Ok – so yesterday Amazon announced their new tablet, the Fire. I heard all day long how this was Amazon’s iPad killer, or this was the best competition for the iPad yet, yadda, yadda, yadda…
I’m telling you now, and hear this all you news people out there, this is NOT, I repeat NOT a direct attack on the iPad! Sure Amazon hopes to get some people, that may have been thinking about buying an iPad, to buy a new Fire instead. This is a direct (and not the first) hit on Barnes and Noble, Amazon’s only real competitor. They (Barnes and Noble) chose to compete in this space – a space which Amazon had pretty much dominated. Now the advantage that Amazon has is not that their Fire is technically better, or faster or anything like that. Hardware is not the issue here or what Amazon really cares about. What they do have is the massive Amazon Marketplace. Not only do they hope to sell apps, but now they have another device that makes it easier for people that own it to buy everything from grocieries and light bulbs, to ebooks and magazines. That’s what they really want! That’s what this is all about. Devices like this will get less and less expensive. To the point that companies (like phone companies already do) will give away the hardware in order to get people to buy more stuff from them or subscribe to more magazines or a service (like Amazon Prime) from them.
Now, we need to look at the bigger picture here. Apple has a little bit of a problem – and this is why they will always be the kind of niche company they are. There is a fundimental question about what Apple is? Are they building hardware (which they insist on doing because it has to be done their way)? Are they a software company? Are they building TV’s, or computers, or tablets? Are they a mobile phone company? I’m just not sure what Apple is. They appeal to a specific group that just loves anything they make, but beyond that I’m not sure what they can do. They supposedly build computers better than anyone – but have been unable to break the 10% or so market share for the desktop operating systems that they’ve had forever.
So… Amazon is NOT targeting the iPad directly – and they probably won’t take much market share from the iPad with their Fire. Amazon will make money whether you buy from them using your iPad or your Kindle or your computer at work. But Barnes and Noble had better watch out because the Fire is a direct attack on them and the Nook Color!