B&N has really shaken things up by adding Google Play to Nook HD and HD+. Have been reading comments on articles and forums. It’s interesting to see the number of people who -
- Now think Nook HD is the best pure Android Tablet. This includes some big tech bloggers like the one at Verge who ‘wanted to make sweet love to iPhone 5′ (Yes, he actually wrote that).
- Have now added Nook HD and HD+ to their list of ‘options to consider for their next tablet’.
- Have decided to add a HD or HD+ to their set of Tablets and/or devices.
A LOT of people suddenly are claiming that they will buy and/or consider buying a Nook HD.
Of course, all these data points come with a giant question mark. The people most likely to appreciate Google Play Store on a Nook HD, also happen to be the ones most likely to read tech blogs and comment on them.
It is, however, not out of the realm of possibility that B&N has expanded its market by 50% to 100% with one move. If there are a bunch of tech journalists (and we do use the word journalist lightly) now applauding Nook HD as the ‘Best Android Tablet’ then that will translate into sales sooner or later.
All of this presents quite a big problem for Amazon.
The Tablet Decision Earlier Versus the Tablet Decision Now
Before B&N added Play Store, the Tablet Buying Decision was (think Holiday Season 2012) -
- iPad or Something Else. 50% to 60% chose the iPad.
- If Something Else, then Google Nexus 7 or Kindle Fire or Samsung or Nook.
- If Google Play is a factor, then Nexus 7 or Samsung. Neither of which are super impressive (You have to factor out the ‘OMG it’s pure Google’ factor which makes a lot of people assume Nexus 7 is better than it is). That left two impressive and impressively cheap Tablets – Kindle Fire HD and Nook HD.
- Kindle Fire HD had a much better ecosystem than Nook HD. This meant it became the BEST Android based tablet for anyone who didn’t absolutely have to have Google Play Store. It became a strong #1 choice overall because NONE of the Android Based Tablets with Google Play Store were as good as Kindle Fire (Nexus 7 does not really compare with Kindle Fire HD).
- All of this meant that Kindle Fire HD was the ‘Best non-iPad Tablet’ for enough people. This led to great sales for Kindle Fire HD.
Now that B&N has added the Play Store to Nook HD and Nook HD+, the Tablet Buying Decision becomes -
- iPad or Something Else. 45% to 50% will choose iPad.
- If Something Else, then Nexus 7 or Nook or Kindle Fire or Samsung.
- If Google Play is a factor, then Nook HD is now the BEST Android Tablet with Google Play. If you detach any personal feelings you might have about the companies, it’s a very clear decision.
- If Google Play is not a factor, then Nook HD compares very favorably to Kindle Fire HD because it has fixed its ecosystem disadvantage. You get Nook Store, Google Play Store, and apps for Kindle and Kobo. Nook HD’s Ecosystem is now a major strength instead of a major weakness.
- This means that Nook HD is now ‘Best non-iPad Tablet’ often enough to lead to solid, solid sales. It also means that Kindle Fire is no longer the most frequent choice for ‘Best non-iPad Tablet’.
Think of it as – The automatic #2 choice in the Tablet Market is now Nook HD and not Kindle Fire HD. For the majority of people.
Will this really impact Kindle Fire HD and Amazon
Firstly, just a 45% to 60% share of the Tablet pie is available for Android Tablets. Rest goes to iPad.
Secondly, that non-iPad Tablet share of the pie is split between LOTS of Tablets. It’s also being eaten into by Windows 8 Tablets.
Thirdly, only the #1 and #2 Android Tablets (#2 and #3 overall Tablets) are going to do well enough to lead to future profits and developer mind share and a consistent stream of apps.
Kindle Fire was the best Android Tablet because of three main reasons – Solid device, Amazon brand and trust, Solid ecosystem.
Nook HD was losing to Kindle Fire because of – Weak Software, Weak Ecosystem, no ‘Nook Tablet’ brand or association.
By adding Google Play, it fixes two things – Firstly, it has a Very Strong Ecosystem now. Secondly, the Press love it and will create a ‘Nook is the best Android Tablet’ narrative.
Keep in mind that a lot of Android Tablet promotion is tied to the ‘open, do no evil, sharing is caring’ party line. Android people just LOVE the magical ‘openness’ of Android. B&N becoming ‘open’ means Nook HD is suddenly in line with the aspirations and dreams and identity of Android people.
It’s a pretty big deal. You can read the posts and see that people are so happy that B&N has ‘seen the light of openness’. It’s not just in the comments. Lots of the articles themselves have this rather interesting ‘finally, you have seen the light, my dear lost B&N’ quality about them.
People love someone who has ‘seen the light’ more than those who never strayed from the path of righteousness
Google Nexus 7 now becomes boring. Where’s the story and magic in a device that was always open?
On the other hand, Nook HD and HD+ present the press and Android people with the perfect opportunity – Look, it really does help to be open and good and do no evil. B&N Nook was closed and was dying. It then embraced openness and it prospered.
The Press are absolutely going to pump up Nook HD and HD+. Android people are 100% going to buy Nook devices.
Nook HD and HD+ succeeding now becomes part of the Android Dream.
What does that mean?
Android loving press and people will put their weight behind Nook HD and HD+.
Nook sales will increase at least 50% just from Android People and from gushing Press Coverage. Instead of talking about the ‘sluggish software’ (which is only an issue on closed tablets), the Press will talk about the Strong and Open Ecosystem.
Sales might even double. Plus the normal every day user will hear ‘Nook HD is Best Android Tablet’ so often, that sales to everyday users might increase too.
There wasn’t really a beautiful hardware Android Tablet. Nexus 7 was good but not beautiful. Now there is. And it’s OPEN.
B&N’s Nook HD and HD+ now have 710,000 Apps Versus Kindle Fire’s 50,000 to 60,000 Apps
Here’s the actual break up (assumptions) -
- Tablet optimized Apps – 10K from Nook Store and 20K from Play Store. That’s 30K for Nook HD. Kindle Fire HD – 15K out of the 50K apps are tablet optimized.
- ‘Work somewhat decently on Tablets’ Apps – 10K from Nook Store and 50K from Play Store. That’s 60K for Nook HD. Kindle Fire HD – 25K out of the 50K.
- Total Apps (whether or not they work) – 710,000 for Nook HD. 60,000 for Kindle Fire HD.
Guess which comparison the Press will fixate on?
Keep in mind that Nook HD is now the prodigal son who has returned home. The Press will magically forget to mention that only 30,000 out of those 710,000 Apps are actually optimized to work well on Android Tablets.
How long will it take Kindle Fire Store to get from 60,000 total Apps to 710,000 total Apps. Well, it might never happen. There might never be 710,000 apps in the Kindle Fire HD store. If Kindle Fire HD Store actually hits 710,000 total apps it might take 3 to 4 years. Android Store will have 2 million Apps by then. It’s really, really hard for Amazon to catch up.
Amazon has well and truly lost the ‘We have more Apps that will never work on your Tablet’ battle. The Press will never mention that it’s actually 15,000 Tablet optimized Apps on Kindle Fire HD Versus 30,000 Tablet Optimized Apps on Nook HD. It’ll always be 50,000 Versus 710,000.
Anyone who wants Play Store, or for whom Apps are a big deal – Nook HD wins almost every time over Kindle Fire HD.
Amazon’s Kindle Fire HD is in a LOT of trouble
Notice all the Kindle Fire HD 8.9″ sales? Notice the price drop of the Kindle Fire HD? Notice how Amazon is, for the first time ever, discounting Kindle devices within 3-4 months of launch?
Take a look – Amazing Shrinking Price of Kindle Fire HD 8.9″.
That suggests Kindle Fire HD and Kindle Fire HD 8.9″ sales were already under pressure from iPad Mini (and to an extent from Nexus 7).
Nook HD just went from ‘beautiful device with buggy software and tiny ecosystem’ to ‘beautiful device with massive ecosystem and buggy software’. It’s become very compelling.
There will now be three devices cutting into Kindle sales – iPad Mini, Nook HD, Nexus 7. It’s also worth nothing that Nook HD has WAY more retail distribution than any other Android Tablet. It’s also sold in WalMart and Target while Kindle Fire HD is not.
B&N has put its own ebook and movie revenues streams in danger. However, it has ensured good sales for Nook HD and HD+. At least until a markedly better Android Tablet comes along. It has also put Amazon’s Kindle Fire HD in a lot of trouble.
Will Amazon add Google Play Store to Kindle Fire?
Well, it doesn’t really have an option. It either adds Google Play Store to Kindle Fire or it loses a significant amount of market share.
- If Amazon doesn’t add Google Play Store then it’ll slowly and steadily lose market share. This might not seem like a big deal, at first. However, over time, this would mean less developers want to make apps for Kindle Fire (they would all flock to iPad and Windows and Android).
- We now have iPad which has the most and the best apps, Android which has the 2nd most apps (though not really very good ones), and Windows 8 which is adding apps at a ridiculously high pace (10K per month). After all of those, we have Kindle Fire which has a low number of apps and the quality isn’t as good as iPad. That means Kindle Fire becomes, in effect, the Tablet with the WORST choice of Apps. It doesn’t make up things in Quality either – because most of the apps are apps ported over from Android.
- Amazon will have to open up Kindle Fire HD to the Google Play Store. Sooner or later.
It can’t continue without Google Play Store unless it’s willing to lose market share. It could avoid Google Play Store while it had the best ecosystem out of the two non-iPad Tablets that were very good. But now B&N has that distinction.
Amazon will be very, very, very reluctant to give up its ecosystem and customers to Google. That means it’ll wait for one more Holiday Season. Which means it will suffer some market share losses. Depending on how aggressive Google is with Nexus 7 pricing, and depending on how aggressive B&N is with Nook HD pricing, Kindle Fire HD might lose a lot of market share.
What will Amazon do?
It’s hard to say. There are 4 major paths forward -
- Drop the prices of Kindle Fire HD and Kindle Fire HD 8.9″.
- Ignore lost customers and focus on customers loyal to Amazon.
- Add Google Play Store.
- Ramp up the rate at which Apps are added to its store.
The 2nd and 4th are very painful to do. That leaves just the 1st and 3rd.
Note: The 2nd would not be painful for Apple. For a company like Amazon that wants and needs large numbers of customers, it is very painful to lose potential ‘socks & sink buying’ customers.
My prediction: Amazon first tries a price drop and a ramp-up in the number of apps added. After 6-9 months it realizes the futility of it and adds Google Play Store. Which would mean that Google’s Android OS gets a really good shot at becoming the dominant Tablet OS and staying that way for a long time.