The Kindle Paperwhite is a big step forward for its whole product line. It provides a way for the user to read a book in a dark room without providing their own external light or straining their eyes. That’s something people have been hoping for out of eReaders since the day they started hitting shelves. It’s probably to be expected that the response has been enthusiastic. Even Amazon appears to be surprised by how enthusiastic people are getting, though.
While it’s only the beginning of November, we have already seen Kindle Paperwhite shipping dates slip back twice. First they were pushed back to the beginning of December and now as I’m writing this they are set for the week of December 17th.
The most popular reading device on the market experienced such a surge of consumer interest that Amazon, the world’s largest online retailer and producer of the previous millions of Kindles sold, was taken by surprise and left unable to ship promptly. That’s good news for fans of the Kindle and great news for eReaders in general, somewhat putting to rest the recurring speculation that it’s a market on the way out due to competition from tablets.
Unfortunately, it also calls into question Amazon’s ability to meet holiday sales demands. While their track record indicates that there’s a good chance many of those orders will ship well before the 17th of December, that date wouldn’t be on display if they could guarantee things sooner. If we’re already pushing orders back until a week before Christmas with seven weeks to go before the holiday, Amazon will have to be producing to exceed current high demand levels. Nobody really believes that demand will drop abruptly before the end of the year at this point.
A month is a long time to get production sped up. Maybe it’s premature to be talking about this. The fact that the orders put in today are being set back so far is strange, though. If you’re hoping to make the new Kindle a big stocking stuffer for your family and friends, it might be best to get a jump on shopping. At this point I think the best we can hope for is last minute deliveries and nobody likes gambling on FedEx and UPS being prompt at that time of year.
Going on now through the end of June 8th, Amazon is offering a $20 discount on any Kindle Fire HD, Kindle Fire HD 8.9”, or Kindle Fire HD 8.9” 4G if you remember to use the promo code “DADSFIRE” when you check out. Supplies will probably hold out through the end, but you might want to get in early if you’re interested.
There are a few things to keep in mind when you take advantage of this offer.
The most important is probably that each of these models includes Special Offers from Amazon and its affiliates. These can be removed, but it requires a $15 fee to be paid in addition to the purchase price.
Not a huge problem, but it’s worth being aware of since this is a sale centered on a gift giving holiday. To be fair, the only time you’re likely to notice the ads is when you’re first turning on your tablet. They mainly take up the lock screen.
It’s also important to note that none of the Kindle Fire HD options involved in this sale come with their own wall charger. They will instead have a Micro USB cord to connect to any convenient computer. If you have a phone charger with a removable USB cord, chances are good that you can simply plug your Kindle into that using the included cord. Amazon doesn’t recommend that, but they’re selling independent wall plugs for $20 apiece so they might be biased.
The hardest part of this deal is really just deciding which model is the right one. They are all fine devices, but they excel in different ways.
The Kindle Fire HD is the obvious choice in terms of price. $179 for the 16GB model is a great deal. You get a highly portable tablet with a great screen and some of the best sound available for the best price anywhere.
Of course, the Kindle Fire HD 8.9” is even better in its own ways. At just $279 you’ll be able to pick up a significantly larger tablet. Watching video on the larger model is much more pleasant, even if it means that you’re not going to be fitting it into even the largest pockets. The sound is also much improved here since the speakers are able to sit even further apart.
The Kindle Fire HD 8.9” 4G is basically the same thing. It’s a lot more expensive at $379, though. Really this should only be considered if you’re giving it to somebody who travels outside the range of wireless networks on a regular basis. The extra $100 won’t bring nearly as much benefit as you would think to most people.
While you’re shopping for Father’s Day, keep in mind that the Kindle is only as good as its media. There are all sorts of books that are free or cheap enough to be easy to include with the tablet itself. The app selection over at Amazon is also quite a bit more impressive than it used to be. It’s easy to make a good gift great with just a little effort.
Every year Black Friday sales get more hyped and involve more ridiculous deals. In some cases that’s a bad thing, especially when it involves camping outside stores for silly amounts of time to get a chance at one of the only two units available in a particular sale. In many others it’s just a great time to save some money.
Since we know that a sale is on the way let’s take a look at what to expect as far as discounts this week.
According to Buyer’s Review, we can expect the following deals in brick & mortal stores this Friday:
- Best Buy: Amazon Kindle Fire – $159.99 bundled with free $30 Best Buy Gift Card
- Office Depot: Amazon Kindle Fire – $159.99 bundled with $25 Visa Card
- Staples: Amazon Kindle Fire – $159, bundled with $20 Staples Gift Card
- Office Max: Amazon Kindle Fire – $159
- Best Buy: 16GB Amazon Kindle Fire HD – $199.99 free $30 Best Buy Gift Card included
- Office Max: 16GB Amazon Kindle Fire HD – $199, bundled with $25 Office Max Gift Card
- Staples: 16GB Amazon Kindle Fire HD – $199, bundled with $20 Staples Gift Card
- Staples: 32GB Amazon Kindle Fire HD – $249, bundled with $20 Staples Gift Card
We do have every reason to believe that Amazon will use this opportunity to further promote the Kindle line directly through their own storefront as well, though.
Sadly, we’re not going to be seeing a sale on the Kindle Paperwhite. The eReader side of things has proven so popular since the Paperwhite was released that an order today will take over a month to get to its destination, just barely making it in time for Christmas if you spring for 2-day shipping. In a matter of days it will likely be impossible to order a Kindle Paperwhite and have it before 2013.
We will certainly be seeing this sale day used as an opportunity to promote the Kindle Fire and Kindle Fire HD, however. An effort was clearly made to get the Kindle Fire HD 8.9” out before Black Friday, which indicates that the larger tablet will be a part of the promotion as well.
Looking at the store offers above, nobody is actually discounting the Kindle Fires themselves. All that is being added is a promo gift card. Given all the blowback Amazon has been getting from these same retailers about showrooming, I expect that the online deal will go a bit further. How much further is difficult to predict, but 10-20% off the price would create a huge surge of interest.
Remember that Amazon is using the Kindle Fire as a cheap option for content sales. They’re not making much on the devices themselves. As such I don’t think we can expect to see a $99 Kindle Fire, even using refurbished 1st Gen models. Since recent teardowns point to there being a bit more profit than the earlier generation allowed for in a single unit, however, they have some leeway.
I know that I’ll be watching for a $160 Kindle Fire HD and I would be surprised if I don’t see one by the end of the week.
As the rumors grew more intense and details began to leak from production line sources about the reality of Apple’s new device, it became fairly common to see “hold off on any purchases until the iPad Mini is ready” posted as advice. There is even reason to believe that many people took that advice, it turns out. Amazon put out a statement recently indicating that the 24rd of October (One day after Apple’s iPad Mini launch event) was “the $199 Kindle Fire HD‘s biggest day of sales since launch”.
Some of the lack of interest in the iPad Mini has to come from its shockingly high price. At $329 for the basic unit it is hard to compete with the $199 Kindle Fire HD in a market oriented toward people wanting to spend less for their tablet. That extra $130 is a huge step above the prices of 7” tablets that Apple has openly shown they intend to compete with.
More importantly, the Kindle Fire HD has a superior display. Now display isn’t everything, but it’s a lot. Apple has largely maintained their advantage in tablets by offering some of the best visual performance money can buy. A tablet, like a smartphone, is basically a handheld screen; nothing could be more apparent as a selling point. Amazon and Google have had to price their tablets at cost in order to compete with the iPad up until now, but with better prices AND better visuals the competition is more than weighted against Apple for once.
The spec comparisons largely go in this direction. Apple cut so much out of their device that just about all it has going for it is the slightly larger screen size (7.9” vs 7”) and the name “iPad”.
It’s possible that the iOS ecosystem will overcome these deficits. It certainly will be the biggest factor in driving sales. As more and more developers optimize their apps for the iPad 3’s A5X processor and the iPad 4’s A6X processor, however, people using the iPad Mini’s A5 processor might find their experience increasingly lacking. Anecdotes of iPhone 4 owners unhappy with the problems created by iOS 6 performance are common enough to make this particularly important. We’re talking about a device using roughly the same technology as the iPad 2 at a time when the iPad 4 is headlining.
There is still every reason for Amazon to be concerned about their chances in the larger tablet market. The 4th Generation iPad was updated to compete with the sort of powerful Windows 8 tablets beginning to hit the market and it is hard to imagine that even the $200 price difference in favor of the Kindle Fire HD 8.9” will be enough to drive sales in the face of those competitors unless Amazon does some serious expansion of their content ecosystem before the November 20th release date.
In terms of smaller tablets, it’s fair to say that the big names to watch right now are Google, Amazon, and maybe Barnes & Noble. Apple has priced their option right out of the running, given what it’s made of. As much as I like the Kindle Fire, it would have been great to get some even more intense competition to push things forward. It’s a disappointment that Apple didn’t come through here.
People have generally assumed that Amazon was subsidizing the Kindle Fire to some degree. Analysts have estimated that the cost of materials and manufacturing was roughly equal to the asking price and when the first Kindle Fire was launched it was suspected that Amazon could be losing as much as $15 per device to keep the costs down.
When the first Kindle eReader was released, Amazon’s position was that the hardware had to justify its existence by providing profits separate from the digital content sales it encouraged. With the frequent price drops that have occurred in the past few years, that’s obviously harder to stick to. The Kindle was first priced at $399 and sold out in a matter of hours. Now you can get a basic Kindle for just $69, so it’s hard to imagine the money coming in at the same rate.
The new position makes more sense given Amazon’s digital content ecosystem. Bezos has come out and said, for the first time, “We sell the hardware at our cost, so it is break-even on the hardware.” It isn’t a surprise and it certainly isn’t going to upset the status quo, but the confirmation of even fairly obvious suppositions breaks the secretive pattern that generally surrounds Amazon’s hardware business.
This is a convenient way to highlight the differences in sales philosophy between major competitors at a time when Android tablets are drawing roughly equivalent in both price and performance while Apple is rumored to be releasing a smaller version of the iPad before the holidays.
Apple, for example, is not known for releasing any hardware they can’t make at least a 40% profit from. This is the biggest point against the constant rumors of iPad Mini development. The only reason it’s becoming likely that Apple will release a smaller iPad at this point is the possibility of being shut out of a growing market. Even then we can expect them to be getting significant return on each sale. They’re not a company that’s willing to settle for the 30% cut they get from every sale of associated content.
Google, on the other hand, sells their Nexus 7 at cost with the expectation of a different return. Yes they have a return from their Google Play sales, but the real money is in information acquisition. Android is available for free to anybody who wants to use it because unless significant effort is made to avoid it, Android ties people into the Google system. That means more marketing data and more potential for advertising revenue.
Amazon’s course, hoping that cheap devices will result in such a significant increase in sales that it will be worth the initial investment so long as no money is actually being lost on the hardware itself, may be the least obviously profitable of these. Their experience and expertise when it comes to suggested sales and media serving make it totally believable that the Kindle encourages people to read four times as much as they normally would, but it’s not something that many other companies could hope to pull off.
We don’t have any real way of obtaining solid sales numbers from Amazon with regard to the Kindle line. They simply don’t choose to make that information public. Still, analysts are generally able to make decent guesses on how the devices are doing and where they stand with regard to the competition. According to Cowen analyst Kevin Kopelman, things are not looking up.
Kopelman, who had previously estimated that sales of the Kindle Fire tablet in 2012 would hit approximately 14 million units, has lowered his estimates to 12 million. He calls his previous numbers “unrealistic” in the wake of Google’s strong competition. Along with this revision, the Cowen analyst has revised his expected growth of the eReader side of the Kindle line from 30% to 3%. Factors such as Amazon’s focus on pushing the Kindle Fire to the exclusion of everything else and the long wait in getting a front-lit eReader to customers are cited as important considerations.
This may change depending on consumer reactions to the anticipated Kindle Fire update, of course. We don’t have any real information yet and it has to be assumed that Kopelman is similarly in the dark regarding the specifics of the new design. This didn’t stop him from mentioning the rumored iPad Mini in his analysis as a source of competition, but even imaginary Apple products often require special treatment at the moment.
The idea that the Kindle Fire will be completely wiped out by its Nexus 7 competition is far fetched at best. If Amazon never released a hardware update to the current model, that might be possible. As it stands, however, there is every reason to believe that significantly more is being done to make owning the next generation of Kindle Fire even better than owning the current one.
Add into that the benefits of the tablet’s integration with Amazon services and you have a recipe for ongoing success. To be fair, Kopelman’s report doesn’t disagree with this. He simply indicates that another 7” Android tablet is taking up consumer attention. That is going to happen. Will Amazon always be the best selling brand in small tablet design? Probably not, given their interest in creating devices for fairly narrow use cases.
Take this for what it is. Amazon will still be doing just fine with their tablet sales, they just finally have some impressive competition at the same price point. The Nexus 7 could be the Kindle Fire’s Nook. Competition always brings out the best in situations like this. Short of somebody else coming in and completely destroying the budget tablet market, which is unlikely in the case of either Apple or Microsoft despite the impending release of Windows 8, Amazon is going to be invested in things here for the indefinite future.
That means more Kindle Fire sales, more features, and more reasons for customers to be interested. This is a company known for its customer satisfaction, which makes it especially unlikely that they’ll drop the ball on a major product push like this.
Recent data out of ChangeWave Research indicates that the Kindle Fire is still idling at a much lower level of consumer interest than was the case in the fourth quarter of last year. Obviously nobody expected the rate to jump back up to as high as it was immediately after the holiday release of a much anticipated product, but the fact that there has been no noticeable change since the beginning of this year is being taken to mean that the Kindle Fire is essentially dead in the water.
ChangeWave Data (as seen on the right) puts the interest in Kindle Fire purchases among potential customers at about 8%. This compares less than favorably to the iPad’s 73%. I don’t think it is fair to say that this comparison should be made given that they serve completely different customer needs, but let’s take this for what it is.
The Kindle Fire is still running ahead of all other Android devices by a fair margin. Even in the limited information we get from this ChangeWave survey, interest appears to be at least 30% higher for the Amazon product compared to its closest non-iPad competition. In that respect, it is doing quite well. This doesn’t mean that there are great times in store for the future of the product, however.
The biggest issue right now seems to be the fact that Android is failing to match up with the competition. The best sellers are the Kindle Fire, which goes a long way to distance itself from Android, and the Samsung Galaxy Tab, which appears to be considered as one unit in the publicly available information of this report despite actually being a line of four separate products. Nobody else stands out.
I would predict that tablet customers get even more cautious in the months to come. We’re still waiting on an official announcement about the Kindle Fire 2. The release of Windows 8 tablets into the market is going to upset things in a way that nobody can quite predict yet. Even Apple might do something unexpected if the incredibly far-fetched iPad Mini ever actually appears. About the only company that customers can be completely sure of ongoing support from right now is Apple and even there it is hard to be certain that you’ll be making the best use of your money.
In the short term, I expect the Kindle Fire to become more of a niche product. It is a media consumption tablet rather than a fully functional computing device. You can’t reasonable replace even a small computer with it like you can an iPad. This doesn’t make it any less useful, but customers are now realizing that there are specific reasons to get a Kindle Fire and that you can’t expect it to function as an iPad competitor. It was never really meant to.
In the long term we have to wait and see where Amazon goes with the next Kindle Fire. If the reports of a larger, more powerful device are true then perhaps they will be trying for a serious PC replacement. It might not be the best time to be marketing something like that against all the new Windows 8 PCs, given how well Windows 8 is said to perform on a touchscreen device, but there is the chance that Amazon’s forking of Android will be sufficient to generate their own unique category in customer perception.
Even if they had no prayer of ever taking majority control of the tablet market, and realistically I don’t think anybody believes they have a prayer of doing so, Amazon isn’t about to drop the product line. It is still gaining popularity, however slowly. Media is still selling through it more steadily than through any other Android device. However much Kindle Fire sales numbers might not match up to holiday interest, that’s only part of what matters when it comes to success.
It wasn’t all that long ago when UK Bookseller Waterstones was bragging that they had their own eReader in the works that was going to be a dramatic improvement over the Kindle line. While I think it is safe to say that the failure of such an eReader to appear is unsurprising, the fact that the news of plans being changed comes along with the announcement of a partnership with Amazon for selling the Kindle is rather impressive.
In keeping with a redesign of the stores themselves, Waterstones customers can expect to see dedicated areas of the outlets set aside for digital reading purposes. Presumably this will include easy cafe access and free WiFi. Other than the fact that Waterstones will now be able to jump into eReading in some small way, however, it is hard to say exactly what their plan of attack will be here.
Details, aside from the abandonment of previously reported Waterstones efforts at eReader design, have not yet been made available to the public. They will not be available, in fact, until this fall. Considering that James Daunt, the guy in charge of Waterstones at the moment, declared just months ago that Amazon “never struck [him] as being a sort of business in the consumer interest” and called the online retailer “a ruthless, money-making devil”, it must have been a fairly impressive deal.
We know that Waterstones will not be selling the Kindle hardware any cheaper than Amazon’s own store or any of their other partners. Not only was that obvious anyway, Daunt himself confirmed that it would not be happening. Everything they pull off will have to be related to the sales of the media. This opens up a whole field of speculation.
It is definitely possible that this will be an opportunity to finally bring together hardcover book sales and digital reading. Customers have long asked for an opportunity to acquire their eBooks at a discount when they already own the physical copy and if Waterstones was to start selling bundles priced roughly equal to the cost of a hardcover book it would give them a major edge in marketing alone.
This would also be a good opportunity for Amazon to test out some of Barnes & Noble’s tricks. Using the Special Offers aspect of the Kindle to display coupons and other such deals any time a user is connected via the Waterstones WiFi would be a start, for example. It wouldn’t hurt to put together the same sort of free access to entire eBooks that Nook owners get in B&N outlets, but that might be stretching things a bit.
Without knowing more about how the partnership is structured we can’t say anything for sure. This doesn’t seem like the smartest move for a major Brick & Mortar chain, though. Amazon is many things, often many positive things, but kind to physical outlets would not be one of them. The whole arrangement smacks of a last ditch effort to test out possible ways to keep physical book stores from losing traction in the face of the overwhelmingly popular Kindle. In that respect, as a fan of the bookstore, I can only offer my sincere hope that they succeed in finding one.
We are well aware that Amazon has come to completely dominate the Android tablet market with their Kindle Fire and that this has been accomplished in an amazingly short amount of time. Unfortunately for Amazon, market research firm IDC has released a report of the Android tablet market shrinking at a noticeably higher rate than the tablet market in general. This could prove problematic as a trend, but the situation may be even more complicated than that.
IDC’s report indicates a bit of a slump as we come into 2012. Total shipments for tablets are coming in below expectations, especially compared to the previous quarter’s record breaking sales numbers. Apple’s new shipments are up to 68% of tablet sales compared to just 54% at the end of 2011, indicating that Android has lost a bit of traction despite the lack of reason to get excited about the iPad 3. Much of this, according to IDC, may be attributed to Apple’s keeping the iPad 2 around as a cheaper alternative to their newest offerings.
Where many are taking this as a death sentence for the Kindle Fire and Amazon’s tablet prospects more generally, there have also been issues raised with IDC’s research methods. Namely, they are making their determinations based off of total shipments from factories to warehouses and stores. This is itself a problematic point to raise since it calls into question IDC’s analysis of Q4 2011, but does make sense. There were obviously going to be plenty of retailers that still has stock left over from the holiday season, so maybe it would be smart to account for that. Even so, sales almost certainly dipped compared to the iPad.
Looking forward to the year ahead, this doesn’t start Amazon off on a high note. The Kindle Fire was just their first generation product, however, and we are expecting the next generation in a matter of months. It will likely be larger, or at least have the option of being larger, and will definitely be more powerful. Pricing can be expected to remain highly competitive. This is certain to lead to a resurgent interest in the Android segment of the market even leaving aside such strong offerings as the new Samsung Galaxy Tab 2 and Google’s anticipated budget tablet.
Larger screen or not, it is hard to say in advance if Amazon has a Kindle Fire 2 vs iPad 3 comparison in mind. It is even harder to tell if this would be a smart move at this time. Both Android and iOS sales may be hit hard toward the end of this year with the introduction of Windows 8 tablets to the competition. Since these will certainly be all-purpose tablets along the lines of the iPad, it might be more effective for Amazon to continue building the Kindle Fire’s niche as a consumption device that serves specific needs at a lower price than the alternatives.
The bottom line is that right this minute it is doubtful Amazon has anything to be worried about with regard to the Kindle Fire. Things are going well even if there’s a bit of a slump right now. The big challenge will come later this year when Android is hit from both sides by iOS and Windows 8 and consumers are left to decide which will be their long-term choice.
Target was among the first major Brick & Mortar retailers to begin offering the Kindle to its customers. For many people there was a period when this was literally the only place they could try out an eReader in person rather than blindly trusting that it would meet their needs. Now, with the Kindle everywhere and Amazon widely demonized as the bane of all storefront business, Target has decided that it would be best to say goodbye to the Kindle and Amazon for good.
Target Corp manages over 1,700 stores as well as a major retail website of its own. The company become a huge name recently by beginning to pass Walmart as the most inexpensive shopping location available for a variety of goods. While overall still slightly behind Walmart in general, it was reported last year that Target had begun to reliably offer less expensive grocery and household goods to its customers.
This is relevant to the company’s ending their Kindle partnership because the reason cited for the move was an increasingly popular practice called “showrooming”. Showrooming is what retailers have come to call the act of window shopping in a local store while comparing prices with online outlets like Amazon.com on a smartphone. It can result in impressive savings for customers, but big retailers complain that it amounts to little more than exploitation.
Amazon is tied into this practice fairly deeply. In addition to offering the widest selection of inexpensive goods on the internet and a subscription-based service that allows free two day shipping to reduce wait times, the internet giant has even created smartphone apps to make the act of showrooming as painless as possible. Using their smartphone apps, customers can simply scan the barcode of whatever they are interested in and be taken to the Amazon.com page selling it.
While it is definitely understandable that Target would be upset by the practice and with Amazon in general, it is hard to imagine this as a particularly productive move on their parts. While Target undoubtedly earned little money off of individual Kindle device sales, the Kindle line was their bestselling tablet/eReader this past holiday season and it is almost impossible to actually use a Kindle for showrooming given that even the Kindle Fire lacks a camera and cellular connectivity. At best this is a punitive move rather than an obviously productive one.
Interestingly, this plan does coincide with the decision to add internal Apple shops to a number of storefronts over the coming year. The Kindle and all related accessories might be in the process of disappearing from stores, but they have stated that “We will continue to offer our guests a full assortment of e-readers and supporting accessories.” Presumably that means the Nook will be sticking around. If you are in the market for a Kindle, you can still find them at any number of retailers including Best Buy, Walmart, and Staples.