeffrey Archer’s Be Careful What You Wish for, Man’s Search for Meaning by Victor E. Frank and many more titles. Shop now!

Up to 25% off electronics

Buy top electronics and save up to 25%. Such as kalahari.com’s 1# selling product the gobii eReader, Patriot X Porter flash drive, Asus Nexus 7” 3G tablet, Samsung Galaxy SIII, Lenovo G580 Notebook and many more. Shop now!

DStv HD PVR Decoder now R949

The DStv HD PVR Decoder has further revolutionised the television experience with lifelike viewing, sharper images, more vibrant colours and precision picture quality. Now R949, save R550. Offer valid while stocks last. Shop now!

Up to 30% off appliances & homeware

Save up to 30% on appliances and homeware this Easter! Offer valid while stocks last. Shop now.

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

Nokia E7

Your mobile office Real-time emails with Mail for Exchange. Easy access to...

From R3499.00

I'm shopping for:

Horoscopes
Aquarius
Aquarius

You may find yourself fascinated by something which could draw you in to obsessively exploring this subject in depth....read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.