Amazon Prime – Amazon’s Push for Amazon Prime might include Kindle Fire 2 subsidies

While looking for updated news regarding the new Kindles, I came across something very curious. It dawned on me that of the last 6 press releases from Amazon, 4 of them have a distinctive common thread – Amazon Prime.

Seven Days ago – 8/21  Amazon announced an expanded licensing agreement with ESPN which added  popular titles from the 30 for 30 film series available for Prime members.

Four days ago  — 8/24  Amazon announced an expanded agreement with NBC Universal, adding hundreds of  TV episodes to Prime Instant Video for Prime members.

Yesterday  8/27 — Amazon announced that its catalog of over 180,000 exclusive Kindle books have been purchased, downloaded, or borrowed from the Kindle Owners’ Lending Library more than 100 million times. Nearly all of these exclusive books are available for Kindle owners with a Prime membership to borrow for free, as frequently as once a month, with no due dates.

Today  8/28 — Amazon announced that it now ships more items with Prime Free Two-Day Shipping than with Free Super Saver Shipping – the program Amazon launched in 2002 that offers free shipping on orders over $25. Currently, Amazon Prime offers 2 day shipping on over 15 million items from it’s online store.

In a nutshell, with a $79 annual Amazon Prime Membership you get:

  1. Free Two-Day Shipping on over 15 million items.
  2. No minimum order size.
  3. Unlimited instant streaming of more than 22,000 movies and TV episodes with Prime Instant Videos.
  4. A Kindle book to borrow for free each month from the Kindle Owners’ Lending Library of over 180,000 exclusive Kindle books.

Why the Push for Amazon Prime?

My best guess is that all this hype and hoopla about Amazon Prime means that the giant online retailer has something spectacular to show us during the Press Conference in Santa Monica on September 6th. The press conference is being held very close to Hollywood and the entertainment industry. My initial thoughts on this a few days ago was that Amazon would be promoting a new content provider, like a major network or studio. As it turned out, Amazon did expand their agreement with NBC Universal just 4 days ago. On August 21st, Amazon revealed an expanded licensing agreement that added popular titles from the ESPN 30 for 30 film series to Prime Instant Video.

Amazon now has agreements for the following networks and studios:

  • Warner Bros. Domestic Television Distribution
  • NBC Universal Domestic Television
  • CBS Corp
  • Discovery
  • Fox
  • PBS
  • Sony
  • Disney-ABC Television Group
  • Paramount
  • Metro Goldwyn Mayer (MGM)
  • Viacom which brought along MTV, Comedy Central, Nickelodeon, TV Land, Spike, VH1, BET, CMT and Logo
  • ESPN 30 for 30 film series

That’s nice and all but it’s not *spectacular*.

Purely Based On Rumor

What would be spectacular… the offering of a new Kindle Fire 2 — free and free movies with an Amazon Prime membership.

As awesome as this sounds, I’m not sure of the profitability of this for Amazon. The general consensus of everyone with an opinion in this matter, has been that the cost of a new Kindle Fire 2 will be $199 and the original Kindle Fire will drop in price. Amazon needs to keep the price of this new Kindle low to be able to level the playing field with other tablets such as Google’s Nexus 7 which sells their 8 GB device for $199 and $249 for the 16 GB device.

Purely Based On My Wild Imagination

Maybe these new Kindle 2’s will need data plans. That could explain the push for Prime. Downloading books and apps wouldn’t add much to a data plan, but I imagine streaming instant videos could break the bank if used heavily. Of course this data plan would come in handy with the introduction of another rumored device that may be unveiled at the press conference – the Amazon smart phone.

So they’re pushing the pure awesomeness of being an Amazon Prime Member – possibly giving away a new Kindle 2 with every Prime Membership – and then maybe nailing us to the wall with data plans while saying: ‘Hey, you got the Kindle 2 for free and we convinced (conned) you that you needed a data plan so as to enjoy all the great extras we have to offer – so why don’t you add an Amazon Smartphone to the mix?’

Now I can see profitability. Actually, I see the money meters spinning so fast they are nearly at a standstill.

But don’t forget – this is conjecture. And it’s my conjecture at that.

Wait! I’m not quite done here yet!

All my guesses, speculation and ramblings aside – there may be a very simple reason for the Prime push. It just may be that Amazon wants good customers. Prime Members are good customers. And loyal. Loyal customers will spend their money at Amazon. They will loyally and proudly purchase books, DVD’s, toys for the kiddies, electronics for the teens, groceries, clothing – yada yada yada, including the proverbial kitchen sink.

On the other hand, there exist the fair-weather customers. They’ll purchase the Kindle Fire on sale and well-pleased with their discount will run to the nearest Android rooting exit. Because they are not loyal, they will go elsewhere for all their online shopping needs.

Amazon doesn’t make a profit from fair weather customers but they do from first rate loyal customers. It just may be that the push for Prime benefits both Amazon and the loyal customers. They make a profit and we get a lot of bang for our buck with Amazon Prime. Hey, we gotta shop somewhere, don’t we? Why drive all over the web when you can shop at the biggest online retailer? Think of the gas you’ll save. ;)

I would love to hear what you think the push for Amazon Prime is about. Does it mean a free Kindle Fire 2 with a 3 year Prime membership? Data Plans? Bundled with Amazon Smartphone? What do you think Amazon is hoping to do?

Leave your comments – and please don’t flame the author (me) for my wild imagination. Thanks! :)

Kindle Fire 2 Wishlist

Amazon may or may not release the Kindle Fire 2 at its September 6th event in Santa Monica. It also may or may not release a 10″ model. But, we have already come up with our features wish list for the new Kindle Fire 2.

Kindle Fire page is where you’ll be able to find Kindle Fire 2 after September 6th.

Note to Amazon: We always want additional features at the same price or even less.

After the initial stunning success of the Kindle Fire, Amazon will definitely want a more sustained success with the Kindle Fire 2. There is now stiff competition from Google Nexus 7 and there will be further stiff competition from iPad Mini (which might get announced on September 12th) and B&N Nook Tablet 2, and Microsoft Surface.

What can Amazon do to beat the competition (or at least compete well)? Will Amazon be able to repeat the Kindle Fire success story but this time with sustained great sales?

Everyone is curious about the features/capabilities of Amazon’s Kindle Fire 2. Here’s our wishlist.

  1. Kindle Fire 2 at or below $199. We want new features but a lower price or a price that stays at $199. 
  2. Kindle Fire 2 10″ Model. It’s about time there was a large screen, low price iPad competitor.
  3. Kindle Fire 2 10″ Model for Under $319. Price is one very effective way to take on the iPad. It’s been 2+ years since the iPad. Why can 10″ Tablets not come in at $250 to $299?
  4. Latest Android OS (4.1 Jelly Bean) – Though this is highly unlikely, if the new Amazon Kindle Fire 2 is released with the latest Android OS, users will have the best experience.
  5. ePub Support – Will Amazon include ePub? If this format is supported, Kindle Fire 2 users might be able to read books from B&N, Kobo bookstore, and from libraries.
  6. Volume control button, Power button at the top – These two are small glitches with the current Kindle Fire and hopefully Amazon will include a volume control button and remove the power button from bottom and put it on the top. Many users seem to want these two hardware enhancements.
  7. Folders/eBook organization options – There is an easier way out for this persistent issue. Just buy Calibre (from whoever owns the app) and integrate it with the Kindle Fire 2 before shipping it out. It might be a bit late to do it now but Amazon can add it as an update.
  8. 3G/4G Connectivity – Providing a 3G connectivity is one sure way of beating the Google Nexus 7. People don’t have access to Wi-Fi at all the places and hence 3G connectivity would be a big deal. Especially to frequent travelers. Amazon can drop the free Whispernet service on the Kindle Fire 2 (if 3G is offered) as consuming media might require a lot of bandwidth. A 4G connection would be even better than having 3G – but not if it raises prices too much.
  9. Expandable memory (MicroSD Card slot) – We know that Amazon wants to promote their cloud services. But offering expandable memory is another sure-shot way of beating the Google Nexus 7. If these last 4-5 points are ignored by Amazon, it’s going to be very difficult to prevent people from buying Google Nexus 7 instead of Kindle Fire 2.
  10. International availability – Whether Amazon likes it or not, the Google Nexus 7 and iPad Mini are going to be available internationally, and so will their digital content. Even B&N has tied up with Microsoft and must be looking to expand Nook Tablet around the globe (so far it has only announced UK availability of its eInk eReader in October). It’s going to be easier (and profitable) for Amazon to scale up the volume and reduce prices. Make your products, content and apps available globally Amazon. It’s high time!
  11. Built-in memory - I guess we can expect 1 GB RAM. But we also want 64 GB storage space. Whichever tablet is going to offer this first, will have a huge competitive advantage. Why can’t the Kindle Fire 2 offer this in a higher end model?
  12. Front Camera + Mic – We need this for video chatting. Please don’t give a VGA Camera (wonder why people still make this?) like the iPad. We are looking at an 1 to 2 Mega Pixel camera in the front.
  13. Stylus (unlikely) – I am very impressed with the Samsung Galaxy Note 10.1 introduction video. It redefines note taking and annotations.
  14. Text to Speech & X-Ray - High time these awesome features are brought to the Kindle Fire.
  15. Higher resolution/Larger Screen Options – The rumor is that we will get multiple Kindle tablet models with variation in screen sizes, resolutions, with/without 3G, etc. We hope this is true. A 10″ screen would be great. An 8.65″ screen will be cool too. No, it’s not copied from the supposed screen size of the iPad Mini (You can put away your lawyers). That was 7.65″.
  16. HDMI Out + Cable – If there is a wide-screen TV around, we might as well see movies on it. The HDMI Out port will make Kindle Fire 2 complete (for viewing movies).
  17. Bluetooth – We want to be able to pair the tablet to external (bluetooth supported) devices like keyboards, speakers, cell phones, etc.
  18. Foldable stand – The Microsoft Surface has already shown us this one. Not everyone wants to watch a movie by holding a tablet in their hands!
  19. Foldable screen – You know why tablets are annoying? In spite of multiple vendors claiming that they can be kept in the trouser pocket and carried around, it just cannot be done without looking awkward. If the tablet can be folded, perhaps then it might be possible. Think about it – Mobility is very important for tablets. If a SIM card can be inserted into this device, it can become a 2-in-1 device – mobile plus tablet. This is a free idea. That means, any manufacturer is free to implement the idea and make millions out of it.
  20. Firefox/Opera browser – Why invent the wheel once again? Why make a silk browser when there are other freely available browsers that are clearly better and have more options? Plus your poor tired servers don’t have to check on what websites each Kindle Fire owner is browsing.

Will Amazon stun us by giving away the Kindle Fire 2 for free? It might happen. It would involve some kind of mandatory digital subscription (Prime) – However, it’s difficult envisioning how Amazon would pull this off. Especially when the basic Kindle models are still not free. Perhaps the Kindle Fire 5 might be released for free!

What features would you like to see in the new Amazon Kindle Fire 2?

Kindle Fire 2 Rumors, Kindle Fire 2 Release Date Rumors

Kindle Fire 2 Rumors have suddenly intensified – DigiTimes has leaked news of a manufacturing order for Kindle Fire 2 (link and details below). It even claims a Kindle Fire 2 release date of July 31st.

It certainly seems that Kindle Fire is about to see the arrival of its successor. There is no information about how many Kindle Fire 2 units have been ordered and no details on Kindle Fire 2 specifications.

Kindle Fire 2 – Pricing of $149 or $199?

There are mainly two schools of thought here:

  1. Cheaper Kindle Fire 2 fuelled by advertising revenue. Probability: Very High. We already know that Amazon either makes very little or takes a slight hit on each Kindle Fire sold. The strategy is to make money through content sales and through other purchases at Amazon. There are now rumors that Amazon is looking to extend the ‘Kindle with Special Offers’ model to Kindle Fire. Amazon has already tried advertising on the Kindle and found considerable success (it seems that way) using the ‘Kindle with Special Offers’ model. It makes sense for Amazon to try to extend that same model to Kindle Fire – rumors of a $149 Kindle Fire subsidized by ‘special offers’ can’t be dismissed lightly. The million dollar question is – How many people would be willing to have ads on their front screens in return for a $50 discount?
  2. $199 Kindle Fire 2 that offers increased value via improved hardware, improved software and new features. Probability: High. Amazon might follow a pricing strategy similar to the one employed by Apple for the iPad, i.e. stick to the Kindle Fire’s $199 price for Kindle Fire 2 but improve value for money by adding in features and making hardware/software improvements. It would then position the Kindle Fire 1 at $149 and try to get even more of the market.

Our thinking is that Amazon will go with -

  1. New $199 Kindle Fire 2.
  2. $149 Kindle Fire 1.
  3. $169 Kindle Fire 2 with Special Offers.
  4. $129 Kindle Fire 1 with Special Offers.

Credit: DigiTimes for covering Kindle Fire 2 rumors and CNet for their source claiming Kindle Fire 2 is around the corner.

DigiTimes says:

 the sources expect Amazon to release a new 7-inch tablet PC with a screen resolution of 1280 by 800 and a price of US$199, in the third quarter, targeting the higher-end segment, while releasing another 7-inch model with similar specifications as the existing Kindle Fire, featuring a screen resolution of 1024 by 600 and a price of US$149.

DigiTimes also claims that Kindle Fire sold 4.5 to 5 million units in Q4, 2011 and then fell flat and sold only 700,000 to 800,000 units in Q1, 2012. Not the most easy-to-believe claim but it’s crazy enough to be true.

Kindle Fire 2 – Multiple Models

There are strong rumors that Amazon will release multiple versions of Kindle Fire 2. That it will target the low, mid and higher mid ends of the tablet market. Currently the main distinguishing features being discussed are screen size and resolution -

  1. $149 Kindle Fire 2 Economy Model. 7″ screen with 1024 x 600 pixels screen resolution. These are the exact same specifications as for the current Kindle Fire. Amazon could either keep selling Kindle Fire 1 at $149 and use that to corner the lower end of the tablet market, or it could release a brand new low-priced Kindle Fire 2 Economy Model.
  2. $199 Kindle Fire 2. 7″ screen with 1280 x 800 pixels screen resolution. This would be an improved version of the current Kindle Fire. Improvements might include an improved processor, greater internal memory, Bluetooth, a new version of the silk browser, more and better in-built apps, addition of a camera to the device, and more. With the feature-rich Google Nexus 7 Tablet at $199, Amazon will have to make a lot of improvements to stay competitive. It will also have to do this without increasing the price of the Kindle Fire 2 above $199.
  3. $299 Kindle Fire 2 Large Screen. 10.1″ screen with 1920 x 1200 pixels screen resolution. This tablet would only be competitive if it undercut the iPad significantly on price while maintaining a good feature set. Thus it would have to include an improved processor, greater internal memory, more and better in-built apps, and lots of improvements. Amazon would also have to build up its App store significantly (Apple has over 225,000 apps, Amazon only has 31,000). Improvements like the keyboard cover from Microsoft, a memory card slot, improved Wi-Fi, etc. would also be helpful.

This approach ($149 low-end Tablet, $199 Kindle Fire 2 for the mid end, $299 Kindle Fire XL) might work very well.

DigiTimes again has the most interesting Kindle Fire rumors and claims that Amazon is focusing on a 10.1″ Kindle Fire for end of 2012 or early 2013 -

Amazon is also said planning 8.9-inch and 10.1-inch models; however, the latest information shows that the company has already halted the development of the 8.9-inch model with the 10.1-inch set to be released in the fourth quarter of 2012 or the first quarter of 2013.

It makes sense for Amazon to focus on one screen size out of 8.9″ and 10.1″ and not spread itself too thin. DigiTimes is probably correct.

Kindle Fire 2 – Our Features Wish List

Kindle Fire 2 rumors only mention an in-built Camera and physical volume control buttons (thank God!). There are no other details available. Here’s our wish list for Kindle Fire 2 features wish list:

  1. Screen Size: Kindle Fire’s 7 inch screen actually adds to its ease of use. The 7″ screen makes it a device that can be operated one-handed. For me, increasing screen size alone will not be an improvement. So Amazon really should keep one or more 7″ Kindle Fires.
  2. Screen Resolution: Amazon needs to improve its resolution to at least 1280 x 800 to make it competitive against the Google Nexus 7 Tablet. Improved screen resolution will also be important to provide a better experience with surfing the web, watching movies, and looking at photos.
  3. OS: The current, heavily skinned version of Android will need an update. Maybe one built on the latest Android Jelly Bean OS.
  4. Browser: The Silk browser is hampered by the “Cloud Acceleration” feature. Instead of improving its performance Cloud Deceleration slow down browsing speed as much as 25%. A fix for this would be welcome.
  5. Connectivity and Storage: A MicroSD card slot would be a very welcome addition.
  6. Configurability: A choice of Tablets (2 or 3 different options) with variations in screen size, resolution, and internal memory would be a good idea.
  7. Memory: Having a choice of internal memory would be nice (perhaps keeping the starting point at the current 8GB). A MicroSD card slot would give Kindle Fire 2 a big advantage over the Google Tablet.
  8. Apps Ecosystem: Amazon needs to seriously improve its app marketplace if it is to compete with the likes of Apple and Microsoft and Google. This is especially important as the Android app market for tablets is quite limited and this is an area where Kindle Fire 2 could build up a big advantage over other Android Tablets.
  9. Amazon Prime: 2 of the 3 benefits of Amazon Prime, the free book loan each month and the free video streaming, are seriously hampered by the very limited library. The remaining advantage, free 2-day shipping, is a very big one. Increasing the online library of e-books and videos would go a long way in increase uptake for this service. The other way to go would be to do very attractive special offers on other content for Amazon Prime customers.
  10. Amazon Cloud: Increased storage space for music (currently 5GB) would be a welcome addition.
  11. Camera: I personally don’t see the point of having a cameras in a tablet. Perhaps there’s enough demand.
  12. Bluetooth: This is one of those technologies that seems to have been very fashionable at one point of time but didn’t quite take off the way it was supposed to. That being said, most devices (smartphones, laptops etc.) have Bluetooth and adding it to the Kindle Fire 2 would be a plus.
  13. Keyboard: Is this feature worth the weight and cost it adds? Probably not for a 7″ Tablet.
  14. Pen: Again, a good to have feature but I wouldn’t pay much more to have one.
  15. Cover and Stand: Always a good to have, especially for higher end tablets with larger screens where you might want to stream videos and watch them without holding the device the whole time. For a 7″ Tablet – not a big deal unless you can do a Surface RT type built-in kick-stand.

It’s going to be interesting to see what the Kindle Fire 2 brings to the table and when it arrives. Microsoft raised the bar but failed to reveal a launch date or price. Google’s Tablet has a firm release date and a super-impressive price of $209 (especially for the feature set). Now it’s up to Amazon to deliver a Kindle Fire 2 that keeps Kindle Fire competitive in the all-new Tablet Wars.

Kindle Fire 2 in 1st half 2012, Kindle Fire might sell 4-5 million units in 2011

Kindle Fire seems to be doing so well that Amazon has kicked off production of Kindle Fire 2.

DigiTimes claims that Foxconn (maker of iPhones and iPads and Kindles; torturer of its own workers) has landed orders for assembling Kindle Fire 2. Kindle Fire 2 release date will supposedly be in the first half of 2012.

Foxconn Electronics (Hon Hai Precision Industry) reportedly has secured orders from Amazon for assembling second-generation Kindle Fire tablet PCs, with shipments to begin in the first half of 2012, according to Taiwan-based makers. In response, Foxconn declined to comment.

The sources pointed out that the first-generation Kindle Fire is handled by Quanta Computer, but Foxconn has already successfully gained orders for the second-generation model.

Kindle Fire was produced/assembled by Quanta Computer.

Kindle Fire must be selling well for Amazon to already sign a deal for Kindle Fire 2. It must be selling particularly well for Amazon to target the first half of 2012 for the Kindle Fire 2 release.

How well is Kindle Fire selling?

Kindle Fire might sell 4 to 5 million units in 2011

DigiTimes thinks 4 million Kindle Fires will be sold by end 2011 -

Sources said sales of Kindle Fire may reach four million units by the end of 2011, which may contribute to shipment growth of its suppliers.

Meanwhile, market observers expect Amazon to drop the 7-inch Kindle Fire’s price from the current US$199 after the release of the 10-inch version in 2012.

Given that ‘leaked’ inventory records show sales of 50,000 Kindle Fires a day, it’s not a stretch to say that 2 million Kindle Fires might sell in 2011.

4 million still seems a high estimate. However, Analysts mostly agree.

A Rodman & Renshaw analyst lifted his estimate from 4 million Kindle Fire sales in 2011 to 5 million Kindle Fire sales. He points out that the monthly run rate (based on ‘leaked’ inventory records) is over a million Kindle Fire sales a month. He also points out that Amazon is constrained by display availability.

Forrester has also predicted Kindle Fire sales of 5 million in 2011.

Barclays analyst Antony DiCelemto threatens to destroy analysts’ years of built-up undependability by predicting a very realistic 2 million Kindle Fire sales in 2011. He also predicts 6.4 million Kindle Fire sales in 2012, and a further 1.5 million sales of Kindle Fire 10″.

Why no love for Asus Transformer and Nook Color?

It’s quite remarkable that in all the iPad and Kindle Fire hysteria everyone is forgetting two Tablets that have been quite successful i.e. Nook Color and Asus Transformer.

Transformer is supposedly selling half a million units a month. Nook Color has sold millions of units. Why don’t they qualify as successes?

For that matter, why is everyone ignoring a potential Nook Color 2?

There seem to be two fallacies that the Press and Analysts are wedded to -

  1. The $199 Tablets couldn’t possibly affect sales of the iPad.
  2. The $199 Tablet market is automatically handed over to Kindle Fire.

In this stark black and white world there are no shades of grey (obviously, since no eReaders are allowed to exist). The Tablet market is magically carved into two sections – High End and Low End. Apple is then handed over the High End market which not only is permanently exclusive to Apple but also immune to whatever happens in the low-end Tablet market. The Low End Tablet market is handed over to Amazon even before anyone has seen what Kindle Fire is like.

All the Kindle Fire sales estimates (both ones for 5 million Kindle Fire sales in 2011 and ones for 10 million+ Kindle Fire sales in 2012) assume that no other low-priced Tablets exist. They do, and they will play a role. Sales of either Kindle Fire or iPad are going to be affected – Probably both.


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