This is not the first time we’ve heard talk of a miniature iPad. In fact, I’ve detailed here on the site exactly how little sense it makes for Apple to release such a device on more than one occasion. Despite the ongoing lack of such a device from Apple, people keep declaring that it is right around the corner waiting to wipe out the Kindle Fire on a moment’s notice. For once, they might be half right.
The cost analysis I did in the past is still relatively accurate. Apple has a reputation for putting comparatively large markups on their devices. An iPad Mini that offered them minimal profits would definitely not be attractive in most cases, especially since it would inevitably eat into existing iPad sales to some extent.
Let’s assume, however, that they have found a way to cut costs significantly. The latest rumors are pointing to a seven inch tablet that lacks the Retina display Apple devices are becoming known for. It would also have comparatively little on-board storage space and other such corner cutting measures to being margins up to acceptable levels. The big question is why they would bother?
Let’s face it, there has not been a good substitute to the iPad thus far. No matter how much I love the Kindle Fire, it is a very limited device. That’s all it was ever intended to be. The Samsung Galaxy Tab is the closest anybody has come and even there, it’s hard to decide. The situation has changed recently though.
Google’s Nexus 7 tablet, and the anticipated Nexus 10 follow-up, makes a compelling argument in favor of Android as a viable tablet OS. No other Android device has managed to create such a positive general use experience for such a lot price. Apple might feel the need to respond to that somewhat.
More likely, however, would be the rise of the Windows 8 tablet. The recently previewed Surface tablet developed in-house by Microsoft is powerful, easy to use, and fairly obviously aimed at besting the iPad feature for feature. If they price it to match as well, Apple might finally be in a bit of trouble despite the large existing user base locked into their ecosystem.
The new Kindle Fire 2 might play into the equation as well, but that’s a long shot. Amazon did take the Android world by storm last year when they priced their device well below anything comparable. It is likely that this low pricing will continue and that customers will get a great value out of the next Kindle Fire as well. Even a ten inch tablet from Amazon is hardly going to trouble Apple at this point given the more serious competition that is showing up lately, though.
An iPad Mini could bite into Kindle Fire sales if it is ever released. Price and name recognition go a long way. Nothing has better name recognition than the iPad so a model priced at or below $300 would likely be a huge hit. It wouldn’t make much sense for Amazon’s device to be the reason for that sort of release, though. The Kindle Fire has never been direct competition as a general purpose tablet. It’s just a good way to get your Amazon content conveniently delivered.
The latest in an unending series of rumors about Apple’s supposedly devious plans to take everybody else out of the tablet market no matter the cost has recently popped up via iMore. Apparently the Kindle Fire is doing far too well and it will be necessary for Apple to step in and eliminate the competition before the holiday sales numbers have a chance to solidify into a real presence in the tablet market. This report indicates that the new iPad Mini will be available in October of 2012 if all goes well, along with yet another iteration of the iPhone.
Naturally, the speculation makes a number of rather impressive claims. The iPad Mini will sport a 7.85” Retina Display, for example. It will also be priced between $200 and $250. Basically it is a scaled down version of the iPad 3 that just happens to be half the price of the cheapest version of that tablet. The price drop can apparently be accounted for at least in part by the reduction of on-board storage space to 8GB.
Once again, despite how seriously this rumor is being taken at the moment by various sources, there is a major flaw in it. None of the details make sense.
The most obvious point is the pricing. In previous iPad offerings, Apple has never once accepted less than a 50% profit margin on every sale. The newest version, the iPad 3, is estimated to cost about $310 to manufacture (16GB, 4G Model). This makes it the least profitable iPad for Apple so far at an estimated 51%. Even if we assume there to be a relatively large decrease in production costs as they move from a 10” display to a 7”, there is no real way that the company could hope to get even a 25% margin out of a $200 iPad Mini. The Kindle Fire is only viable at that price because of Amazon’s heavy emphasis on media sales after the purchase.
There is also the issue of OS fragmentation. Regardless of whether the proposed device would be able to maintain the iPad’s 2048 x 1536 resolution, the decreased size would change the way that users interact with their device and therefore the way designers create their interfaces. It would introduce a new tier of apps that would have to be directly targeting the Mini. Coming into what will likely be a major competition with Microsoft’s Windows 8, Apple will not want to be dealing with a complete refresh of their store this fall.
There are plenty of other reasons that we can expect no iPad Mini. It would cannibalize iPod Touch sales. It would indicate that Apple was far more concerned about the Kindle Fire than the numbers come close to justifying. The list goes on. Basically, the chances of such a product hitting shelves is slim at best. Even if it happens, the final specs are certain to look nothing like what sites like iMore indicate unless the price is totally different from what they are expecting. The Kindle Fire will continue to be the dominant $200 tablet for a while longer and Apple will continue to be disinterested.
Over the past several weeks there has been significant speculation over the possibility of a newer, smaller iPad on the horizon that is intended to compete directly with the Kindle Fire. As much as it sounds plausible when looked at in a certain light, I just fail to see it in the end. There are a few reasons, but in the end it comes down to different audiences. For Apple to seriously put a stop to the popularity of the Kindle Fire, they would have to address Amazon on completely different terms than has previously been the case, and it is not a stretch to assume that Apple has no intention of fragmenting their product line in such a way.
The value of the Kindle Fire is precisely that it does not attempt to be a fully functional tablet. Sure, it can do a lot of what any other tablet can do, but in the end there are few competitors that fail to beat it out on paper in terms of performance. What it does do is provide a channel for Amazon’s digital services. Anything that Amazon wants to serve up to customers is immediately in front of them just a click away and always works on the first try. Everything else is just left hanging under the Apps tab to work with as best you can.
The iPad, on the other hand, is trying fairly successfully to replace the home desktop as a center for leisurely computing. Short of playing highly demanding games or manipulating images and video, there is little that Apple’s tablet is unable to take over with moderate success. You can even use it as a word processor thanks to various Bluetooth keyboards designed specifically for such a use. The iPad does serve as a conduit for digital purchases, but it is more than that. You can use it to create and manipulate various types of projects rather than simply consuming.
Yes, Apple could easily cut into Kindle Fire sales with a 7” iPad 3 priced in the $200-300 range, but it would take more than just having the hardware available. They would have to prove to customers that they could focus it entirely on convenient consumption. It is almost counter-intuitive to phrase it like that, but the focused experience is what Amazon successfully leverages in the lack of computing power and I think they would have to be beaten at the game they have helped to define.
This isn’t to say that a smaller iPad would not succeed. It would probably be huge and have a devastating effect on the emerging budget Android tablet market. Those most hit by it would be along the lines of the Samsung Galaxy Tab though, not the Kindle Fire. Until and unless Amazon goes out of their way to pick the fight in a Kindle vs iPad standoff, I think they are fairly safely entrenched for the immediate future.
We are well aware now what the big Apple announcement for January was: their new iBooks Author program. It is a program that allows for easy creation of books, most notably textbooks, for free. iBooks might have failed to kill the Kindle platform, even given the whole Agency Model collusion with publishers (the legality of which we’ll have to wait and see about), but that doesn’t mean they’re ready to give up. After some experimentation with the new program I find myself conflicted. I wanted it to be mediocre, but it’s not. And therein lies the problem.
You see, there is a bit of a problem with the program’s EULA. It won’t be a deal breaker for just anybody, but there is definitely important information to be aware of. By using the iBooks Author program, you are agreeing that not only will anything you sell be available in Apple’s eBook store but also will never never be sold for the Kindle, Nook, or any other non-Apple device.
Before going into the subtleties of the wording, and there are a few arguments with varying degrees of merit that have been made toward the harmlessness of this clause, consider that this can definitely be read as a response to the recent Amazon effort to gain author exclusivity. The only difference is that Amazon brings in authors with a chance at more money while Apple just quietly restricts their distribution rights with a clause that users not only never explicitly accept, but don’t even see unless they go out of their way.
That said, there are a few situations where I think this will be an extremely valuable thing to have. If you are planning to create and distribute your work permanently free of charge, I have yet to find a more intuitive, affordable tool for making textbooks or manuals. If your book was always intended to be marketed primarily to users of the iBooks store, this probably won’t have much of an impact on you.
Now, let’s acknowledge some ambiguities in the wording and clarify some of the many common points of contention:
Restrictions Only Apply To iBook Format: FALSE
The definition of “Work” used in the EULA clearly indicates that anything generated using the software counts. It does not matter if you export to PDF, for example.
Apple Is Stealing Author Copyrights: FALSE
Anything you create is yours from the moment you create it unless you explicitly hand over permission. What Apple is doing is telling you where you can sell it. Using iBooks Author allows them to restrict distribution of your work, but otherwise seems to offer them no rights to it.
All This Applies To Is The Formatted Product, Not The Content: AMBIGUOUS
Leaving aside the textbook for a moment and assuming we are talking about a book that is completely text based. If you want to release a Kindle version, it would seem possible to just copy the text and reformat. The wording of the EULA describes “Work” recursively as “any book or other work you generate using this software”. This can, and hopefully would be, read to mean that only the final, fully formatted output is affected, but the ambiguity is troubling.
It Is Free Software, They Have A Right To Expect A Return: TRUE-ISH
Nobody is forcing you to use this program. It is being provided free of charge by Apple and provides far greater functionality than any other free program out there for the same purposes. Most such restrictions are aimed toward restriction the active use of the software rather than restricting how a creator can manage their own work, though. Neither illegal nor unprecedented, but odd and somewhat troubling.
Not A Consumer Targeted Software Anyway: FALSE
This one comes up a lot. Despite the large number of advertisements being done involving the cooperation of such publishers as Pearson and McGraw Hill in the iBooks Textbook initiative, there has been no indication that they are contributing work under the same agreement. This is free software pointed at teachers and authors in the advertising (particularly the promo video). It has bundled templates to simplify the work, a simple drag and drop interface, and tons of automation. There is depth for those who need it, but definitely not aimed solely at experienced professional textbook publishers.
Apple Can Prevent A Finished Book From Ever Being Sold: TRUE
All that is required for a book to be covered by these restrictions is that it be a product of iBooks Author. Publication is neither automated nor guaranteed, and just because Apple turns you down does not mean that you are free to market your work through another platform or sell through your own means.
Apple Offers Better/Worse Royalties Than The Competition Anyway: FALSE
Apple is effectively offering the same cut of all sales to authors as the vast majority of authors receive when selling for the Kindle and nearly the same (within 5%) as that offered to Nook sellers.
Now, I’m not about to claim that this is the most horrible thing ever done to authors or even that it is deliberately malicious. Some have claimed that just as this is a 1.0 software, so is the EULA in early versions too and ambiguity will inevitably be removed. If so, and there was no intent to deceive or control, so be it. It is already a complicated enough process to get anything out of your eBooks that authors should be aware of what they are getting into, though. I, for one, wouldn’t want to be locked out of the Kindle platform by accident when that’s where all the readers are.
This is good software. Possibly great software. But the limitations aren’t the same as you get when publishing a Kindle Edition, where all you need to worry about is not selling things cheaper elsewhere. Under the current wording it seems to literally stop you from reaching an audience. That’s just unpleasant, and something that people need to be aware of when deciding whether or not iBooks Author is for them.
Recent reports indicate that later this month we can expect to see Apple host a press conference related to, of all things, eBooks. After news that the Kindle Fire has had a noticeable impact on iPad sales this past quarter, clearly something has to be done. This is not official as of yet, but multiple sources in positions to be aware of such plans have passed along the same information. While we have no way as of yet to know for sure where this will lead, the most common rumors seem to point to Apple’s launching of a digital self publishing platform to compete with the Kindle Direct Publishing program.
In reality, such a move on Apple’s part would be quite surprising. In addition to the fact that simply matching the competition seems to offer far less reward than the effort would be worth given that the iBooks store has failed to really take off so far anyway, Apple is already making about as much on each book sold to owners of their devices as they would be likely to make off a program competitive enough to draw in new authors. Keeping in mind the fact that anybody publishing through Amazon’s KDP program, or even Barnes & Noble’s slightly less popular PubIt, will already be available to iOS users, the only real motivation for Apple here would be to draw authors into an exclusive arrangement in some way to enhance the iBooks selection. Amazon has already begun a similar effort tied into their Kindle Owners’ Lending Library, so this would not necessarily be a shocking move, but there is little reason to suspect that Apple is desperate to suddenly push into the eBook market in a major way.
Since we can be fairly certain that whatever the announcement is about will be related to publishing in some way, however, there are a few other possibilities. Textbook rental is one of the more likely possibilities. While Amazon’s new Kindle Format 8 provides some more robust formatting options to publishers and the Kindle Fire obviously handles the demands of textbooks more easily than E INK reading devices, so far the Kindle Textbook Rental program has failed to draw much attention. Given the iPad’s larger screen and Apple’s strong presence on college campuses, it would make sense for them to jump to fill in this gap in the market before anybody else beats them to it.
It is also possible that this has something to do with the ongoing class action lawsuits against Apple and the Big 6 publishers over price fixing and the imposition of the Agency Model around the time the iPad was released. In the past month the situation has become quite a bit more intense, with the US Justice Department joining in and at least 15 ongoing suits. It would seem unlikely that the company would want to comment on an ongoing legal battle, but given claims of detailed inside information on the part of certain plaintiffs there is always the chance that preemptive spin on an anticipated settlement attempt might be in order.
The one thing everybody agrees on is that this will not be a hardware announcement. While there is still speculation with varying degrees of believability about a smaller iPad meant to compete with the Kindle Fire, that will have to wait until later. For now, it’s hard to know exactly what to expect.
It was known well ahead of the official announcement for the device ever took place that the Kindle Fire would be intended for video more than anything else. Perhaps due to that pressure and perhaps just as part of an overall trend in the market, the Nook Tablet was designed along similar lines. While this doesn’t necessarily mean much on its own, it spurred along at least one other development that might mean a great deal more attention for the Android community as a whole.
Amazon’s intent to promote their own streaming video service is clear. Their library has been growing quickly over time, including many titles being given away “free” with Amazon Prime. This is naturally something of a concern for a company like Netflix that is suddenly faced with competition from somebody as big as Amazon. Although Netflix has not commented on it, something definitely spurred them along to push forward their new tablet app upgrade for Android weeks or months ahead of iOS.
The Nook Tablet practically relies on Netflix and other streaming services to function, all the more so because Barnes & Noble currently offers nothing analogous to Amazon’s video services. They also began advertising a uniquely deep connection with Netflix immediately following the reveal. As Kindle Fire owners have likely noticed by now, the Netflix app in the Amazon App Store isn’t exactly lacking either. They went for the maximum possible audience with this update and it seems likely to take.
The implications here go beyond benefits for owners of these new 7″ tablets, however nice those are to have. This is one of the first times that the Android platform has received special attention ahead of the iOS equivalent. That sort of thing does not happen without a fair degree of confidence in the potential profitability. If the Kindle Fire alone, or even the collection group of it and all of the competing $200 tablets springing up from companies like B&N and Kobo, is considered important enough to be prioritized ahead of the market dominating iPad then it could easily be a sign that tides are changing.
Part of the bar to Android’s widespread adoption in tablets has been the fact that quality development tends to get prioritized for the competition. Whether you blame it on the fragmentation of the ecosystem due to frequent non-mandatory upgrades, lack of faith in Google’s offering as a whole, or the lack of a truly major name product to line up behind, the situation has now changed. With luck, this will build up some momentum.
While I have nothing against Apple or the iPad, some heated competition would go a long way toward not only improving their product but creating some genuinely functional alternatives. The strength of iOS that everybody else lacks isn’t the iPad’s hardware or aesthetic. Its main virtue is the functionality that primarily comes from the Apple App Store. Neither the Kindle Fire nor the Amazon App Store is a match for Apple. It isn’t likely that a single company or product will be any time soon. What it does do is get the ball rolling, so to speak.
Nobody can doubt at this point that the competition for the tablet market has just gotten serious. Apple has the iPad, which all things considered is probably the best thing on the market by a moderate margin, but now there are other options like the Kindle Fire which bring similar service for less than half the price of the cheapest Apple option. As results have shown time and time again, though, it takes more than a lower price and a set of analogous capabilities and interface options to even out the competition.
To start with, yes the Apple iPad has superior hardware and a more polished experience overall. It lags a little bit less, has a larger screen, and can go a bit longer in between charges. Not a lot, but enough to notice. It is, without hesitation, a great product that I enjoy using for just about anything besides reading. Some people can even stand to do that on it.
That said, there are some problems with the overall experience. Apple’s App Store guidelines have cut off some of their most popular content providers and forced others to accept less than ideal situations, for example. Mostly the problems are along these lines. Apple put out great hardware, but their handling of the associated use, taken as a whole, can be troublesome.
This is where it is useful to turn to the Kindle Fire as a decent example. Amazon is basically the first company to bring a functional, polished tablet to market so far that also had an App Store to make use of. Not only that, they offer pretty much everything you might want to consume right there for download should you need it. They have even pulled the media experience to the front of things to try to make transitions more fluid and experiences more cohesive.
Where Apple focuses on Apps and their use, Amazon has chosen to bring media to the front and weigh apps as no more important than anything else being offered through the device’s interface. The full functionality is there, and there are thousands of major apps available for download that will provide any kind of content you can imagine, but it isn’t the only option. Documents, Movies, Books, Music, all get their own place alongside the Apps. There isn’t even a standard Android home screen anymore.
This is where Amazon went right, in my opinion, and why they are likely to be a serious competitor. It isn’t about the lower price tag. That’s nice, of course, but it only goes so far. It’s more that the Kindle Fire places the emphasis on what it was made to do without shoving it in your face. It is made to consume certain content and will do so perfectly. To get to something that might be less polished or run a little bit less well actually takes more steps out of the way to get to, if only slightly.
They made the decision to play to the Kindle Fire‘s strengths rather than make it a general purpose device that could be everything for everybody. The Kindle vs iPad competition will come down to design philosophy more than simple processing power.
Earlier today, a TechCrunch reporter claims to have had a chance to play around with an actual working Kindle Tablet in a closely supervised situation. Much of the information he came out with isn’t exactly what we were hoping to hear when the real details started to turn up, but everything does fit the current situation pretty well and there are no glaring discrepancies. As with all unofficial reports it should probably be taken with a grain of salt, but for the time being it is probably safe to say this is our best picture of Amazon’s upcoming entry into the Tablet PC market.
Here’s what we have to work with:
- 7″ Back-lit touchscreen of some description with no hybrid options(2 finger capacitive multi-touch)
- Highly customized Android OS, possibly forked as early as Android 2.2
- No physical controls aside from the power button
- Possible single-core processor
- As little as 6GB internal storage
- WiFi Only at launch
- Expandable memory slot
- No camera
- Bundled Amazon Prime Membership
- $250 Price Tag
- Late November 2011 Release Date
Clearly the high expectations of Kindle fans will not be met in their entirety.
There is a sense that Amazon is rushing this to market, even after all this time. If a guess were required, I would say that it almost seems as if they were hoping to carry the day by using the next best thing in display technology to get the jump on everybody only to have that tech fail to manifest in time to be useful. That aside, they’re still bringing plenty to the table to make a splash.
The Nook Color has managed to carve out a space for itself by being something of a budget iPad, for all its stated eReading emphasis. Amazon can bring the same sort of value to the table, perhaps with a more impressive array of applications and support structure, and not even have to bother with the eReader facade. We have to assume at this point that they won’t make the mistake of marketing this as a Kindle eReader, whether or not it’s capable of displaying books, given the whole anti-iPad LCD commercial campaign.
The focus on cloud storage and streaming will negate the obvious problem of minimal storage space to some extent, though Amazon seems to be gambling a lot on the ubiquity of wireless networks. If the reporting article is to be believed, then the Android OS fork should be customized and optimized well beyond simply skinning Froyo and throwing out the standard Google App Marketplace, which means that it’s too early to judge anything based on that at this time. Nobody really expected Amazon to include a completely open copy of Android anyway, right?
Just because this isn’t the ideal situation that would blow the iPad out of the water without any significant contest doesn’t mean it isn’t a great step. Tablets put out by anybody but Apple have tended to fare poorly so far, as evidenced by the HP TouchPad debacle recently, but Amazon has the marketing, support, and name recognition to make it happen. I still don’t think this will end up being a direct contest with just the Nook Color for most people, unless something gets reviewed particularly poorly at release.
For those who have been paying attention, it doesn’t come as much of a shock to hear that people are unhappy about the rise in price of Kindle eBooks caused by the Agency Model pricing forced on Amazon by the largest publishing houses in the business. Apple came out with iBooks as a means of adding value to the iPad’s initial launch, and in doing so arranged things to prevent Amazon from having an advantage. They went to the publishers, worked out an industry-wide deal, and ended the era of the affordably priced eBook. Now, finally, somebody is calling them on it.
The basis for the suit is a number of early indications that Apple knew ahead of time that all of the major publishers would be turning on Amazon at the same time. A much publicized Wall Street Journal article from early 2010 had Steve Jobs clearly aware of the impending changes and certain not only of his company’s ability to price match but of the publishers’ willingness to boycott Amazon in order to change the state of the market. While Amazon did make every attempt to keep the Kindle Store free of such manipulation and price hiking, in the end each publisher is the controller of its own works and they were forced to concede defeat in order to keep the content available to Kindle readers.
The suit charges Apple and the five largest publishing companies with antitrust violations, among other things, and would seek to represent anybody who has purchased an eBook since the prices jumped over 30% practically overnight last year. If successful, the Agency Model would be completely overturned, as would the arrangements currently in place preventing price discrepancies between retailers.
There is every reason to believe that this has at least a chance of success. It is not even the first legal obstacle that publishers have faced since they turned on the Kindle. In 2010 both Amazon and Apple were brought to talks with the Attorney General of Connecticut, who had concerns that the abrupt change would lead to a situation where competition between companies would be impossible. Such anti-competitive behavior would of course be a dangerous thing to be involved in, but the companies being looked at at the time were clearly not colluding. This time, looking at Apple and the publishers, it might not pass quite so easily.
Though it will be months, at best, before there is even an indication of which way this is likely to turn out, it is possible that there will be some change in the meantime. eBooks are the only area where the publishing industry seems to be growing lately, and the Kindle platform is the driving force behind eBook sales in the US. Anything that publishers can do to improve sales will be to their advantage, and they have shown at least some small interest in the potential from reduced pricing. Will it be enough to change the face of eBook publishing without legal intervention? Time will tell. It seems inevitable that publishers will come to their senses eventually and drive their numbers up any way that works, though, and the success of the lawsuit is still just speculation.
The success of any Tablet PC is pretty much going to depend on the usefulness of the associated application offerings. It would be hard to argue that this is anything but a major factor in the success of Apple’s iPad. Naturally, with the Kindle Tablet in mind for the future, Amazon was depending on its App Store to make it big and have all sorts of fun stuff ready when the hardware launches. The money to be made is not really in the hardware anymore for either of these companies, so it is no wonder that Apple is trying to corner the market on anything they can manage with regard to Apps.
So far, not much luck along those lines in the US. While Apple is trying legal channels to prevent Amazon from calling its app store an app store, the judge asked to provide a preliminary injunction against Amazon’s use didn’t see them having much chance of success and turned down the request. It seems like a lot of the argument Apple is making is based on their assumption that Amazon will be happy to host viruses, malware, and porn, which would keep potential customers from trusting anything labeled with the same name. Hard to see that going very far, in the long run, but time will tell. The trial is set to start in October of 2012.
Just because their case does not seem to be going well so far in the US, however, doesn’t mean that it is dead in the water. Germany’s response to the same lawsuit has resulted in Amazon being forced to close the door to new submissions for the time being. Amazon is, of course, going to be spending a great deal of effort trying to defend their interests wherever they can, but for the time being there is no word and little room to speculate on when that situation might change.
On the one hand, it really doesn’t matter how it comes out one way or another. If the name has to be changed to Amazon’s Android Emporium or something else ridiculous, it will only increase the potential for name recognition if they play it right and the functionality won’t be changing a bit. Even in the unlikely event that Apple can pull this off, everybody else is going to do just fine. On the other hand, anything that lets Amazon directly equate their new Kindles and Kindle Tablets to the iPad in peoples’ minds will work to their advantage as they push for maximum dispersal of the hardware. Yes, the important part will be the device integration which won’t rely much on names anyway, but why not make it as clear as possible?
What will happen in the meantime as we lead up to the rulings in various locations, pretty much the only thing that we can be sure of is that nobody with a Tablet is going to want to go without apps. It just wouldn’t really work. Hopefully that will be an option for everybody who wants to when the Kindle joins that marketplace.