It’s the first time that I’ve been more excited about the release of a Tablet than of a Kindle. In fact, both Kindle Fire and Nook Color 2 are amazingly exciting.
Why Kindle Touch and Kindle 4 are not that exciting
Part of it has to do with the painful loss of the keyboard in the new Kindles and part of it has to do with not appreciating the two big things the new Kindles provide – Touch and a $79 price.
It would be inappropriate to say that Touch is the equivalent of an extra cup-holder in a car (It’s more like going from no cup-holders to cup-holders). However, it isn’t really about reading.
The $79 price is meaningful because we expand the market of people who have access to ebooks. However, a $79 Kindle 4 isn’t game-changing when you have $99 Kindle 3s and $99 Kindle Touches.
The new Kindles represent the best and worst of Amazon.
- An excessive committment to incremental improvement – to the point that Kindle 4 is more like Kindle 2.75 (3 – .25) and Kindle Touch is Kindle 3.25.
- A ridiculous committment to getting Kindles into the hands of everyone who has ever even thought about reading a book. Ridiculous in a good sense.
But they aren’t game-changers. The real game changers are Kindle Fire and Nook Color 2. First, let’s see something that most people don’t know about i.e. the rise of Android Tablets.
27% of Tablet Sales in the last Quarter were Android Tablets – Even before Kindle Fire and Nook Color 2 arrived
Fierce Wireless has an eye-opening article about the growth of Android Tablets.
Strategy Analytics report –
- iPad had 66.6% of the Tablet Market in the third quarter of 2011.
- Android Tablets captured 26.9% of the market. Up from 2.3%.
- Apple had 11.1 million iPad shipments. Android Tablets numbered 4.5 million shipments.
Let’s think about that – Android Tablets went from 2.3% of the Tablet Market to 26.9%.
B&N’s Nook Color is probably single-handedly making up 10% of the Tablet Market at this point. Once Kindle Fire and Nook Color 2 come out – they might well account for 25% to 50% of the Tablet Market themselves.
Heresy. It’s absolutely wrong to even suggest that such inferior Tablets might eat up so much of the market.
Yet, it’s the truth.
Let’s see why.
Kindle Fire and Nook Color 2 are competing against each other, and against the iPad
It’s quite easy to see why Kindle Fire and Nook Color 2 are in competition. Kindle Fire is basically Amazon realizing that Tablets are a market and a channel. It has seen B&N prove that Tablets not produced by Apple can do well. And it’s acting – better late than never.
Why Kindle Fire and Nook Color 2 are competing against iPad becomes clearer when you think about what an iPad is.
An iPad is –
- A device lots of iDevice owners are buying. Let’s not discount the importance of this.
- Possibly the beginning of a post-PC world where everyone prioritizes consumption over creation.
- An expensive toy.
- Mobile computing done right.
- A killer device which is just missing the particular use that will make it indispensable. Note: There are arguments that watching movies, checking email, accessing Facebook, surfing the Internet, etc. are all the killer uses of the iPad. Which, if true, makes the case for the rise of Kindle Fire and Nook Color 2 stronger.
- A status symbol that you can use as a status symbol without being overly nouveau-riche.
- A very well marketed product.
- Shiny new technology.
- A way to sell all sorts of content.
- Revolutionary – though it isn’t quite clear what the revolution is. Or whether it is the iPad that will complete the revolution.
- Directionless now that there is no master salesman to tell us just why it is revolutionary.
- An actual ‘Personal’ computer. The first time ever that a computer was really personal and understood your thoughts and feelings and gave you emotions like that first movie you watched holding your sweetheart’s hand. Oh, iPad – you really do understand me.
If you look at that list, Kindle Fire and Nook Color 2 (and, for that matter, Nook Color) can do all the meaningful and possibly meaningful things on that list. Except being a status symbol (which, in a world of 7 billion people, should not be discounted).
The things that people use iPads for i.e. movies, surfing, email, etc. – are all quite possible on Kindle Fire and Nook Color. In fact, the 7″ size is actually better suited (for most people) for some things such as Email and Surfing the web.
A Tablet at $500 can reach tens of millions of people. It can be the best possible status symbol that these tens of millions of people are the chosen few – The 0.5% of the world’s population that can afford a $500 device.
A Tablet at $200 can reach hundreds of millions of people. Provided the Tablet really is ushering in a revolution, the $200 Tablet becomes far more important than the $500 Tablet. $200 Tablets can take those 6.95 billion people who are left out of the ‘Elite Revolution of the Tablet’ and give at least half a billion of them a chance to participate in the magic and revolution of Tablets. To be able to watch movies on a 7″ or 10″ screen while they sit on the couch in front of their 30″ TV screens. To send email via a device that has a larger screen than their cellphones and that is not as far away as their PC.
That’s the thing that everyone seems to be missing. Revolutionary devices aren’t limited to Marie Antoinette and the nobles – cake is.
If Tablets really are revolutionary, then Kindle Fire and Nook Color 2 will end up being the actual revolutionaries
Consider the scenarios –
- Tablets are revolutionary but only for people who can afford a $500 device. That certainly limits market size and makes it hard to argue it’s anything other than a ‘revolution for the Elite’. It also guarantees iPad will never lose – unless someone makes a $750 tablet with purple headphones. You have to admit – it would be a pretty hollow revolution if it only affected people able to afford $500 devices with no known killer use case scenario.
- Tablets are revolutionary for everyone. In which case a $200 Tablet that sacrifices status symbol capabilities and aesthetic flourish, but keeps 90% of the ‘actual usage value’ of Tablets, will become the real revolution.
- Tablets are just toys. In this case all Tablets will do well until people move on to the next shiny toy.
At $200 and $250 (probably), Kindle Fire and Nook Color 2 can reach 10 to 20 times more people than a $500 iPad. Apple knows this and knows that it must release a $300 mini iPad soon. However, and this is key, the success of the Nook Color and the supposed/probable/imminent success of the Kindle Fire is going to motivate every single technology company to get back into Tablets. Achilles has a heel and Nook Color and Kindle Fire are pinpointing it for everyone to see.
It’s all very simple.
If Tablets really are a revolution – then $200 Tablets that can reach a billion people are the ones that will carry the load.
Kindle Fire and Nook Color 2 actually beat the iPad in some core functions
Nook Color has a better quality screen than the iPad (iPad, not iPad 2 as don’t own one and don’t know what revolutionary and magical technologies it has in its screen). It’s heresy to mention such things but the $249 Nook Color has an IPS LCD screen with 169 dpi. It’s an absolutely amazing screen. Nook Color 2 will definitely be better than iPad 2 in at least some areas (SD card slot, for example).
Kindle Fire has the Silk Browser which will presumably (hopefully?) be lightning fast. Amazon may even do the unthinkable and make an OS that’s faster and easier to use than iPad 2.
We aren’t just talking about things that ‘are needed for the aesthetic purity of the device’ i.e. no USB slots and no SD card slots. We are talking about core things – Surfing the Net, Screen Quality. We are getting into dangerous territory here. Apple people might have to start explaining how Safari is still a better browser because the slower speed lets you better appreciate the smoothness of touch of the screen. What is life if not an opportunity to take things slow and appreciate the finer things in life. Buy an iPad – get time to stand and stare.
What happens when the $200 Kindle Fire Tablet is easier to hold, better for browsing, and much better value for money than the $500 Tablet?
We don’t know. However, it would be safe to assume that a considerable number of people would buy it. In fact, all signs indicate that tons of people already are.
Of course, analysts and Apple people will say that not a single person out of the 5 million or so people who are likely to buy a Kindle Fire in 2011 would have bought an iPad.
A $200 Tablet couldn’t possibly affect a $500 Tablet. Who would sacrifice white headphones for a measly $300?
What happens if the $250 Nook Color 2 (perhaps even $200) has better features than the $500 Tablet?
Again, we don’t know. However, it’s quite likely that Nook Color 2 will sell very well if it beats iPad 2 in some areas. Because then the price difference becomes a huge factor.
If Nook Color is selling well enough to help propel Android Tablets to 27.9% market share – then it would be safe to assume that an improved Nook Color 2 would sell even more and take away even more market share from the iPad.
Notice the trend – Kindle Fire funnels away some iPad sales, Nook Color 2 funnels away some more iPad sales, Android Tablets keep increasing market share.
It’s very, very interesting.
The Magical and Revolutionary Barrier is Gone
That’s the truth.
The magical and revolutionary and insanely great halo that was protecting iPad and keeping Android Tablets at 2.3% market share is gone. Forever.
B&N figured out that it couldn’t compete with iPad at $500 and it went with $250. Asus figured out that it couldn’t compete with iPad by copying the design and it went with the Transformer. Perhaps most importantly, Amazon realized it’s a market it must enter and one it must enter with a low-priced Tablet and it is releasing a $200 Kindle Fire Tablet.
You can’t compete with a $500 Status Symbol and Tablet using a $500 Tablet. But you can compete with it very effectively using a $250 Tablet. That’s B&N’s lesson and it’s the lesson that Apple’s competitors can use to beat it in any market. Seriously, each and every Apple product has that huge weakness – Unfortunately, its competitors keep playing up to its strengths instead of attacking its weaknesses.
It’s a relief that there are at least two companies that are attacking Achilles’ Heel instead of testing the strength of his Shield with their arrows.
It shouldn’t be so difficult – History is a great teacher.
Apple stole the Graphical User Interface idea from Xerox and figured out how to make a beautiful, expensive computer out of it. Microsoft stole the Graphical User Interface Idea from Xerox and figured out how to make PCs cheap and put a PC on every desk.
Microsoft tried and failed to make Tablet Computers. Apple succeeded in showing everyone there is a tablet market. But it is repeating its mistakes. Amazon and B&N and Asus and other companies are going to put a Tablet in every person’s hands – even if those hands can’t afford a $500 Tablet.
History is such a beautiful thing – if you learn the lessons it teaches you.
The Vatican of Consumerism is now directionless and defenceless and the armies of value for money and thrift are fast approaching. Apple’s cash hoard and its patent arsenal are going to come in very handy but they aren’t going to be enough. It’s the beginning of the end of consumerism and conspicuous consumption in tech devices. Even if we don’t know it yet.