Amazon Kindle “fires” up the tablet market!
Amazon Kindle Fire: Playing to a niche, it re-draws rules in the Tablet segment
The $199 pricing from Amazon, is one of the best examples of penetrative pricing- where by Amazon can make more money later by selling books, movies, music, apps through its app store. The reason Amazon can do it is because it has an offering very similar to Apple where it’s controlling the device, platform (it has a modified version of Android) and app store. Hence, it’s looking at a long term revenue by following a penetration pricing strategy. In doing so, it’s also utilizing its existing capacity of billions of gigabytes of cloud storage combined with Amazon Silk interface for faster loading of webpages to provide a better user experience.The reason other tablet players in the market such as Samsung, HTC, Motorola among others can’t follow this strategy, with the exception of apple, is because they only control the device part and have very little control over Android platform (controlled by Google) or app store (again influenced by Google).
On the flip side, Kindle Fire isn’t proper Android tablet. It is a forked version which means, whatever updates Google does will not make it to the Fire. It will Amazon’s prerogative to get the updates. Even the Android Market is out of bounds on the Kindle Fire. What really is unexplainable is the absence of HSPA capabilities on the tablet. Is it cost? For a mobile device which is heavily dependent on anytime available cloud service, not having a innate mobile connection capability is befuddling. And then there is the lack of Camera? Surely That wasn’t a huge investment that Amazon opted out of. It was hygiene.
Kindle Fire has shown us that a successful tablet launch isn’t all about the greatest hardware. It’s the apps and the ecosystem. Without which the brightest of the tablets are destined to fail. And don’t make the mistake of considering this a success for Android tablets. Because it is not. This is a tablet which only an Amazon could have pulled of. In fact Kindle Fire would be a nemesis of Android tablets. Now they have to compete with both iPad and Kindle Fire – one at the top end and one and the lower end of the spectrum.
Amazon has done a brilliant job of picking its niche and playing to its strength – content: gaming, video, music or eBooks and build an ecosystem around it and then start selling. That in essence is the purpose and motto of tablets- Tablet happens to be a conduit to digital consumption. And Amazon has seems to have hit the nail quite on its head.