Amazon may only release Kindles once a year, but when they do, it is worth noting. Last year, they rolled out the Kindle Fire, and this year they not only upgraded the Fire line, they also answered the NOOK with Glowlight, addressed head-on their hardware and software priorities, and basically nailed every expectation out there. So what does it all mean?
What I found most interesting about yesterday’s announcements were Jeff Bezos’ remarks about hardware. Basically, he said that Amazon isn’t interested in making money on hardware; they want to sell us goods and services. Every device they sell is designed to sell you more Amazon products. This has been obvious for quite a while, but I think this might be one of the first times Amazon flat-out stated this as their strategy — especially during a hardware launch!
Their ecosystem really is their main weapon, and the Fire ecosystem really highlights this. B&N can throw all matter of hardware goodies at the NOOK tablet, but the Fire offers more bang for the buyer’s buck. Between Prime streaming, Whispersync, the Amazon AppStore, and yes, the Kindle Store, it is hard to compete. Amazon is stacking the deck so that you don’t just want the device, you want the experience. It may be a bit more disjointed than iTunes, but it is the same strategy: control the content, and the hardware sales will follow.
The Fire line really highlights this plan, especially “immersion reading” and x-ray for movies. Here Amazon is leveraging their ownership of Audible.com and IMDB.com to bring a deeper experience to the content. But how do you get this amazing new way to watch a movie or read a book? Only on a Kindle Fire. Slowly but surely, they are stacking their devices with services that require a piece of the Amazon portfolio, plus the hardware to access it.
Maybe, like me, your weakness is reading. The Kindle Lending Library, available to Prime members, is an attractive way to pick up an extra free book a month to read. Or you are like Sarah, and you like watching movies and television shows before bed. Who needs Netflix when you have free Prime streaming movies and shows? Now even audiobooks have worked their way into this set of incentives. So when you look at a competitor, say, Barnes and Noble, you aren’t looking at whether the NOOK Tablet is better hardware, you are looking directly at the ecosystems. B&N has done a lot to improve their offerings, but Amazon pushes the limits even further.
Amazon doesn’t just want to sell you books, they want to sell you everything. They are working hard to cement their place in the tablet and ebook markets, so what’s next? Given their admission about wanting to sell services, I could easily see an Apple TV competitor down the road. If selling a set top box for $50 would move more Prime memberships, it would make sense. Heck, they could even offer up books on it; imagine an interactive kids “book” on a TV screen, or an instructional book with a mix of video and text. I have a hard time imagining how Amazon would successfully sell a phone, but who knows…maybe the LTE Kindle Fire is a test run for something more!
One related coincidence that Amazon couldn’t have planned better if they tried, by the way-today a judge upheld the Department of Justice’s settlement with the publishing companies. So not only is Amazon riding high on hardware success, they are about to lose many, many pricing restrictions too. It is a very good time to be an Amazon customer, and a very bad time to be their competitor!
Are you excited for the new Kindles, or do you prefer to keep Amazon at arm’s length? Let us know in the comments!
For more coverage of Amazon’s announcements, check out our live discussion as well as a preview of Amazon’s new commercials!