Amazon debuts new tablets, no matter what Tim Cook thinks
Apple CEO Tim Cook doesn’t think of Amazon.com as a consumer product company. He said so in an interview with Charlie Rose recently. But maybe Jeff Bezos has other ideas. Yesterday, Amazon announced the launch of new Fire tablets, including one designed for kids, with all the accompanying hyperbole associated with big consumer technology debuts.
Amazon’s new Fire HDX 8.9 tablet, according to the company, is "startlingly light" and comes with a more powerful processor and a graphics engine that is 70 percent faster than the previous model. The HDX display including Dynamic Light Control said to "makes the pages of a book more closely resemble a real piece of paper in different lighting conditions." The pre-order price of the Fire HDX is $379.
On the other end of the pricing spectrum is the new Fire HD, billed by Amazon as "the most powerful tablet under $100." The Fire HD comes in either 6" ($99) or 7" ($139) models with five different color choices.
The Fire HD Kids Edition, according to Amazon, is "the first tablet built from the ground up for kids." The device comes in two sizes, including a 6" tablet for $149 and a 7" model for $189.
"Fire HD Kids Edition is a real tablet, not a toy," said Peter Larsen, vice president, Amazon Devices, in a statement. "Kids break things, so we added a two-year, no-questions-asked, worry-free guarantee. Plus, you’ll never be surprised by a bill — it comes with a year of FreeTime Unlimited, which includes over 5,000 books, movies, TV episodes, educational apps, and games at no additional cost."
Amazon is undoubtedly looking for big things from its new Fire tablets (it also introduced two new Kindle e-readers) after stumbling out of the gate with its Fire Phone. The company dropped the price for its first foray into the smartphone category from $199 with a two-year AT&T contract to 99 cents within two months of its rollout.
All of Amazon’s new devices are currently available for pre-order and will begin shipping next month.
- Introducing the All-New Fire HDX — Higher Performance, Exclusive New Audio, the Fastest Wi-Fi, and Still Startlingly Light with a Stunning HDX Display – Amazon.com
- Introducing the All-New Fire HD — The Most Powerful Tablet Under $100 – Amazon.com
- Introducing Fire HD Kids Edition — The Kids Tablet That Has it All, Including the First-Ever 2-Year Worry-Free Guarantee – Amazon.com
- Apple CEO Tim Cook digs at Amazon: ‘They’re not a product company’ – GeekWire
- Amazon unveils new Fire tablets, Kindle e-readers – USA Today
- Amazon drops price as smartphone fails to set the world on fire – RetailWire
Discussion Questions
Is Amazon on the right track to gain market share of the tablet category with its new Fire devices? Which of the three new tablet devices do you think has the greatest potential to boost Amazon’s business?
The line between tablets and smartphones is getting blurrier every day, hence the term “phablet.” The size difference between the largest smartphones (like the Samsung Galaxy and the new iPhone 6+) and the smallest tablets (like the iPad Mini) is causing the tablet market to mature, especially if a consumer doesn’t want to pay extra for connectivity other than WiFi.
I don’t know how much market share is held by Amazon but it’s diving deeper into a low-growth category. (And the Fire Phone experience ought to be humbling, assuming Amazon is capable of humility.) I understand that Amazon needed to expand beyond the e-reader category as its footprint grew way beyond books, but I’m not sure a “me too” product will meet its goals.
Amazon is competing almost solely on price, a formula that will generate some sales but won’t vault them into the realm of Apple and Samsung. There is little innovation here. And even Amazon seemed to acknowledge this by the way they made the announcement which Bloomberg described as happening in a quiet setting at a press-only event.
The Amazon phone was a bust. Kindles have sold well, but are not viewed by most consumers as competitive to iPads. Amazon needs more innovation or it will be reduced to competing solely on price, which is a slippery slope at best.
Obviously Apple has an incentive to play this down, but Cook is still right. Amazon has a huge and powerful business, but not as a consumer products company. They will have to sell a lot more before they become a real player, and there isn’t much evidence they will make that leap. On the other hand, it isn’t clear to me that success in selling tablets is essential to Amazon’s future business. Seems to me that driving a significant portion of the future of online retail is a big opportunity whether this succeeds or fails.
It seems that in the tablet market demand is dropping, and I also heard last week that the Amazon phone was not doing that well. With the new iPhones and more hardware vendors tuning up their tablet/PC strategies this seems like the wrong track for Amazon.
I estimate that this move is a holiday-timed program with strong focus on the kids tablet—it is a new toy for the holidays and they can influence Santa.
Someday Jeff needs to decide what he wants Amazon to be—a retail-like site, a hardware sales site, a media services business, etc.
Apple owns the tablet space and soon the larger phone space. Amazon vs. Apple—Hmmm. The winner would be? Easy guess.
Note—Alibaba is coming at Amazon’s space at lighting speed, so I suggest that they focus on the competitive areas vs. spreading out their focus.
A look at the return on investment with closeouts and shipping increases factored in may be what is being discussed here. Not that FIRE is a total loser, but borderline profitability in a product mix that uses this percent of company capital can become a fatal mistake real quick. Something Bezos is willing to risk against the recommendation of the slave population and its leadership.
Amazon will be taken a lot more seriously as device competitors if/when they give the devices away as part of the Prime subscription program. That could be pretty disruptive.
Yes. However, Amazon keeps ignoring its real strength. To really appeal to their target market with these devices, they need to include a value add that other manufacturers cannot…like a free subscription to Amazon prime with each Amazon Fire purchased.
Just one simple thought here. Take a look at how Amazon did with their smartphone. Do they really want to keep trying to get into the consumer products business?
Hey Tim, if Amazon isn’t a product company, then you’re not a retailer, right? Oh wait, you ARE! So maybe they ARE as well.
Amazon has been reinventing the rules of retailing and removing boundaries all along. Unlimited inventory, service marketer beyond retail (streaming media…), offering branded products (Kindle). Amazon is not only one of the biggest and most revolutionary retailers in the world, they are also one of the most powerful media companies in the world…a fact and asset they are just now waking up to.
Their reach is not far behind Facebook. I believe there are more product related searches on Amazon than Google (and now they are moving into the display ad business). There might be more product related social media (reviews) on Amazon than Facebook and Twitter. They might have as many cross-device log-ins as anyone.
With assets like that, they can be a product marketer if they want to. Tim Cook probably knows this and what he thinks and says are probably two different things.
The Apple iPad was introduced a mere 4 1/2 years ago and it arguably has changed computing and consuming forever. If you consider that everyone who wants a tablet already has a tablet, the market for tablets has matured rather quickly. If Amazon can pick up the pieces left on the consumer table by Apple and not already consumed by Microsoft and Samsung, it is still a significant business.
The question remains: Is it a big enough business for Amazon? It surely will not be an iPad killer. How large is the market for juvenile tablets? I routinely see them at closeout king Big Lots or on display at Best Buy, but is there any sales volume to be had? Who among you would pay nearly $400 for a toy for your kid? I would sooner buy a good rugged iPad frame for my old iPad, give it to my kid and buy a new iPad Air for myself.
If you look at Amazon, there are tens of thousands of products they sell which individually do not account for very much sales volume at all. I would like to see the data on the number of items Amazon sells and the ranking according to units and dollar volume, but I have more important things to do.
Amazon has a powerful strategy, since they can basically give the tablets away and make money on the incremental purchases at amazon.com.
To the extent that these tablets reinforce the benefits of Amazon Prime as well, they continue to keep customers “extra sticky.”
The lower-priced options will do the best, since that end of the market is sparsely populated by credible alternatives.
The tablet market is so congested right now, it is really difficult to tell anything. However, just a simple observation of my extended family will reveal interesting results. Everyone owns an iPad, iPad Mini or iPod. I am talking about children between four and 11. Roughly 2.2 per household.
Not one own an Amazon device. The sample set is small, but considering these devices weren’t even on the radar when a purchasing decision was to be made, I’m going to have to agree with Tim Cook.
Besides, my daughter just wants to play with what I am using anyway, no matter what it is.