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Amazon founder and CEO Jeff Bezos introduced the newest Kindle yesterday, a $199 tablet computer that is positioned as a cheaper alternative to Apple’s wildly successful but more expensive iPad.

“Unlike a wave of other tablets that have emerged hopefully only to flop, such as the Hewlett-Packard Co. TouchPad, the Motorola Mobility Holdings Inc. Xoom, and the Research in Motion Ltd. PlayBook,” Bloomberg BusinessWeek writes, “the Kindle Fire has a good shot at turning the newest theater of war in high-tech into a two-tablet battle.”

“What we are doing is offering premium products at non-premium prices,” Bezos tells Bloomberg BusinessWeek. Other tablet contenders, he says, “have not been competitive on price” and “have just sold a piece of hardware. We don’t think of the Kindle Fire as a tablet. We think of it as a service.”

The Kindle Fire has a glossy 7-inch color touch screen and a dual-core processor, and the New York Times reports that “Amazon is counting on the its vast online warehouse of more than 18 million e-books, songs, movies and television shows, as well as access to a selection of Android applications, to help it beat competitors like the iPad and the Nook from Barnes & Noble. Previous Kindles were only e-book readers with black-and-white screens.

“The access to content is important as Amazon transforms its business into a digital retailer and responds to consumer demands for mobile devices, lest it winds up in a retail graveyard like Borders, a former peer.”

Amazon has begun taking orders and will begin shipping the Fire on November 15; the Kindle Fire will sell for $199 while the cheapest iPad sells for $499; as the writes, “Amazon can afford to charge less because it hopes to make up the difference by selling books, movies and popular television shows. Customers may also be more inclined to pay $79 a year for Amazon Prime, which gives them access to Amazon’s movie streaming service and free shipping, which in turn, encourages more shopping at Amazon.com.”

Compared to the iPad, Bloomberg BusinessWeek writes, “The stripped-down Fire is more of a sit-back-on-the-sofa-and-shop device. It crystallizes the difference between Apple, which tends to keep prices -- and profit margins -- high, and Amazon, which likes to start low and drive lower in an effort to knee-cap the competition. The tablet is symbolic of Amazon’s ability to adapt and reluctance to cede the future to anyone. If the Fire and its inevitable sequels are successful, they will add even more might to one of the fastest-growing retail operations the world has ever seen.”
KC's View:
There are tons of implications here, especially because the growth of tablets in general seems to be positive for online retailers.

What intrigues me about Amazon - and Apple - is the way in which both the Fire and the iPad really are about content consumption, and how both companies have their own stores through which they provide that content. The Jeff Bezos comment about the Fire not being a device but a system is illuminating - it suggests that the successful 21st century retailer has to think about more than just the transaction, but about the broader implications of a long-term relationship with the consumer that is built on information and accessibility.