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by phaus
5287 days ago
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Most people these days don't want an MP3 player, they want a tablet. Many people also look at the iPad and think "I could buy a damn good laptop that suits my purposes for $500, why would I pay $500 for an iPad?" At the same time, these people still wanted a tablet, they just refuse to pay so much money for one. Basically, the market demands a cheaper tablets. Unfortunately for consumers the average $500 tablet contains about $300 worth of parts and labor. This means that in order to meet the demand, sacrifices must be made. Because most people would rather have a $200 tablet than no tablet at all, the Kindle Fire was born. Like it or not, the Kindle Fire represents the most advanced hardware you can get at that price. While it has its shortcomings, the device is well built and reasonably powerful. The software, on the other hand, is a completely different issue. I think that Amazon shouldn't have tried to reinvent the wheel. Grid style interfaces are pretty much perfect so I don't understand why they thought they could do better. While I don't agree that the software experience is terrible, I do hope that they fix the responsiveness issues. |
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It is undoubtable that there is a market for an iPad-like device that is cheaper than the iPad. As you note, such a thing isn't possible, which brings us to the Kindle fire. It is much cheaper, but it is cheaper in part because it is less "powerful," in part because the hardware is less "refined," but most of the reason it is cheaper comes down to the fact that it is smaller and sold for a loss. That it is smaller makes it, on the one hand, more portable, but on the other hand, less good for many types of reading and interaction.
How will people feel about those tradeoffs. You seem to think that a lot of people will find them compelling because, well, why? Because of price? Price is clearly not the only consideration for people, as the iPod's success demonstrates. Portability? The iPod Touch isn't just a music player, and at least part of the market understands that already, as Apple will likely sell ~7M this quarter. It is more portable than the Kindle fire, and used for many of the same tasks. Taking both price and portability into account leads one to look at another alternative: the smartphone the consumer either already has, or is likely to acquire in the next six months.
People were faced with a similar choice a few years ago. Should they buy a netbook, or a "real" laptop. Netbooks sold well, for a little while. Some people loved them, others wanted to love them, but found their compromises too limiting. I borrowed from work, but it ended up just being a curiosity, and when I got an iPad, I realized it was better for both reading, because I could rotate the screen, and writing, because the on-screen keyboard could compensate for errors introduced by its small size in a way the netbook's keyboard could not. The netbook market is now in decline, while the market for the iPad seems to exceed Apple's ability to supply them.
I don't pretend to know how this will turn out, other than to guess that Apple will continue to sell a lot of iPad's at a healthy profit. I also expect that Amazon will sell a healthy number of Kindle Fires, and its successors. Further, I expect that the gap between the capabilities of the Kindle Fire and the iPad will grow for the foreseeable future, as Amazon "spends" most advances in technology to lower costs, and selling prices, while Apple uses most to drive upgrades and maintain margins.