Kindle Fire HD hurts Microsoft more than Apple

http://www.cringely.com/2012/09/07/kindle-fire-hd-hurts-microsoft-more-than-apple/

by evo_9 • 14 years ago

25 36 14 years ago

cringely.com

DaNmarner• 14 years ago

> “if Apple gives up its position” which it clearly hasn’t.

so, moot?

> Amazon is copying Apple’s playbook, page-by-page...

> What, after all, has Amazon (or Microsoft) actually invented here? Nothing. They’ve emulated Apple at a lower price point and to some extent disintermediated the mobile carriers.

Not according to Jeff Bezos, who spend a good portion of his presentation explaining how Amazon make money with their pricing strategy of the Kindles. The difference between iPad and Fire HD is not in price, but in their producers' business models.

The author clearly doesn't get it.

Tloewald• 14 years ago

The consumer doesn't care what the business model is. Microsoft's problem is that all its entry points into the market are being taken away. If it wants to go cheap it has to deal with the $299 Fire HD and the $199 (sort of) Nexus 7. Apple already straddles $399-$499. Those are brand name competitors with premium products and decent or better ecosystems.

It's not clear what Amazon's business model is. Bezos claims he wants to make money on content and not lose too much on devices, but he's losing money on Prime too. It seems to me Amazon's model is to get as much market power as possible -- ideally a monopoly -- and then charge rents, but I don't see how any such monopoly would be sustainable (at least without the DOJ foolishly helping). The one area where Amazon (temporarily) held a near monopoly was ebooks and this is precisely what it did (it still tries, only more subtly).

objclxt• 14 years ago

> Not according to Jeff Bezos, who spend a good portion of his presentation explaining how Amazon make money with their pricing strategy of the Kindles

He may have explained how they want to make money, but I don't recall Amazon or Jeff Bezos ever having stated the Kindle Fire has made them a profit. Indeed, Amazon have been very reluctant to even release hard sales figures for the Kindle Fire.

greedo• 14 years ago

Amazon's fans seem to think that Amazon can sell a tablet at near cost and make money on either digital sales (movies/books/audio) or as a kiosk to sell physical wares.

What makes them think that they can outdo Apple in the first category? Apple which clearly has a huge installed base, yet runs the iTunes store at break even.

And using tablets as a kiosk might add some value to Amazon, but is it really necessary? Are iPad/Nexus 7/Surface users going to magically find a better/cheaper online merchant?

TazeTSchnitzel• 14 years ago

> What, after all, has Amazon (or Microsoft) actually invented here? Nothing. They’ve emulated Apple at a lower price point and to some extent disintermediated the mobile carriers.

Well, perhaps Amazon. But while Microsoft have emulated Apple in hardware a little, they certainly haven't with the OS. Windows Phone 8 and Windows 8 have a very different, very fresh UI. They only use some of the same gestures, even.

AlisdairO• 14 years ago

And, indeed, MS were responsible for a bunch of pre-ipad touch research that helped shape current UIs.

jpxxx• 14 years ago

Who is this author? Since when does "disintermediating an industry" mean "selling and subsidizing the products of an industry"?

And what pundits -didn't- predict a larger Kindle Fire? I thought that was a signed and sealed rumor straight from WSJ+Amazon themselves.

Toshio• 14 years ago

> "Who is this author?"

http://en.wikipedia.org/wiki/Robert_X._Cringely

eli• 14 years ago

The author has been around quite a long time, but he is better known lately for his (perhaps intentionally) counterintuitive opinions and goofy predictions. I think, sadly, he is going more for pageviews than credibility.

But to answer your second question, "Amazon next week will announce two 7-inch Kindle Fire models, one with new hardware and the other an updated version of the original, CNET has learned. That's counter to rumors it would launch a larger version." Oops. http://news.cnet.com/8301-1035_3-57504515-94/kindle-fire-won...

cooldeal3• 14 years ago

>The tablet market was already broadening, flattening, and moving down market before yesterday’s Amazon announcement

Right, but Microsoft is trying to bring it up market with the Surface Pro and other small x86 tablets(many of which seem to come with a keyboard or a laptop style dock, sometimes optional). Eg. see http://www.engadget.com/2012/08/30/hp-envy-x2-laptop-tablet-...

As I posted in another comment a few days ago, They will be expensive, but far more capable and powerful(heavier and less battery life too). For example, they can run the full Visual Studio or Eclipse.

You can take a Surface Pro and a Kindle Fire with you, run Eclipse with the Android SDK loaded, connect the Kindle Fire to the Surface and take the program you just wrote on the Surface and run it on the Kindle! Or write your code while on a roadtrip or on the subway and debug it on your Android or Windows phone(don't know how Hackintosh it can get for running apps on the iPhone).

Can you do that with a Kindle, iPad or any other tablet on the market right now, which are used by most people as consumption devices?

Where Microsoft is competing with the Kindle, Android tablets and the iPad is with Windows RT, which is a different beast(and costs less than $100 for OEMs + they are rumored to get kickbacks on ecosystem sales). The only big advantage Microsoft has right now in this space is Office RT. Amazon's tablets are oriented even more towards content consumption(read Amazon's content) than the iPad. It all boils down to how much consumption vs. 'creation' the consumers want to do on their tablets, or if they want to get one device that does it all.

archangel_one2• 14 years ago

So these new Surface Pro things are going to be like a current ipad-style tablet, but with a keyboard, heavier, have shorter battery life and be more expensive. That sounds very much like a device I already have, which is called a laptop. It runs Eclipse pretty well on the rare occasions I want it to.

Less than $100 is still a pretty hefty tag in this market too; that's half the price of a Nexus 7! I think Microsoft are going to have to learn that this market isn't going to allow them the huge margins they've traditionally enjoyed on PCs.

cooldeal3• 14 years ago

>So these new Surface Pro things are going to be like a current ipad-style tablet, but with a keyboard, heavier, have shorter battery life and be more expensive. That sounds very much like a device I already have, which is called a laptop. It runs Eclipse pretty well on the rare occasions I want it to.

This reminds me of the folks that discounted the iPad because it was not good as a smartphone for portability(oversized iPod Touch) and much less powerful than a laptop. Predictions based on personal anectodes in a billion plus device market are a dangerous thing.

I agree that the Surface Pro is trying to create a new market here(spaced between iPad style tablets and the laptops/MB Air/Ultrabooks which is an uphill task, but I do think there are a lot of people who want a no-compromises powerful portable tablet for on-the-go use.

rbanffy• 14 years ago

Microsoft, it seems, will never learn it's not about adding features, but solving a problem better than your competitors. That, more often than not, is about removing the bad stuff, not adding even more bells and whistles.

lmm3• 14 years ago

>Apple is the innovation leader. What, after all, has Amazon (or Microsoft) actually invented here? Nothing.

It's not like Apple invented anything either. As with most things they do, the ipad's secret was not innovation but polish, taking existing technology and putting in the integration and software effort to make turn it into a great user experience. I'm not saying this isn't valuable, but it's fundamentally no more or less innovative than what Amazon's doing (making the same experience available at lower cost).

Of the three Microsoft is the truly innovative company. E.g. many of the ideas behind iOS' sandboxing mechanism originated at Microsoft Research.

berntb2• 14 years ago

>>the ipad's secret was not innovation but polish [which is no more innovative than selling products cheap to earn money on content, Amazon Kindle style]

Uhm, no one on the planet knew how to build an affordable pad that would be interesting outside niches. Microsoft tried for a long time, too.

Then comes the iPhone/iPad. The market, the world, is different.

I do smell a bit of spin in what you wrote... :-)

lmm3• 14 years ago

If you're talking about changing individual people's lives, I'd be willing to bet that the amazon effort will eventually reach more people than apple did, simply because the market at $299 is a lot bigger than that at $499.

If you're talking about showing the world what's possible, those of us who had tablets years before the ipad could see that. The software was clunky, but if you were willing to spend time learning and work with it (which, yes, is a niche market) you could do everything you can today.

What apple did was undeniably a huge step forward. But I don't think it was qualitatively different from those who came before or after, and I think chalking up their success to "innovation" is missing the point.

ams6110• 14 years ago

just as Apple had to accept competition in the MP3 player market, Cupertino will have to adapt to the Kindle Fire HD.

Did Apple "accept" competition in the MP3 player market? There were mp3 players before the iPod. Apple came into the market and absolutely owned it. Portable music = iPod. That's the end of the story.

inthewoods• 14 years ago

I disagree - I've been considering buying a tablet just for my kids, and Amazon has put a better option on the table for parents. I can't tell you the number of times I've found my kid browsing some Youtube videos or in the Apple store after being upsold something in the game itself.

So for me - and I expect for other parents if they can get the word out - Amazon is making a play for my Apple business.

Still amazes me that Apple didn't see the kids/children's market and provide a better solution than the restrictions - I mean they are ok, but the lack of separate profiles means I'm constantly tweaking them as I work on the iPad, then my son grabs it, etc.

a45l986• 14 years ago

Cringely is at his most prophetic in the comments when he says: If Facebook drops much lower Microsoft might make a play.

Try to list all the reasons Microsoft should not buy Facebook.

Try to list all the reasons Facebook would resist acquisition by Microsoft.

ChuckMcM• 14 years ago

I'm not a big fan of Cringely's but I do enjoy this particular insight. It is unclear to me that Microsoft is even in the same game here because of their lack of content.

Specifically Amazon innovated in the book space, its in their roots and they have leveraged the crap out of it. Apple if you recall innovated in the music space. The similarities are stunning, take something people continually consume, is fashion driven, and reduce the friction of that consumption, golden. The 'chunkyness' (in terms of price per transaction) is bigger in books than in music but the mechanisms are similar. All we need now is NetFlix to introduce a dedicated 'video' device, then move up to phones and tablets.

Kindle Fire HD hurts Microsoft more than Apple

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