Kindle Fire, Nook Color 2, and iPad

It’s the first time that I’ve been more excited about the release of a Tablet than of a Kindle. In fact, both Kindle Fire and Nook Color 2 are amazingly exciting.

Why Kindle Touch and Kindle 4 are not that exciting

Part of it has to do with the painful loss of the keyboard in the new Kindles and part of it has to do with not appreciating the two big things the new Kindles provide – Touch and a $79 price.

It would be inappropriate to say that Touch is the equivalent of an extra cup-holder in a car (It’s more like going from no cup-holders to cup-holders). However, it isn’t really about reading.

The $79 price is meaningful because we expand the market of people who have access to ebooks. However, a $79 Kindle 4 isn’t game-changing when you have $99 Kindle 3s and $99 Kindle Touches.

The new Kindles represent the best and worst of Amazon.

  1. An excessive committment to incremental improvement – to the point that Kindle 4 is more like Kindle 2.75 (3 – .25) and Kindle Touch is Kindle 3.25.
  2. A ridiculous committment to getting Kindles into the hands of everyone who has ever even thought about reading a book. Ridiculous in a good sense.

But they aren’t game-changers. The real game changers are Kindle Fire and Nook Color 2. First, let’s see something that most people don’t know about i.e. the rise of Android Tablets.

27% of Tablet Sales in the last Quarter were Android Tablets – Even before Kindle Fire and Nook Color 2 arrived

Fierce Wireless has an eye-opening article about the growth of Android Tablets.

Strategy Analytics report -

  1. iPad had 66.6% of the Tablet Market in the third quarter of 2011.
  2. Android Tablets captured 26.9% of the market. Up from 2.3%.
  3. Apple had 11.1 million iPad shipments. Android Tablets numbered 4.5 million shipments.

Let’s think about that – Android Tablets went from 2.3% of the Tablet Market to 26.9%.

B&N’s Nook Color is probably single-handedly making up 10% of the Tablet Market at this point. Once Kindle Fire and Nook Color 2 come out – they might well account for 25% to 50% of the Tablet Market themselves.

Heresy. It’s absolutely wrong to even suggest that such inferior Tablets might eat up so much of the market.

Yet, it’s the truth.

Let’s see why.

Kindle Fire and Nook Color 2 are competing against each other, and against the iPad

It’s quite easy to see why Kindle Fire and Nook Color 2 are in competition. Kindle Fire is basically Amazon realizing that Tablets are a market and a channel. It has seen B&N prove that Tablets not produced by Apple can do well. And it’s acting – better late than never.

Why Kindle Fire and Nook Color 2 are competing against iPad becomes clearer when you think about what an iPad is.

An iPad is -

  1. A device lots of iDevice owners are buying. Let’s not discount the importance of this.
  2. Possibly the beginning of a post-PC world where everyone prioritizes consumption over creation.
  3. An expensive toy.
  4. Mobile computing done right.
  5. A killer device which is just missing the particular use that will make it indispensable. Note: There are arguments that watching movies, checking email, accessing Facebook, surfing the Internet, etc. are all the killer uses of the iPad. Which, if true, makes the case for the rise of Kindle Fire and Nook Color 2 stronger.
  6. A status symbol that you can use as a status symbol without being overly nouveau-riche.
  7. A very well marketed product.
  8. Shiny new technology.
  9. A way to sell all sorts of content.
  10. Revolutionary – though it isn’t quite clear what the revolution is. Or whether it is the iPad that will complete the revolution.
  11. Directionless now that there is no master salesman to tell us just why it is revolutionary.
  12. An actual ‘Personal’ computer. The first time ever that a computer was really personal and understood your thoughts and feelings and gave you emotions like that first movie you watched holding your sweetheart’s hand. Oh, iPad – you really do understand me.

If you look at that list, Kindle Fire and Nook Color 2 (and, for that matter, Nook Color) can do all the meaningful and possibly meaningful things on that list. Except being a status symbol (which, in a world of 7 billion people, should not be discounted).

The things that people use iPads for i.e. movies, surfing, email, etc. – are all quite possible on Kindle Fire and Nook Color. In fact, the 7″ size is actually better suited (for most people) for some things such as Email and Surfing the web.

A Tablet at $500 can reach tens of millions of people. It can be the best possible status symbol that these tens of millions of people are the chosen few – The 0.5% of the world’s population that can afford a $500 device.

A Tablet at $200 can reach hundreds of millions of people. Provided the Tablet really is ushering in a revolution, the $200 Tablet becomes far more important than the $500 Tablet. $200 Tablets can take those 6.95 billion people who are left out of the ‘Elite Revolution of the Tablet’ and give at least half a billion of them a chance to participate in the magic and revolution of Tablets. To be able to watch movies on a 7″ or 10″ screen while they sit on the couch in front of their 30″ TV screens. To send email via a device that has a larger screen than their cellphones and that is not as far away as their PC.

That’s the thing that everyone seems to be missing. Revolutionary devices aren’t limited to Marie Antoinette and the nobles - cake is.

If Tablets really are revolutionary, then Kindle Fire and Nook Color 2 will end up being the actual revolutionaries

Consider the scenarios -

  1. Tablets are revolutionary but only for people who can afford a $500 device. That certainly limits market size and makes it hard to argue it’s anything other than a ‘revolution for the Elite’. It also guarantees iPad will never lose – unless someone makes a $750 tablet with purple headphones. You have to admit - it would be a pretty hollow revolution if it only affected people able to afford $500 devices with no known killer use case scenario.
  2. Tablets are revolutionary for everyone. In which case a $200 Tablet that sacrifices status symbol capabilities and aesthetic flourish, but keeps 90% of the ‘actual usage value’ of Tablets, will become the real revolution.
  3. Tablets are just toys. In this case all Tablets will do well until people move on to the next shiny toy.

At $200 and $250 (probably), Kindle Fire and Nook Color 2 can reach 10 to 20 times more people than a $500 iPad. Apple knows this and knows that it must release a $300 mini iPad soon. However, and this is key, the success of the Nook Color and the supposed/probable/imminent success of the Kindle Fire is going to motivate every single technology company to get back into Tablets. Achilles has a heel and Nook Color and Kindle Fire are pinpointing it for everyone to see.

It’s all very simple.

If Tablets really are a revolution – then $200 Tablets that can reach a billion people are the ones that will carry the load.

Kindle Fire and Nook Color 2 actually beat the iPad in some core functions

Nook Color has a better quality screen than the iPad (iPad, not iPad 2 as don’t own one and don’t know what revolutionary and magical technologies it has in its screen). It’s heresy to mention such things but the $249 Nook Color has an IPS LCD screen with 169 dpi. It’s an absolutely amazing screen. Nook Color 2 will definitely be better than iPad 2 in at least some areas (SD card slot, for example).

Kindle Fire has the Silk Browser which will presumably (hopefully?) be lightning fast. Amazon may even do the unthinkable and make an OS that’s faster and easier to use than iPad 2.

We aren’t just talking about things that ‘are needed for the aesthetic purity of the device’ i.e. no USB slots and no SD card slots. We are talking about core things – Surfing the Net, Screen Quality. We are getting into dangerous territory here. Apple people might have to start explaining how Safari is still a better browser because the slower speed lets you better appreciate the smoothness of touch of the screen. What is life if not an opportunity to take things slow and appreciate the finer things in life. Buy an iPad – get time to stand and stare.

What happens when the $200 Kindle Fire Tablet is easier to hold, better for browsing, and much better value for money than the $500 Tablet?

We don’t know. However, it would be safe to assume that a considerable number of people would buy it. In fact, all signs indicate that tons of people already are.

Of course, analysts and Apple people will say that not a single person out of the 5 million or so people who are likely to buy a Kindle Fire in 2011 would have bought an iPad.

A $200 Tablet couldn’t possibly affect a $500 Tablet. Who would sacrifice white headphones for a measly $300?

What happens if the $250 Nook Color 2 (perhaps even $200) has better features than the $500 Tablet?

Again, we don’t know. However, it’s quite likely that Nook Color 2 will sell very well if it beats iPad 2 in some areas. Because then the price difference becomes a huge factor.

If Nook Color is selling well enough to help propel Android Tablets to 27.9% market share – then it would be safe to assume that an improved Nook Color 2 would sell even more and take away even more market share from the iPad.

Notice the trend – Kindle Fire funnels away some iPad sales, Nook Color 2 funnels away some more iPad sales, Android Tablets keep increasing market share.

It’s very, very interesting.

The Magical and Revolutionary Barrier is Gone

That’s the truth.

The magical and revolutionary and insanely great halo that was protecting iPad and keeping Android Tablets at 2.3% market share is gone. Forever.

B&N figured out that it couldn’t compete with iPad at $500 and it went with $250. Asus figured out that it couldn’t compete with iPad by copying the design and it went with the Transformer. Perhaps most importantly, Amazon realized it’s a market it must enter and one it must enter with a low-priced Tablet and it is releasing a $200 Kindle Fire Tablet.

You can’t compete with a $500 Status Symbol and Tablet using a $500 Tablet. But you can compete with it very effectively using a $250 Tablet. That’s B&N’s lesson and it’s the lesson that Apple’s competitors can use to beat it in any market. Seriously, each and every Apple product has that huge weakness - Unfortunately, its competitors keep playing up to its strengths instead of attacking its weaknesses.

It’s a relief that there are at least two companies that are attacking Achilles’ Heel instead of testing the strength of his Shield with their arrows.

It shouldn’t be so difficult – History is a great teacher.

Apple stole the Graphical User Interface idea from Xerox and figured out how to make a beautiful, expensive computer out of it. Microsoft stole the Graphical User Interface Idea from Xerox and figured out how to make PCs cheap and put a PC on every desk.

Microsoft tried and failed to make Tablet Computers. Apple succeeded in showing everyone there is a tablet market. But it is repeating its mistakes. Amazon and B&N and Asus and other companies are going to put a Tablet in every person’s hands – even if those hands can’t afford a $500 Tablet.

History is such a beautiful thing – if you learn the lessons it teaches you.

The Vatican of Consumerism is now directionless and defenceless and the armies of value for money and thrift are fast approaching. Apple’s cash hoard and its patent arsenal are going to come in very handy but they aren’t going to be enough. It’s the beginning of the end of consumerism and conspicuous consumption in tech devices. Even if we don’t know it yet.

23 Responses

  1. A typical wordy exercise, based on flawed data. There’s a huge difference between sales and shipments. We’ve seen Android sellers stuff the channel in the past. The evidence so far doesn’t support Android tablet use rising much. (And I say this as a new Nook Color owner).

    • Well, in a few years we’ll know. Whether Steve Jobs is destined to repeat his mistakes of the past and set up a path and market that another company takes over.

      Or whether the remaining parts of Apple can save a repeat of what Windows did to Mac.

      • Uhh, you do know that Steve Jobs passed away this month, right?

      • Yes, the 5 million articles were a clue. I think you’re taking the mention literally. I’m referring to the culture and way of thought – Apple is still going to keep working according to the plans and principles and marketing strategy he dreamt up. So it’s a figurative reference to the Steve Jobs culture/strategy.

  2. Well, I have an iPad 2 and like it very much, especially versus the iPod Touch it replaced. I tried to talk my wife into an iPhone 4, but she balked at the screen size and appreciated what I was able to do on my iPad. In the end we ordered a Kindle Fire, because she couldn’t stomach the $499 price for the iPad versus the $199 for the Fire. No snobbery, no superiority, no Apple-bashing, just economics and a desire for a large screen, plus the love of her basic flip-phone.

    I think the Fire will do well, as will the Nook Color 2. I especially think the chances for the Fire are good considering the dismal state of the Android app market and what Amazon’s Android app store can bring to bear vis a vis filtering and quality control. The Fire is the Nook Color without the need to jailbreak for tablet functionality. This will appeal to people who aren’t geeks and want simplicity. Like my 59 year-old wife.

    Cheers!

  3. I own an Android based phone and an iPad 2.

    The app content is really going to be the driving force. The number of apps that particularly interest me is so much larger on iOS. I really wanted to get more into Android but until there are developers making more for the OS it just isn’t compelling.

    The genre though that sold me on the iPad more than anything else was the conversion of board games over to iOS. The larger screen being able to simulate some of my favorite board games and the computer able to automate all the rules… Absolutely divine.

    • I remain mystified with the app phenomenon. What are those miniature applications that are so appealing on iOS? I like the iPad but most apps can either be done by a website or do not need to be done at all.

      • Are you a board gamer at all? An app as simple as the free Chess.com one allows me to play chess with a screen nicely sized for my iPad using my normal chess.com login info. It works way faster and smoother than on the iPad than logging into the actual website via Safari on the device.

        Then there are the countless other board games that are designed with the touch interface in mind and work well enough to be almost as good as playing face to face.

        I know many folks love it for video games and I can understand. But from a board gamer perspective it is a fantastic device… Just one I will never simply read on. I much prefer e-ink for reading.

      • I have played chess on it. And the experience is definiely very good.

        that’s interesting – just as a replacement for board games it could sell a 100 million units a year.

  4. In a world where technology is evolving quickly, the $199 price of the Kindle Fire is a much more feasible investment for the average person who wants to stay current with technology but doesn’t need to . If it is broken, stolen, or starting to become outdated/slow it is easier to upgrade.

    Apples first iPad came out in April of 2010 with the second generation in March of 2011, I can’t justify a $499 every year or two to stay current. If it breaks then I would be out of luck for a while.

    • iPad 3 scheduled for release in 2012…Apple does seem to think “we” want to upgrade hardware every 12-18 months or so.

      This strategy has served them well, but for how long?

      • Now that Steve Jobs is gone – it won’t work for long. Except for people who are hard-core Apple devotees.

        He was the only one capable of making a good or very good feature seem like it’s a revolution. If he had given the latest iPhone talk he would have made Siri seem like bigger than the Steam Engine.

  5. ” It’s the beginning of the end of consumerism and conspicuous consumption in tech devices. Even if we don’t know it yet.”

    A post on this Switch 11 would be very interesting.

    • Sure. It’s way out of my depth but I’ll give it a shot.

    • I second that – would like to see Switch11 expand on that statement as well. I was just thinking the other day…at some point I wonder if we, as humans, will ever have it within us to “de-tech” (i.e. turn the devices off/get rid of them) or have we reached the point of no return which will lead us to eventually implant the technology in the palm of our hand?

  6. i read an interview the other day where apple (jobs or cook) stated that they have no interest in selling to the whole market at every price point. they will continue to offer more value at their chosen price points. so if android tablets sell well its not because they have beaten the ipad, its just that they are not targeting the same demographic.

    • Yes, of course.

      Apple never loses. No matter what will happen they will spin it to seem like they won.

      • And no matter what happens, you will consider them to have lost and their statements mere spin.

        In Western society, we keep score by using money — and by that metric, Apple has already won the mobile phone war (this single company pulls in well over half the profits in the entire industry — even if they aren’t selling as many devices). It has *certainly* won the tablet battles so far. And it’s growing a *lot* in the mobile PC space.

      • Jasper, Apple is at its zenith right now. But the whole structure was kept together by Steve Jobs.
        Now we’ll find out how much of it really is ‘amazingly good products that talk back to customers’ and how much of it is ‘amazingly good marketing that makes a slightly better mp3 player seem like a revolution’.

        See – it’s hard to tell whether Apple are experts at making people feel their products are insanely great or whether the products are insanely great. If what the products are really doing is filling some need for validation or filling the need as a status symbol, then anyone using it for either or both of those needs would be especially unlikely to ever admit it. However, if the main magician is gone. The person capable of linking validation to the device – then it loses that ability and it’s gone.

        That’s the biggest tragedy – that Steve Jobs couldn’t reach the point where Apple people drove iCars and lived in iHomes and thought iThoughts. It really is. It would make for such an aesthetically perfect society.

        If in 10 years Apple is again left behind – then it was all Steve Jobs’ marketing magic. If in 10 years Apple is still a force, then perhaps Apple products really are so much better than the competition.

        My opinion is that we will have a generation of some 50 million or so youngsters who are trained to get validation from Apple products and similar products – in addition to the people who love Apple for various other reasons. However, that’s all. We’re saved from living in a world where 50% of the young people think they need an iDevice to validate their existence and that they need to update it every 12 to 18 months to continue to have a meaningful existence.

  7. Just wanted to put in two cent’s worth for those of us who are thrilled by the prospect of the Kindle Touch. (Surely I can’t be the only one?)

    I’ve always considered the Kindle keyboard to be an irritating waste of space, necessary only for a few functions (e.g., changing font size, creating folders), and taking up room that could be better configured as a larger screen, or simply removed for a smaller Kindle. The only reason I’m plunking down the cash for a new Kindle is the joyful thought of getting rid of that stupid keyboard, and switching to a (hopefully) somewhat faster and (almost certainly) more efficient touch screen.

    Apart from the low price, the point of the Kindle Fire escapes me. I love my iPad, but never use it for reading e-books; I suspect few if any serious readers do. Kindle Fire seems way too small to be comfortable for watching movies, gaming, surfing the web, etc. In trying to be all things to all people, it seems to me to succeed at none of them. On the other hand, Amazon certainly knows its own customer demographics far better than I do!

    • I think you’ve pretty much said most of what I wanted to say. Additionally, the K3′s keyboard is not only a waste of space that could be better used by not being there, it’s also *really* bad at its job. If I were typing this on the Kindle, I’d be using *maybe* some caps, but even that rarely, because the k3 is really awkward to hold in your hands while hitting shift plus a letter. Never mind punctuation. I can do it, but it’s really extremely annoying.

      The Kindle Touch — always assuming the Touch part actually works well and the programming works as well — will provide a *much* better keyboard than the Kindle Keyboard does.

      If you want to take notes, share your thoughts on a book to twitter, etc.etc., then you want a Kindle Touch, not a Kindle keyboard. Well, unless you like looking like a teenager texting or spending minutes hunched over the 4 way to get to the frisking semicolon and opening and closing bracket (never minder if you want punctuation *inside* your brackets, like this).

      The one reservation I have with KT is the lack of physical page turn buttons. Those are the only buttons that have an actual use on a dedicated ereader, and getting rid of them is a bad frisking mistake. Once we see a teardown, we’ll presumably see that the Touch mechanisms are placed/sized such that there isn;’t room for page turn buttons — but that is still a crying shame.

      • I agree – i wondered why they took the turn buttons off but for those who actually want to read and not play or write online, the keyboard is a waste of space. I will not purchase the kindle Fire. I want to READ not play online and I don’t want a back-light. Strainless reading..that’s what I want..and a nice page size. The kindle touch will give it to me. Tomorrow is my birthday, I will pre-order the touch3G. Oh and nothing has to fight against the ipad for my business because I refuse to buy an Ipad. I live in the boonies, no high speed internet and I refuse to pay the ridiculous high prices for internet via mobile broadband.

  8. Great analysis! I am one of the million people who can’t afford the price of iPad. But I will for the first time order the Kindle Fire and sign up to Amazon Prime service where I wouldn’t have.

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