Kindle Fire, Kindle arriving at 16,000 retail locations including WalMart

Kindle Fire and Kindle will be arriving at a staggering 16,000 retail locations starting on November 15th.

Stores include – Best Buy, WalMart, Target, Staples, Sam’s Club, RadioShack, Office Depot.

It’s all very puzzling.

The Madness of the Retailers?

It’s absolutely inexplicable to me that stores like Best Buy and Target and WalMart would sell Kindles and accelerate their own demise. Do they not realize that Kindle Fire is a direct connection to Amazon.com? That Kindle and Special Offers will end up eroding the sales of the retail stores?

With B&N we can rationalize that perhaps all these retail stores can’t think that far ahead. However, with Amazon – it should be obvious what’s happening.

Here’s what BestBuy’s senior VP says -

“We are excited to work with Amazon to provide consumers the opportunity to touch, test, try to buy the Kindle Fire in all Best Buy and Best Buy Mobile stores nationwide,” said Wendy Fritz, senior vice president of Computing at Best Buy. “The Kindle Fire and other new products in the Kindle family will be some of the hottest gifts this holiday season and we are delighted to offer these devices as part of our ever-expanding tablet and e-reader selection at Best Buy.”

She might as well say -

We are getting tired of selling all these electronics. So we though we should let Amazon get a direct connection to our customers and shift them over to buying from Amazon.com.

The strangest store on the list is WalMart.

Isn’t WalMart supposed to be Amazon’s mortal enemy?

My understanding was that WalMart sees Amazon as a major threat and has started WalMart.com in part to address this threat.

Why then, is WalMart strengthening Amazon?

WalMart is literally selling its customers mini-Amazon stores. That its customers will carry everywhere with them. It’s incredibly shortsighted and hard to believe.

Target’s One-Stop-Shop Strategy

The irony -

“Target is offering the new family of Kindle devices, including the Kindle Fire, to ensure Target is a convenient one-stop-shop for all of the season’s must-have gifts,” said Nik Nayar, vice president merchandising, Target.

Target wants to ensure its the one-stop-shop. So, what does it do? It starts selling its customers mini-Amazon Stores that will, in future years, be the one-stop-shop for these customers.

How is all of this not painfully obvious?

Perhaps there’s something I’ve missed.

How does it help retail stores to build up Amazon? How does it help them to accelerate the trend to online and mobile shopping? Are they really not concerned that people will start doing their shopping through Kindle Fires and at Amazon.com?

It makes zero sense. To sell some extra devices this holiday season, all these retail stores are going to sell away their customers to their most dangerous competitor?

Kindle Fire as the catalyst, kindle book deals

First, for your Kindle, some kindle book deals courtesy the Discounted Books Thread -

The Marrying Kind by Sharon Ihle. Price: $1. Genre: Historical Romance. Rated 5 stars on 5 reviews. 517 kb in size.

Don’t Tell by Karen Rose. Price: $1.99. Genre: Romantic Suspense, Contemporary Fiction. Rated 4.5 stars on 69 reviews. 512 pages.

Extremely Loud and Incredibly Close: A Novel by Jonathan Safran Foer. Price: $3.19. Genre: Literary Fiction, A Tale of Loss and Recovery. Rated 4 stars on 446 reviews. 368 pages.

Chicago Lightning: The Collected Nathan Heller Short Stories by Max Allan Collins. Price: $2.99. Genre: Hard-Boiled, Mystery Series, Thriller. 398 pages.

Diagnosis Death by Richard Mabry MD. Price: $2.99. Genre: Medical Thriller, Contemporary Fiction, Faith. Rated 4.5 stars on 17 reviews. 288 pages.

From outside the Kindle Store -

  1. Lilith by Jack L. Chalker. You will need to find the book on that page and then use this code: 9991439. Found via MobileRead.
  2. [ePub] 2011 Big 12 College Football Preview by Phil Steele. Works only with reading apps that support ePub.
  3. [ePub] Revel with a Cause: Liberal Satire in Postwar America by Stephen E. Kercher. 572 pages. Free ePub format book at University of Chicago Press. Again, you need an ebook reading app that supports ePub.

Next, a few thoughts on the Kindle Fire.

Kindle Fire as the catalyst

Kindle Fire does a few very interesting things -

  1. It perhaps confirms the fact that there is a market for a low-priced Tablet. Nook Color had already proven this by shipping 700,000 units a month last holiday season. However, Tablet manufacturers didn’t learn the lesson and perhaps the supposed success of the Kindle Fire will convince them. Apparently, 95,000 orders for the Kindle Fire happened on release day. That seems around a third of what my estimate would be. In either case, we have proof that a low-priced Tablet sells.
  2. It puts pressure on ALL Tablet makers to lower prices and most are already responding. Best Buy has dropped the price on some Tablets.
  3. It gives a very good option to people who did not want to buy an iPad but still wanted movies and TV shows and music and web browsing and an app store that wasn’t a mess.
  4. It triggers a change in focus for Amazon. The article linked to above claims that Kindle Fire sold more units than the other three Kindles combined. My estimate would match that – Put together Kindle Touch, Kindle Keyboard, and Kindle 4 sales and they would be perhaps 50% to 70% of Kindle Fire sales. Why? Because the market for people who read just isn’t that big.
  5. It makes a lot of people aware that a device can be the new store. Companies seemed reluctant to recognize that Phones and Tablets are a brand new channel to customers. Now companies have to recognize it because both Apple and Amazon are making very strong moves and might very well run off with the Mobile Device as Store market.

The Kindle Fire is probably going to be a catalyst for two very important things that will help grow Tablets from ‘iPads etc.’ to ‘high-end Tablets and low-end Tablets’.

  1. A major drop in price for MOST non-iPad tablets. There’s no choice any more.
  2. The start of an actual race to make better Tablets. Not just a token ‘let’s try to clone the iPad’ movement but an actual race to really compete. Which might help Tablets grow sales by a lot.

We have the second company that is looking at Tablets without the iPad filter. The first, B&N, showed there was a market. The second, Amazon’s Kindle Fire, is going to help all the delusional Tablet manufacturers realize that you can’t beat the market leader by cloning both device and price – that differentiation and attacking weaknesses is the key.

Kindle Fire is going to ignite the Tablet market

The biggest barrier to the success of non-iPad tablets wasn’t the iPad. It was the fact that they were expecting people to pay the Apple premium for a device that was not from Apple and was just a cheap clone. The success of tablets like the Asus Transformer and Nook Color showed there was a market for companies that brought innovative and original Tablets. The $100 HP TouchPad frenzy put an exclamation mark on it.

The non-iPad Tablet market is a huge market. The market of people who don’t want to spend $500 on a closed device that they aren’t sure what they will do it is massive.

There are so many ways to attack – lower price (Kindle Fire), different focus (Asus Transformer), niche focus (Nook Color), openness. It’s a long list. Yet, all we saw were iPad clones. It’s not that there was only an iPad market (and no Tablet market) – There was no market for iPad clones.

Kindle Fire ignites the Tablet market because it forces people to ‘Think Different’. How did Amazon manage to release the Kindle Fire for $199? Why was Amazon the only one to come up with things like Amazon Silk?

B&N did a ton of things right with Nook Color. However, B&N is off the radar because it isn’t what you expect to be a Tablet success. With Amazon people can’t ignore it any longer. The $200 to $250 Tablet Market is very real. The non-iPad Tablet market is very real.

In a market where you can choose between a $500 iPad and a $500 iPad clone – it shouldn’t be a surprise that Apple wins most of the time.

In a market with a $500 iPad, a $200 Kindle Fire, a $249 Nook Color 2, and lots of $200 to $400 Tablets from various companies – Everything changes.

Kindle Fire is like that little Hesperonychus elizabethae (a small carnivorous dinosaur smaller than a housecat) that managed to stealthily jump on the back of a Tyrannosaurus Rex and bite out a chunk. Suddenly, every other dinosaur realized that attacking Mr. Rex head on and using the exact same strategy as him was utter stupidity.

That’s exactly what’s going to happen. All the other dinosaurs (Tablet manufacturers) are going to realize that they need to start fighting in ways that actually give them a chance.

Apple is scared

The acolytes of Apple all over the web are writing all sorts of pseudo-analytical drivel. Horace D. thinks Kindle Fire is not going to be able to do low end Tablet disruption.

Here’s an example of the type of language he’s using -

Disruption requires asymmetry but it also requires the ability to go up a trajectory of improvement along the basis of performance that a majority of users demand. The first condition is met, but what of the second? In a combined system where one asset is used to leverage another–the subsidized being sacrificed to benefit the profitable–success is conditional on one element being “good enough” while the other “needing improvement”. Investment follows accordingly.

Ability to go up a Trajectory of Improvement? The Subsidized being Sacrificed to benefit the Profitable? We’ve found our next head of the Fed.

Horace D. – you’ll excuse us for knowing only plain English.

When people can get either a Tablet for $200 that lets them do most of what they do with a Tablet (surf the web, check email, watch movies, play games, check Facebook) or a Tablet for $500 that lets them do the same stuff and a little more and also get to show how artistic and special and well-off they are …

Guess who’s going to win with the majority of people? Guess what happens when there are 20 different Tablets in the $200 to $300 range competing with the $500 Aston Martin ‘James Bond’s Car’ Tablet?

We don’t need a trajectory of subsidized analytical mediocrity posturing as fortune-telling. Aren’t you the same Apple acolytes who wax eloquent about how Apple talks in terms customers understand – 10,000 songs instead of 2 GB?

Well, everyone understands $300 cheaper. Our friends and neighbours might not understand the ‘Trajectory of Improvement’ – but they sure understand $300 cheaper with 90% of the same functionality. They also understand recession and not paying a premium just to advertise a brand.

His three examples (to support his analytical drivel) are set-top boxes, video game consoles, and the Blackberry. Really? Perhaps when talking about ‘Post-PC’ devices we should look back to the bigger lessons from the history of the PC industry?

Kindle Fire will be the catalyst for the domination of low priced Tablets

Here’s what Horace D. ends his analysis with -

 this discussion on the asymmetry of device-based services to product models leads me to conclude that the Fire will not have the opportunity to disrupt the iPad or tablets in general.

I have no idea exactly what a ‘discussion on the asymmetry of device-based services to product models’ is.

However, given that every Tablet maker is cutting the prices of their Tablets drastically, and that even Apple acolytes are talking about Kindle Fire and how it is not going to affect iPad at all, my suggestion would be to wait 5-6 months before claiming that a $199 Tablet will not disrupt sales of the existing $500 Tablets.

Perhaps we could just wait a few years and then, when 80% of Tablet sales are not iTablet sales, we can look back at Tablets like the $250 Nook Color and the $199 Kindle Fire and perhaps admit that they did indeed kindle a transformation in the Tablet Market.

Just to be absolutely clear: It’s not that Kindle Fire will beat the iPad. It is that Fire will force Tablets in general to stop being iPad clones (on price and looks and features) and will thus lead to much more viable Tablet competitors. Those are the ones that will tear down iPad’s market share.

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