My predictions for Kindle Fire for 2013 -
The Bloody iPad Mini Wars in mid 2013
Apple is in a bit of a Profitability Pickle right now. It’s going to make very strong moves in 2013 and a Retina iPad Mini is possible. If not a Retina iPad Mini, a lower priced iPad Mini 1. The iPad Mini Wars will be a war of survival for the Kindle Fire. My prediction is that Kindle Fire will survive but be very badly damaged and that we’ll see huge Kindle Fire sales. We’ve already seen $50 off coupons on the already cheap $299 Kindle Fire HD 8.9″ and lots of discounts of $20 on Nook HD+.
In 2013, we will see a lot more Kindle Fire firesales.
Kindle Fire 3 Knocks it out of the Ballpark
In 2013, the new Kindle Fire, the Kindle Fire 3, will arrive and it will get a lot of things right. If you recall the eInk Kindle 3 – it really was beautiful. It hasn’t been bettered in my opinion. Seattle companies are good at V3 of their products. The next generation of Kindle Fire, the Kindle Fire 3, will be really, really good.
Amazon makes a huge grab for the Nook business
Reality is that Kindle Fire and Nook are weakening each other. There is a very strong niche for a Tablet meant for readers and movies and music. A Tablet for users in love with an easy shopping experience.
However, it isn’t big enough to support profits for lots of companies.
Google has played the great trick of convincing hardware vendors to make zero profits on devices that make Google money through search. That leaves Apple, Amazon, B&N, and a few select vendors smart enough to actually make money for themselves from Tablets.
Apple will probably remain first for 2 to 3 years (not longer because Apple’s need for profitability will drive it insane once the profits drop). That leaves the ‘Pepsi Spot’ for 2013 and 2014. Amazon is the natural heir but B&N is a HUGE thorn in Amazon’s side. It prevents Amazon from reaching economies of scale quickly enough to compete against the big Giant Tablets.
Amazon should, and will, make a grab for Nook Media as soon as Nook Media is a separate company.
Huge Shift to In-App Purchases in Kindle Fire App Store
Expect to see a lot of changes that encourage In-App revenues and developers who focus on In-App revenues -
- A Top Grossing List.
- Focus on In-App purchases in both free and paid apps.
- A huge increase in the amount of money apps make for Amazon and developers. Thus more focus on the App Store, and within the App Store, more focus on in-app purchases.
The interesting thing about in-app purchases is that the same person who won’t spend $1 to buy a game will get the free version and then spend $25 to buy stuff to ‘enhance’ the experience.
It’s a race to see who can sell users ‘services’ and ‘enhancements’ and ‘tricks’ the most effectively.
This might be a strange thing to put down as Kindle Fire prediction for 2013. However, it will affect Kindle Fire 3 and the Kindle Fire 3 ecosystem in a lot of ways. Software often dictates the evolution of hardware (and vica versa).
Books become relatively unimportant for Amazon (for revenue and profit purposes)
Kindle Fire is going to start selling more and more while Kindle Readers will sell less.
This will shift Amazon’s priorities for Kindles drastically.
People will be buying electronics and movies and music and apps and books from their Kindle Fires. Out of those, books will gradually see less and less usage because other things are EASIER to do on a Kindle Fire. The path of least resistance on a Tablet is not reading.
Amazon will start adjusting to this.
Why sell a user a $9 book that takes up 4 to 10 hours of the users’ time when you can sell the user -
- Stuff that is much more expensive.
- Stuff that is much more expensive when you consider money spent per hour of entertainment.
Unfortunately, Books will lose priority gradually.
Amazon doubles down on Screen and Sound
Kindle Fire HD is remarkable in that it did a really good job on Screen Quality and Sound Quality. To the point that it rivals iPad in one and beats iPad in the other.
Amazon is going to double down on both because it allows Kindle Fire HD to become an even better device to consume movies and music and books.
Kindle Fire is positioned against the iPad Again
Kindle Fire and Amazon got so much mileage out of the ‘Best Tablet at any price’ claim that it would be madness to not go up against iPad again.
A fundamental part of the Apple-loving tech press’ psyche is the need to show their perceived superiority. A challenge to that will never go unanswered – even if it means free publicity for Kindle Fire and the gradual erosion of the ‘Tablet = iPad’ association they themselves have built up.
‘Kindle Fire vs iPad’ will be a dominant theme in 2013 too.
A Kindle Fire with an IGZO Screen
Amazon has shown with the LTE capable Kindle Fire HD 8.9″ model that it isn’t afraid of going right after iPad.
It’ll continue that trend by bringing a Kindle Fire 3 IGZO to market. IGZO screens offer a huge advantage over existing LCD screens and will be enough of a jump to make Kindle Fire 3 IGZO the best Tablet for watching movies. iPad Mini 2 will probably not have IGZO because Apple will save it for iPad 5. Nook HD 2 (Nook 4 if we consider it’ll be the 4th Nook Tablet) might have it.
IGZO = Indium Gallium Zinc Oxide.
Huge Price Cuts with Kindle Fire 3 and Kindle Fire HD
Firstly, price cuts on the Kindle Fire HD and Kindle Fire HD 8.9″ will be necessitated by the iPad Mini Wars in mid 2013. $199 Kindle Fire HD 8.9″ is almost inevitable.
Secondly, Amazon doesn’t really have that many advantages. iPad has more apps, it has more ‘association’ with Tablets, it has better looks, it has better brand recognition. What Amazon does have is a large customer base and the ability to compete on price and on factors other companies have ignored or missed (like sound quality).
Kindle Fire 3 will have a very low price (for what you are getting).
Kindle Fire 3 will get two new family members - Kindle Phone and either a Kindle TV or a Kindle PC
Roger Knights pointed out a very important thing – Users who own a Phone/Tablet from a particular company/ecosystem are more likely to buy a Tablet/Phone from the same company/ecosystem.
We’ve also gone into reasons why it’s very likely that Amazon will release a Kindle Phone in 2013 in our post on Kindle Phone and Kindle TV.
Amazon will keep expanding the Kindle ecosystem and we’ll have partner devices that arrive alongside Kindle Fire 3. This will strengthen Kindle Fire 3 and also make it ‘stickier’. You get Kindle owners more and more immersed into the Kindle ecosystem if you ship more and more good, useful devices.
Bonus Prediction: A BIG change in the Tablet Market, which will affect Kindle Fire 3 drastically
There are two possibilities here:
- Windows 8 Tablets and Android Tablets become stronger and damage iPad. This fragments the market and means that most Amazon customers stick with Kindle Fire. This will be great news for Kindle Fire 3.
- Apple counters the New Tablets by aggressively pricing both iPad 5 and iPad Mini 2. This would strengthen the Apple iPad ecosystem and increase its lead. This would be very damaging for Kindle Fire 3.
It’s almost delicious, the predicament Apple is stuck in. It could fight for market share and lose profits in the near term. It could fight for profits and lose market share permanently. In either case, Apple’s decision will affect Kindle Fire 3 drastically.
If Apple chooses profits over market share, then, in the long term, Kindle Fire will benefit tremendously. It might even become a very strong #2 in the Tablet Market. If Apple chooses market share then Kindle Fire 3 might be the last Kindle Fire that sells well.