Kindle News and Observations

Amazon announced three new Kindles today:
  • Kindle is now an ultra-light e-reader with no keyboard or 3G support.
  • Kindle Touch is basically a touchscreen version of Kindle, with optional unlimited 3G.
  • Kindle Fire is a 7-inch tablet running a fork of the Android OS developed by Amazon and designed to be "fresh and easy-to-use," according to Bloomberg.
If Kindle Fire doesn't succeed, then no 7-inch tablet stands a chance for at least another year. But I believe Kindle Fire will succeed. I believe it will be the top-selling non-iPad tablet by December 31st, 2011. Which isn't saying much.

I don't think there will be a ton of competition between Kindle Fire and the iPad - they will not lose many sales to each other - but Kindle Fire is the first non-iPad tablet that I could see someone my parents' age wanting, buying, and actually using.

Until now, as has been noted a thousand times, there has not been a "Tablet Market." There's only been an "iPad Market" and then a bunch of failed efforts to produce iPad-like devices. Kindle Fire will either create a "Kindle Fire Market" or it will be the first entrant into a legitimate Tablet Market. That is, a market for devices that don't have 9-inch screens and run iOS.

Some random thoughts to support my beliefs:

  • $199 is a perfect price for this sort of device. A lot of people will throw $200 at a gadget just to see if they like it. A lot of other people will be desperate to find a cool gift for a relative between now and December 23rd.
  • The Kindle ecosystem is fairly mature. Millions of people understand the concept of an e-reader because they've seen, used, or owned a Kindle. Noticing that there's a cool new Kindle out - and whoa! it plays movies and has a color screen - will be enough to sell many of these people on it.
  • Amazon.com is either the first- or second-best company in the world when it comes to distributing physical objects to customers around the globe. Every Kindle they've manufactured and sold to date has been a warm-up for this.
  • As all the failed tablets have proven, software matters as much as hardware.  Amazon doesn't produce junk, and I'm going to assume that their flavor of Android will be among the best versions of that OS anyone has seen. Furthermore, Amazon has their own app store and CDN in place to set this device up for a roaring success.
  • It runs Flash, which still seems to matter to some people.
The new base-model Kindle is approaching free, and will continue to attract the curious, casual, entry-level user. It is to the Kindle ecosystem what the iPod Touch is to iOS: a gateway drug. I almost bought one this morning just because it seems so cheap and handy. But: for only $20 more I could have a touchscreen and therefore the ability to jot down notes. Do I need that? Hard to say.

Which leads to my only real concern in all this: is the Kindle lineup too complicated now? If you count 3G/non-3G as two separate devices, rather than two versions of the same device (and this is how Amazon distinguishes them), then there are currently seven different Kindles for sale (the Kindle Keyboard is still available with or without 3G, and the Kindle DX is available with 3G only). When you factor in the ad-subsidized "Special Offers" option, these 7 devices have 12 different price points (the DX and Fire are not available with Special Offers).

I think people tend to want a simple way to decide on a purchase, and there are two conflicting (and potentially confusing) ways to sort the Kindle lineup. One sort order is by device features: "Good" (Kindle) / "Better" (Touch) / "Different" (Keyboard) / "Differenter" (DX) / and "Best" (Fire). I'm calling the two keyboard versions "Different" because they're really hard to compare to the Kindle and Touch.  Some people like smaller size, others like click-y keyboards. Tomato / Tomahto.

Normally, you can assume a price increase as you go from Good to Best, but throwing Special Offers pricing into the mix violates this principle. Special Offers differ from adding 3G or more onboard storage to a device. When choosing between iPads, it's relatively easy to ask "is it worth $100 to add 16GB more storage?" and then make the decision.  With Special Offers, one has to ask the opposite question: "can I put up with advertisements on my e-reader in order to save $30, and if so, for how long?"

When including Special Offers in the pricing mix, a purchase decision could go something like this: "I want the cheapest Kindle. That's only $79. But, for $109 I could have the same thing without any potentially annoying ads. Buuut, for $99, I could have an even better Kindle and put up with the ads. Or, spend $139 to get rid of the ads. But then, for only $10 more I could add 3G. And add ads. Or wait, maybe I want the one with the keyboard. Same prices as the touch one? Oh. And they're both $189 without ads? Very appealing...but hey! for only $10 more I could have the one that looks just like a little iPad!"

Choosing an iPad is fairly straight-forward. You have to ask three questions: what color? 3G or not? how much space do I need? When necessary, you can use cost to help you answer these questions: Is it worth $130 to have the future option of paying $15+ per month for 3G access? The progression of iPad choices is in $100 increments, once you decide whether you want 3G or not.  The progression of Kindle choices is not so simple.

So, the second option would be to sort every model and option by price ("SO"= "Special Offers"):

Kindle (w/SO): $79
Kindle Touch (w/SO): $99
Kindle Keyboard (w/SO): $99
Kindle (w/o SO): $109
Kindle Keyboard (w/o SO): $139
Kindle Keyboard 3G (w/SO): $139
Kindle Touch (w/o SO): $139
Kindle Touch 3G(SO): $149
Kindle Keyboard 3G (w/o SO): $189
Kindle Touch 3G (w/o SO): $189
KF: $199
Kindle DX: $379(!)

Presumably, the DX will be retired as soon as stocks are eliminated. It's not highlighted on the Kindle Family page, and it makes no sense whatsoever anymore. Consider: You could buy 1 DX or, for the same money, you could buy one each of the new Kindle (w/SO), Touch (w/SO), and Fire.

I'm not really sure any of these price differences matter to the average upper-middle- or lower-upper-class consumer, I just wonder if the confusion they create may cause some transactional friction.

In ancillary news, Amazon announced their new Silk browser, which will run on Kindle Fire. This is a fascinating project, similar (I think) to the approach that Opera for iOS took in off-loading some of the resource-intensive aspects of web browsing from the mobile device to a server.

Amazon has more computing power at their disposal than any other organization on earth (perhaps including the US government). They are basically trying to cache and optimize the entire Internet in order to make it available instantly to Kindle Fire users.

Can Silk for iOS be too far off? Or will Apple try to adopt a similar architecture for Mobile Safari, and shut Silk out of the App Store?

And, finally, in ancillary meta-news, why is Amazon using a hosted WordPress site for a fairly major product announcement?