You’d think this would be obvious, but ever since Apple demonstrated
with the iPod that the user experience was more important than the
hardware alone, you’d think vendors would understand the importance of a
complete offering. Yet we saw iPod competitor after competitor fail
and, at least initially, the iPhone competitors didn’t do much better
until the carriers stepped in and demanded improvements and Google
copied Apple.
On tablets we seemed to start all over again and even Google, who by
then should have known better, struggled. Well now we have the Kindle
Fire and it is a hit by any measure.
I’ve been using mine for several weeks now and my wife has just
partially weaned herself off her iPad and is loving her Kindle Fire as
well, suggesting it has a play no only with non-iPad users but with many
iPad fans (she loves her iPad) as well.
Amazon got there not by having the best hardware, even the new Barnes
and Noble Nook Tablet is a bit better, but by having the best backend
and Amazon’s services on the Fire are actually superior in a number of ways to the iPad.
While iPads are still outselling the Kindle at a 2 to 1 rate, this is
still the closest by far that anyone has come to Apple’s numbers which
typically are more like 10 to 1 the nearest competitor.
Once you realize that this is a first generation product from Amazon
and a brand new service against a second generation product from Apple
with a far more mature total solution, the Kindle Fire’s success is even
more interesting. However, it became successful by getting where Apple
was going first.
Kindle Fire
Recalling the Zune Failure
There is an infamous meeting that occurred at Microsoft shortly after
the iPod became dominant and Microsoft realized their “Plays for Sure”
platform was stalling. In that meeting, a number of executives argued
strongly that Microsoft should go where Apple was going first and create
a phone rather than chasing Apple with an iPod offering. Steve Ballmer,
Microsoft’s CEO, in what was likely his biggest public mistake, decided
instead to do the Zune and basically assured Apple’s continued victory
contributing to Microsoft’s own market stall.
The lesson here was that even a company the size and power of
Microsoft can’t chase an already dominant company from behind, but since
they didn’t then do the phone, whether a firm could get out in front
has yet to be tested.
Getting Where Apple is Going with the iPad – First
This is what the Kindle Fire did, after seeing Apple heavily monetize
and subsidize the iPhone down from around $600 at launch to around $200
now Amazon got ahead of the wave and launched a product designed to
live profitably at a $200 price point. They strengthened the backend,
supplied a subscription movie service (under their Prime offering) and
matched Apple on music.
I was planning on giving out several iPads this year and instead gave
out more Kindle Fire’s myself largely because I found I enjoyed playing
with it more than any other tablet, including the iPad (largely thanks
to it being more durable and more portable).
Wrapping Up
Eventually I expect Apple will have a tablet in the $200 price range.
They first moved their phone there and now you can get an iPod Touch
for around this same price. $200 is that magic price point when many
husbands feel they don’t have to ask permission to buy something and the
market opens up a lot when a product gets there as Apple has discovered
before.
Amazon hasn’t beaten Apple yet and they might never beat them, but
Amazon has done better competing with Apple with the Kindle Fire than
anybody selling hardware has done with an MP3 player, a smartphone, or a
Tablet. Google, so far, has only been able to compete by giving what
they create away for free. Amazon is proving you can both compete with
Apple and make money doing it – something, I think, much of the rest of
the market still seems to need to learn.
In the end, Amazon kicked a little Apple butt not by trying to clone
the iPad but by going where Apple was likely to eventually go and got
there first.
Rob Enderle in Business Products on December 02
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