“My assessment of the Kindle Fire is based on the two attributes which Amazon highlights as the key selling points which offer a basis of differentiation and potential for asymmetric competition: a low price and a new browsing model. I believe that these two attributes result in two opportunities: one for low end disruption and another of new market disruption,” Horace Dediu writes for Asymco. “I reject the first and tentatively support the second (in this post I will make the case against the low end disruptive potential and use a second post to make the case for it being a new market disruption).”
“The Fire will not have the opportunity to disrupt the iPad or tablets in general. Amazon sees the hardware and software of a device as a commodity and the content and its distribution as valuable. This assumes that the device is ‘good enough’ and will not require deep re-architecting or that new input methods can be easily absorbed,” ,” Dediu writes. “In short, they see the tablet as at the end of its evolutionary path. Apple sees the exact opposite. The iPad is 18 months old, and as they say in the ads, they see it as only the beginning.”
Much more in the full article – recommended – here.
i see a lot more kindles than ipads every day. i think this guy is wrong and it will be a success.
there are reports you can buy the OEM version of this for $199 with vanilla android. i doubt amazon is losing any money
for content delivery they are using the left overs of their enterprise cloud resources
Well, then we are in different circles, my friend, because I see very few Kindles but iPads all over.
The point about obtaining a $199 OEM tablet with vanilla android is that there isn’t any profit for Amazon in the tablet. And maybe Amazon got a great deal for ordering a large number of tablets that RIM was backing out on.
But the big point of the article is that the iPad is a world-wide PRODUCT, and the Fire is not because it ultimately is so tied to Amazon services to be rendered almost worthless outside of the U.S., particularly with no cell network possibilities.
NYC subway, kindles everywhere
ipad is an awesome product but the $500 entry price is a limiting factor.
my guess is that amazon is selling them at cost and using slightly less quality components than RIM. and will make it up on the subscription fees to magazines, amazon prime, diapers and everything else they sell
if i’m right they don’t even have to make a profit of them. if they break even they win. books are going from an open paper format to DRM’d ebook format. if amazon doesn’t have a decent reader they will lose their 3 core businesses over the next few years.
$500 is too much? Concern Troll detected.
I hear that Amazon is losing $50.00 for selling each one of them!
It really doesn’t matter. Remember that the tablet is tied directly into Amazon’s book, music, and movie stores… So, anything they lose can be made back over time.
Oh puh-lease… in Manhattan?
I almost laughed out loud, you must be very very young.
The one place where apple equipment is cheap is NYC.
In the land where a small 2 bedroom walk up runs upwards of $2K/mo and just eating can (easily) cost $100/day, a $500 iPad seems like pocket change (which is why NYC is -literally- BLANKETED with iPads).
Take off those dark glasses son, and look around.
I have to agree. I take a bus from the suburbs to Manhattan every day and then the subway. Unfortunately the kindle is much more common than the iPad.
” I take a bus from the suburbs to Manhattan every day and then the subway. Unfortunately the kindle is much more common than the iPad.”
Only a NYNY fool would take an iPad on a crime ridden subway. It would be far less painful to loose a Kindle.
Most scumbags know Kindles aren’t really worth stealing so even they let NY Kindle users for the most part have a pass.
How can eating be $100 a day, every day?
iPad and Kindle Fire are just not competitors and I laugh at those who say they are -they are two different animals. In fact if anything they are just complementary. I’ll betcha people who have iPad’s will buy this too (as I have a Kindle & iPad) but it won’t ween anyone from an iPad. People who buy the Fire first will eventually buy an iPad as it will wet their appetite for the real flaming deal.
I agree 120%
I think you are confusing the word “disruptor” with “success”. Dediu was not implying that the KindleFire would not be successful. He was arguing that the Fire (whether successful or not) would have little impact on destroying Apple’s current tablet dominance.
So you work at Amazon? I don’t believe there is anywhere in the real world where Kindle sightings outstrip those of the iPad sightings. Wake up alent1234, you’re dreaming again.
It’s an evolution of the previous Kindle rather than a full on iPad competitor. I reckon Amazon will sell a lot of them, and a lot of books that users will read on them. Nice to see that another company actually gets the concept of building a “tablet” ecosystem around your existing business model.
Amen, Horace
Very interesting and well-reasoned article. It shows exactly why Apple focuses on great products and user experience, and the services (iTunes, iCloud, etc.) are supplementary and not the focus.
Competition is good for the iPad, whether it’s from Amazon or elsewhere. It keeps quality up and prices down. I think that the Kindle “Fire” and “Touch” will do well this holiday season. Still, Apple’s innovation will help it to maintain its tablet quality lead, but without someone at their heels, iPad creativity will happen at a slower pace.
Amazon will make its money on the Fire the same way the Google makes money from search and Android: selling the users to advertisers. that’s why the browser is set up to route all clicks through Amazon’s servers. Simple.
Everybody is talking about the Kindle Fire, wait till October 4th and we will see what gadget dominates the news media. iOS 5 will augment the value of existing iPad2 already in peoples hands, what will Amazon do with no revenue from the hardware or software to make it better in 6 moths from today?
What if…Apple decided to up the size of the iPod touch… iPodX. iPod Extreme. So we would have a regular sized ipod touch and a bigger one for gamers, readers…etc. Then what would Amazon do?