Kindle Tablet thoughts and wondering what it means for Kindle 4

Amongst all the rumors and controlled leaks about the Kindle Tablet the one thing that has begun to gnaw at me is the lack of news or rumors about the Kindle 4.

Quite a few Kindle owners have mentioned their concern over whether Amazon will stop focusing on the Kindle as eReader and start focusing on either Kindle Tablet as Tablet or Kindle Tablet as Reading Tablet.

It’s a very valid concern and this post is just some thoughts about what direction Amazon might take.

Reasons why the Kindle should be safe

There are some very good reasons why the Kindle should be safe (reasons why a Kindle 4 should be out either by November 2011 or, in the worst case, by February 2012) –

  1. The Kindle is undoubtedly a success. B&N’s Nook is a billion dollar business now (just check their last two earnings reports) so it’d be safe to assume Kindle is a $2 billion or more business for Amazon.
  2. The Kindle protects the huge revenue stream Amazon gets from physical books. As people transition from physical books to ebooks they transition from being 25% Amazon.com to 75% Kindle. There is no way that Amazon would risk a revenue stream that has played such a huge part in its success.
  3. The Kindle gets people to Amazon.com. Kindle eBooks are in many ways a loss leader that get people to Amazon.com where they buy 42″ LCDs and watches and other big-ticket items.
  4. Books hold great nostalgia for the company. Imagine a world where people think of Apple when they think books – Amazon would be loath to let that happen. The Kindle is safe because Amazon is probably emotionally attached to being the destination for books.
  5. Kindle is the best device for reading books largely due to eInk and LCD based devices can’t really compete – unless you are LCD compatible or wedded to the Church of Free or the Church of Special Aesthetic Sensibilities. Which means that a company that wants to be the #1 source for books and booklovers needs to have a device built on eInk. Basically, Amazon will have to always have a reading device built on eInk and that makes Kindle pretty safe.
  6. It’s unlikely Amazon would be naive enough to end a product line that is a HUGE hit. If you’ve managed to sell 4 to 8 million devices in a year it makes little sense to stop investing in the device.
  7. Qualcomm has a company interested enough in its Mirasol eInk/ePaper displays for Qualcomm to invest $2 billion into an eInk/ePaper screen manufacturing plant. Whether that’s Amazon or a rival it will force Amazon to use color eInk in a future Kindle (whether it’s Qualcomm or eInk Triton from PVI/eInk). Amazon will have to cover that angle of attack even if it plans to focus on Tablets. And the only way to defend is with an improved Kindle that has a color eInk screen.
  8. B&N and Sony are both improving their eInk Readers. That forces Amazon to play catch-up. If its competitors were letting it waltz away then Amazon could have ignored the Kindle and treat it as a cash cow. However, both B&N and Sony have released touch eInk eReaders and that forces Amazon to improve the Kindle.
  9. The Kindle is a mini Amazon Store in people’s hands. Amazon isn’t going to reveal the full extent of its plans until there are 20 to 30 million Kindles in people’s hands. Then the full power will become obvious.
  10. The Kindle is now very, very cheap. Once it hits $100 we can
  11. The Kindle is quickly reaching a price point where it has a shot at literally replacing paper.

The combination of –

  • The scope of the Kindle’s success.
  • The strategic importance of Books – both as a revenue stream and to get people to Amazon.com.
  • The nostalgia Amazon probably has for selling books and being the top online bookstore.
  • The imminent arrival of Qualcomm Mirasol color eInk.
  • The continuing improvement of Kindle Rivals.
  • The role of Kindles as mini Amazon Stores.
  • Kindle now hitting very tempting price points.
  • Kindle as a potential replacement for paper.

Leads to the Kindle being in a surprisingly strong position. It would be madness for Amazon to stop making eInk based Kindles that it can sell as $100 pathways to Amazon.com.

That brings us to a far more realistic threat to the Kindle – death by distraction.

Just how much focus will Amazon keep on the Kindle?

The real threat to the Kindle is not that Amazon abandons it – It’s that Amazon takes the continuing success of the Kindle for granted and starts focusing Lab 126 and the Kindle Team on the iPad/Nook Color-targeting Kindle Tablet.

Amazon has just one team that knows how to design and sell hardware – The combination of Lab 126 and the Kindle Team. While we (and Amazon) would like to believe that this team can magically grow and evolve and build Kindle Tablets while still focusing on Kindle 4 and Kindle 5 – that is going to be really, really difficult.

Let’s start by looking at why Amazon might prioritize a Kindle Tablet over the Kindle.

Kindle Tablet is strategically very important

With the Kindle Amazon has prepared itself for the shift from books to ebooks. That still leaves the shift from CDs and DVDs and boxed video games to music downloads and movie downloads and game downloads.

Amazon has no device for that shift. It could leverage iPad and iPhone – if it’s willing to pay Apple’s 30% tax. However, sooner or later Apple would kick it out and take over completely. Amazon has to take over the entire pipeline. It can’t be dependent on another company.

Amazon’s only options are to –

  1. Build its own device. Which is what the Kindle Tablet really is.
  2. Take over a competing Ecosystem. That’s what Amazon’s Android App Store is about (in addition to supporting the Kindle Tablet).

If Amazon wants to preserve its huge revenue channels of music CD sales and movie DVD sales and video game sales – then the Kindle Tablet is the savior. Perhaps the only one.

That instantly makes it very important. More important than the Kindle because Music+Movies+Games is worth more than books. More important than the Kindle because a Tablet is better suited for shopping. More important than the Kindle because the Kindle has already carved out the top spot in its market and keeping that spot should, in theory, require far less effort than fighting the iPad monster.

Can Amazon be as effective focusing on two areas?

It’s debatable. My gut instinct says that an increased focus on the Kindle Tablet (due to its greater strategic importance) will eventually have a negative effect on the evolution and quality of the Kindle. You could even argue that we are beginning to see signs of this.

Kindle is already a step behind other eReaders technologically due to its lack of touch. It has a better store and a much better infrastructure – However, the device is over a year old and needs a refresh. Would that be the case if Amazon weren’t focusing so hard on the Kindle Tablet? Probably not.

Even if Amazon were/is capable of balancing the needs of the Kindle and the Kindle Tablet there is another factor that almost guarantees the Kindle will suffer from a little neglect.

The Kindle Tablet battle is a far tougher one (in addition to being more important)

Both iPad and Nook Color are very strong competitors. Far stronger than Nook 2 or Sony’s T1 Terminator eReader.

Nook Color is scary because of its great screen, low price ($249), and relatively rapid update path (it’s added features at a very healthy clip). iPad is scary for all the reasons the Press spends all its time salivating over. Far worse, both have an early mover advantage – iPad is the first Tablet and Nook Color is the first reading tablet.

Not only will Amazon be tempted to prioritize the Kindle Tablet (due to its greater importance), it will be forced to throw a lot more resources at the Kindle Tablet due to the quality of the competition and their early lead.

Kindle Tablet will probably see an incredible amount of resources devoted to it over the next 3 to 5 years. Amazon doesn’t have a choice – Jeff Bezos is unlikely to want to bow before Apple’s CEO’s whims and fancies.

Are all resources devoted to Kindle Tablet resources not needed by the Kindle?

Obviously not. There’s no rational way to argue that the Kindle, after establishing an entire new market and selling 10 million+ units, doesn’t need all the resources it can get. Amazon should be doubling down and expanding the category as much as possible. It can’t – Because those resources are tied up in making the Kindle Tablet.

The Prize of Winning the Tablet Wars is the Nail in the Coffin of Kindle getting a Fair Amount of Attention

Amazon almost has the eReader war won. The prize is rich but it doesn’t compare to the prize of the Tablet Wars.

There are a few things to consider here –

  1. The Tablet Wars are still in their infancy. And by ‘Tablet’ we mean the personal consumption device that users will use to buy digital goods (and eventually all sorts of goods).
  2. The low-priced Tablet market is there for the taking.
  3. Without Steve Jobs Apple is a shadow of its former self when it comes to envisioning the future and leading customers to it. iPad might keep growing but the next big step in the evolution of the Tablet/Personal-Consumption-Device Space is unlikely to come from Apple.
  4. Amazon’s ambition is immense. It’s not going to be satisfied to control ebooks while Apple controls everything else and Valve controls game downloads. It sees that big gaping hole waiting to be filled by a non-iPad Tablet.
  5.  While winning the Tablet Wars is critical for Amazon to preserve music and movie and game revenue streams, it leads to far bigger prizes.

There’s just no way that Amazon can ignore the scope of the opportunity.

It’s not only a huge threat to Amazon’s existing revenue streams it’s also the possibility that Amazon absolutely fortifies its position as the Omnipresent Store of the Future.

Tablets just make for much better Personal Shopping Devices than eReaders. Not to mention that only people who actually read will buy eReaders.

Unless Kindle Tablet is a failure the Kindle is going to be massively deprioritized

If Kindle Tablet comes out, sells 5 million units at $249 each, and takes up a big part of the Tablet Market – then its going to become Amazon’s main focus. The #1, #2, and #3 priority. There’s just so much at stake.

Then Kindle gets deprioritized and a small skeleton team keeps doing updates and making sure Kindle continues to narrowly edge the competition. There’s enough room for a little complacency.

Meanwhile the lion’s share of resources go to the Kindle Tablet as Amazon fights with Apple (and B&N and Samsung and Microsoft) to be the Tablet of the Future.

Basically, we are going to see one of two futures unfold –

  1. Kindle Tablet is a hit and Amazon tries to use a $200 or $250 Tablet to upend the iPad’s lead in Tablets.
  2. Kindle Tablet is a failure and Amazon tries to evolve Kindle into a color eInk device and attack Tablets on fronts such as battery life.

In either case the Kindle’s continued evolution as a reading device is under threat.

Kindle Tablet vs Nook Color 2 (comparison + predictions)

It seems that in addition to the Kindle vs Nook contest we will have a Kindle Tablet vs Nook Color 2 contest in 2011 Holiday Season.

At this point we only have nebulous details and it’s still fascinating to contrast what we know about each tablet and do a Kindle Tablet vs Nook Color 2 comparison.

Kindle Tablet vs Nook Color 2 – Price and Value for Money

B&N surprised everyone by releasing a really good Nook Color Reading Tablet for $249. We’re talking about a 7″ Tablet with an IPS screen with a density of 169 pixels per inch, 512 MB RAM, 8 GB memory, and a solid 800 Mhz processor.

It’s incredible value for money. Nook Color 2 is very likely to continue the trend. Expect a few improvements technically and a $249 price.

The rumors about the Kindle Tablet suggest that it will be $250 and will come with free Amazon Prime Membership. It’s quite likely that the free Prime membership will make the Kindle Tablet better value for money. Add on the fact that Amazon can sell Kindle Tablet owners lots of things (not just books) and we see why Amazon will have no problems beating Nook Color 2 in value for money.

Kindle Tablet gets the edge in value for money.

Please Note: Nearly all Kindle Tablet conjecture is based on this uncharacteristically good and balanced post at TechCrunch.

Kindle Tablet vs Nook Color 2 – First Generation vs Second Generation 

It’s worth noting that Nook Color 2 will have a year’s worth of experience and customer feedback. B&N has had a year to see how a Reading Tablet does, what customer pain points are, and how to deal with them.

Kindle Tablet is a first generation device. While Amazon can leverage the lessons it learnt from selling the Kindle, there is still a lot it hasn’t tried before.

B&N gets the clear edge here.

Predicted Sales for Kindle Tablet and Nook Color 2

An analyst has predicted Amazon might ship 5 to 10 million Kindle Tablets in 2011 Holiday Season. The 5 million figure would be wildly optimistic but is also quite possible.

Wildly optimistic because there might not be a Kindle Tablet market.

Quite possible because Amazon might eat up large portions of – The Nook Color Market, The Android Tablet Market, The iPad Market.

DigiTimes expects 2 to 3 million Nook Colors to be shipped in 2011.

My predictions:

  1. 4 to 7 million Kindle Tablets. Sold out 3 weeks before Christmas.
  2. 3 million Nook Color 2s. Sold out by mid-November 2011.

Both companies are underestimating the demand for a cheap, high quality tablet. B&N’s main problem will be creating awareness for the Nook Color 2 and it will be helped greatly by all the ‘Kindle Tablet is a Nook Color Killer’ articles.

Amazon will win and B&N will be very happy (and it might end up with more total Nook Colors than there are Kindle Tablets).

Which Reading Tablet will be better for reading?

This is a very tough question.

Firstly, Nook Color is a very impressive reading device. The pros – great size, readable screen, readable at night, focus on reading, color, touchscreen, powerful processor. The cons – weight is a bit of a pain, no eInk so not as easy on the eyes, bright sunlight kills reading like it would a vampire, battery life is nothing like eReaders.

Overall, the pros outweigh the cons and Nook Color is an effective Reading Tablet.

The big concern with Kindle Tablet is that Amazon sells movies and music and TV shows and will probably make a device optimized for consuming those as well as books.

B&N has the edge unless Amazon ends up releasing a pure Reading Tablet.

Please Note: If you fall into the 10% of the population that are not distracted ever from what you intended to do, then this point doesn’t apply to you.

Nook Color App Store vs Kindle Tablet App Store

Nook Color has a fledgling app store with 550 or so Apps. There are some big ones like Angry Birds and Ms. PacMan but it’s still a small and growing store.

Amazon’s Android App Store has tens of thousands of Apps and lots of big names and a ‘Free App of the Day’ feature guaranteed to get you more zero-price sales than you would think possible.

Amazon has a very clear edge here. B&N has 3 months to beef up its store but is unlikely to ever catch up in terms of numbers.

The Lack of Openness and Care Bear Worthiness of Both Devices

Unlike companies that are OPEN and GOOD and steal your information while you’re not looking, B&N and Amazon are EVIL and make you pay for stuff before getting it. Part of this means that they take Android (an OS meant to be pure and unsullied by anything other than advertising and data collection) and dirty it with their custom OS layers and the concept of paying for apps and content.

For Nook Color 2 it’s easy to root and run Android and get everything for free.

For Kindle Tablet it’ll be close to impossible.

B&N gets the edge here as hackers and people who were Born to Demand Free will embrace its hackable qualities.

User Interface and Screen and Touch

Coupling these together because they go well together.

Nook Color 2 has a surprisingly well done user interface. The screen is splendid. Touch has some problems (touch at the edge isn’t great and sometimes touch and typing aren’t smooth).

Amazon is making its own entire user interface over Android (a good decision considering how unappealing Android can be visually). It promises to be sharp and snappy and very Kindly in its colors and feel.

This is an unknown until the two devices are out. It’s Amazon’s experience with user interfaces on the web competing with B&N’s already good interface and its year of Tablet experience.

Specifications – Which Reading Tablet will be more loaded?

B&N did a stunning job with Nook Color. There really are no words to do justice to a Reading Tablet for $250 that includes as many goodies as the Nook Color has.

Amazon may or may not match that spec-sheet with the Amazon Kindle Tablet. If it doesn’t – it’ll be rather unfortunate. If it does – movies and games will be really impressive on the Kindle Tablet.

B&N holds the edge here unless Amazon shows it can match the Nook Color’s impressive specs.

Which Reading Tablet will be more Fun?

Tough question.

Don’t really have an answer. After seeing both, and playing with both, will add an update.

Which Reading Tablet will be better for Kids and Families with Kids?

B&N has put HUGE emphasis on making things good for Kids. Perhaps its retail experience has taught it that kids determine book sales quite often. Perhaps everyone at B&N has kids and wants a device they can use. Whatever the reason, B&N’s Nook Color is very good for kids.

This is also reflected in things like NOOKKids (a software app for kids) and via a focus on books and apps for kids (for the Nook Color).

Amazon hasn’t really shown any desire to focus on kids. It might or it might not focus on kids with the Amazon Kindle Tablet. Prime and Sharing will be good for families but don’t think there will be much of an emphasis on kids.

B&N will probably have the edge.

Kindle Tablet vs Nook Color 2 – Customer Support

Amazon is pretty darn good at customer support.

B&N’s big selling point will be in-store help and the ability to actually play with a device in store before buying it.

However, overall, Amazon’s ruthless focus on customer service will probably win out.

Thoughts

It’s very strange that Amazon would target Nook Color 2 instead of targeting iPad 2. It’s smart because it’s obviously a more reasonable target. However, it’s unlike Amazon to go for a smaller target.

Kindle Tablet vs Nook Color 2 is definitely going to change things. It’s going to make Reading Tablets a bigger force. It’s going to put downward pressure on Tablet prices. It’s going to accelerate the rise of ebooks. It might just sell 8 million non-iPad Tablets in 2011 and show there’s a HUGE market for Tablets of all sorts – especially reasonably priced ones. Kindle Tablet vs Nook Color 2 is going to give rise to two winners and might just cement Kindle Tablet and Nook Color 2 as the 2nd and 3rd most popular Tablets (a scenario that absolutely no one would have dreamt of a few years ago).

7" Kindle Tablet, 6" Sony Reader, Kindle Tablet Thoughts

DigiTimes speculates that Amazon’s 7″ Kindle Tablet will start shipping in October 2011. It also suggests that the 10″ Kindle Tablet will arrive in early 2012. The latter seems very likely since we can depend on Amazon to miss the opportunity to make the most of this Holiday Season – choosing instead to launch around the same time as the iPad 3.

What better way to make things tough for yourself than launch your 1st generation 10″ Kindle Tablet around the same time as the third generation iPad 3?

DigiTimes seems pretty confident that the 7″ Kindle Tablet will be shipping in October

Amazon’s 7-inch tablet PC, which is supplied by Quanta Computer, is expected to start shipping in October, the sources added.

It also throws in some rather impressive-sounding Kindle sales estimates –

In addition to the tablet PC, Amazon also outsources its Kindle e-book reader to Foxconn with an estimated volume of 15-18 million units, accounting for 60-70% of global e-book reader shipments of 25-30 million units in 2011.

15 to 18 million units in 2011 for just the Kindle alone? That’s a lot of people wondering why there are Ads in their screensavers.

What do we know about the Kindle Tablet so far?

It’s a confusing and completely undependable list of oddities –

  1. There are actually two Kindle Tablets – a 7″ and a 10″.
  2. The Tablets might be called Hollywood or Scribe.
  3. The 7″ might be targeted at the Nook Color.
  4. The 10″ is probably targeted at the Android Tablet space. Some people think it’s targeted at the iPad.
  5. Kindle Tablet might see 5 million or so units sold in 2011. This is probably an analyst compensating for missing on Kindle sales projections.
  6. The 7″ Tablet has a dual core processor while the 10″ tablet has a quad-core processor. Which matches perfectly the number of people interested in how many cores the processor of their Tablet has – somewhere between 2 and 4.
  7. There is strong speculation that Amazon will price its Tablets much cheaper than the iPad. ‘Journalists’ claim it will be ‘hundreds of dollars’ lower.
  8. There is weak speculation that the 7″ Tablet will come in at $249 and will challenge the Nook Color.
  9. One group claims the Kindle Tablet is aimed at video and TV show viewing. Another group claims that the Kindle Tablet will actually be a reading tablet. Given that Amazon has to take on both the 7″ Nook Color and the 10″ iPad it’s quite possible that both groups of people are correct and Amazon has one arrow earmarked for each of its rivals.

It’s all very confusing. The Kindle Tablet is all things to all people. Of course, it’s going to come out and leave some people very disappointed by its inability to butter your toast on the right side.

Sony releases a new eReader

Yes, Sony is still releasing eReaders. Yes, ‘journalists’ are again anointing a Sony eReader as the new ‘Kindle Killer’.

Let’s think about this again – Sony got whipped by Amazon, then by B&N, and then by Kobo. Yet, its latest eReader is suddenly a ‘Kindle Killer’ because … It has wireless library book downloads.

Didn’t see that coming.

4 years after Amazon released the Kindle with wireless book downloads via 3G we have Sony offering wireless library book downloads via WiFi. The Convenience. The Promptness of the Response. How could any company possibly compete with Sony when within the ludicrously short time-span of 4 years Sony has sort of responded to free 3G book downloads?

Gizmodo can’t decide whether to make fun of it or to consider it a threat to the Kindle. Here is some of what it writes –

The PRS-T1, though, could be Sony’s comeback kid.

The six-inch E-ink ebook reader is the world’s lightest at that size, and its touchscreen display means …

Does Sony really expect to compete by promoting the PRS-T1 as ‘the lightest eReader in the world’ and does it really think ‘wireless library downloads’ are a meaningful feature?

Sometimes it’s the Difficult Features that make the Difference

Amazon’s 3G based book downloads feature is a big competitive advantage. Not just because it offers incredible convenience but also because very few companies are willing to go through the level of pain that dealing with wireless providers entails.

Can you imagine working with a beast like AT&T and negotiating all sorts of torturous agreements just so that users can get books wirelessly? All that pain just to save users the effort of finding a PC or a digital kiosk – that’s madness.

eReader makers not named Amazon either won’t go to the trouble (Sony) or found it too painful (B&N). Which leaves Amazon with a pretty big competitive advantage.

The Kindle says – If you can get a cellphone signal then you can get your book in 60 seconds.

Sony says – Customers aren’t really asking for 3G downloads.

That is the real reason Sony doesn’t have much of a chance – It just isn’t willing to do the really tough stuff. It hasn’t been willing to do the really tough stuff since November 2007 and that’s why it’s gone from being the first entrant in the market to a #3 or #4 player.

The Delay in the launch of the Kindle Tablet is Lowering its Probability of Success

Things are set up beautifully right now – Nook Color is selling well, the HP TouchPad at $100 took off so fast that HP is thinking about un-killing the TouchPad, companies like Asus are selling half a million Tablets a month (supposedly).

Couple that with the iPad 3 (with its Retina Display and Quadruple Face Time) being delayed to 2012.

Right now is the perfect time for Amazon to launch. Both Tablets (if there really are two Tablets).

What in the world is Amazon waiting for? For B&N to release the Nook Color 2 and take away all the attention? For the iPad 3 to launch so that Amazon can blame it if things don’t take off? For another company to steal the perfect opportunity? Some sort of fear that it might turn into a hardware manufacturer?

It’s incredibly strange that Amazon is unable to ship a Kindle Tablet when B&N was able to ship a really good reading tablet nearly a year ago.

If Amazon does ship a very solid, very reasonably priced Kindle Tablet in October it will have a huge hit on its hands. The demand is there. If it waits until early 2012 to ship one or both of its Kindle Tablets then it will miss out on the Holiday Season and also gift Apple most of the people who would have bought a 10″ Kindle Tablet this year. Holiday Season 2011 is it for Amazon’s Tablet hopes – If it doesn’t ship this year, it’s going to be in very big trouble (and not even Mirasol supermagicalfaeriedust screens with generous helpings of PrimeRib will be able to save it).