Amazon's Kindle Fire success does not equate to Android's continued survival

Amazon's Kindle Fire success does not equate to Android's continued survival

Summary: Amazon has yet again thrown down the gauntlet with several new compelling tablet offerings for mobile content consumption. And the company is in good shape to weather the storm if Android itself falters.

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A few weeks ago, I engaged in a Great Debate with my colleague Ed Burnette about whether or not Google's "Jelly Bean", the latest and greatest version of the Android OS, and Google's Nexus 7 tablet (which it produced under partnership with Asus) would have any meaningful impact on improving Android's market share of tablet computers.

I picked the antagonistic side, whereas Ed chose to be the defender.

Although he had gained the popular vote, Ed lost. I won by virtue of having made a more convincing argument.

This coming week, I will again engage in debate, but this time with ZDNet Mobile News columnist James Kendrick, over the issue of Android's survival itself. Kendrick will defend, and yet again I will be the antagonist.

What can I say, I'm a very combative sort of guy, and being the valiant type is a far less entertaining proposition for someone like me. I'm a professional gladiator.

One of the questions Burnette and I were asked by ZDNet Editor-in-Chief Larry Dignan in our previous Android debate was this:

"Assuming a new Kindle Fire emerges---and it will---which device is more credible assuming roughly the same hardware specs as the Nexus 7?"

And here is how I answered it: 

"I think Amazon needs to do much better than have the same hardware specs as the Nexus 7, but let's assume they match it feature for feature. to make the Kindle Fire 2 more attractive the company is going to have to add a couple of really big carrots, and I think that the main way they can do that is increasing the perks for being a Prime subscriber and giving customers access to more free content, in the form of a larger Amazon Video library as well as a larger Kindle Owner's Lending Library, with more lends per month allowed.

But I would go one step further and say that Amazon needs to have a better display than Nexus 7 so that it is more of a reader's device, and they might even want to consider an ad-supported version like they do with the regular Kindle, in order to bring the price down."

You'll notice my emphasis here. Be it as it may Amazon has not stated yet whether or not Primes will receive increased benefits in the following calendar year, but I'm willing to bet that come the holiday season, they're very likely to do so in order to make Prime a more attractive carrot to go along with Kindle Fire sales.

But this week, Amazon did do exactly as I predicted in the second half of that response. The Kindle Fire HD 8.9" does in fact sport a superior display than the the Nexus 7, every single model of Kindle Fire is now ad-supported, and the price of the lowest-end device, an updated version of the original Kindle Fire, is now $165, which is cheaper than any of its 7" rivals with similar specifications.

Dignan asked us another interesting question in that debate, and it related to the ecosystems of Apple, Google and Amazon.

"Does Google have the parts to deliver a seamless content and commerce experience like Amazon and Apple can?"

And I answered thusly:

"Amazon itself has had problems competing with Apple only because while they have a very strong content ecosystem for books and magazines, and their music and movies library is excellent, the experience isn't as seamless as Apple on iTunes and the App Store. 

However, I would argue that Amazon does a much better job at seamless content integration than Google does right now with the Play Store. In terms of being able to use an Android tablet as a durable goods purchasing device I think Amazon has everyone outclassed, because their e-commerce application runs on everybody's platform -- their own, Google's and Apple's."

It didn't occur to me to expound on it at the time, since we were about two weeks away from the jury's verdict in the Apple v. Samsung trial, but there's another thing Amazon does substantially better than Google or any of the Android tablet OEMs.

Amazon's Kindle Fire user interface and industrial design is distinct and unmistakably different than what Apple uses on their iOS devices.

Not a single consumer would ever confuse a Kindle Fire for an iPad or an Apple product. Ever.

And if you have been observing what has been happening in the courts as it relates to the validity of Apple's patents concerning industrial design and trade dress, this is extremely important as to how it may affect the future sales of Android-based smartphones and tablets made by various OEMs that use Google's mobile operating system in their products. 

Amazon has claimed that the Kindle Fire currently represents about 22 percent of the entire tablet market in the United States.

One independent industry analyst, Horace Dediu, has estimated that since the product's introduction during the 2011 holiday season, the company sold approximately 5 million of the devices, although Amazon has never disclosed exactly how many units were sold, as such lack of disclosure is par for the course for the company.

However, it's probably a good estimate that the company will sell probably double or triple the amount of devices in CY 2013, and that will utterly dwarf the efforts of all the other Android device manufacturers combined, including that of Google's Nexus-branded tablet itself.

Amazon in many respects is immune to many of the issues that Google is experiencing with Android: Unlike Google, it has a superior content and ecommerce ecosystem and it has a distinct trade dress for its devices and software (which its customers appear to prefer to Google's by virtue of actual number tablet devices sold) which does not infringe upon Apple's.

Oh and one more thing. By virtue of being the largest Internet retailer in the world, Amazon represents a critical sales channel for Apple that the Cupertino electronics giant would be utterly mad to disrupt by virtue of frivolous patent litigation.

Jobs said he wanted to go thermonuclear on Android, Samsung and Google, not poison his own well. And I believe Tim Cook is a smart enough businessman to know who is a necessary 'frenemy' and who represents an actual threat. Attacking Amazon for infringement would be a zero sum game.

It's true that Kindle Fire devices run on Android, and Amazon uses Android apps to populate their Appstore for Android. So to some extent Amazon does have some exposure in the sense that they are reliant on Google to continue to develop the Open Source version of the Android OS to form the basis of their content delivery platform on the Kindle Fire. 

But the types of changes Google might have to make in order to help keep their OEMs out of legal trouble or defend their own branded products (particularly as it relates to Motorola's ongoing litigation with Apple or anything new that crops up in the future sporting a Nexus logo) will have very little bearing on the Kindle Fire going forward.

Let me put it in these terms. In a worst-case scenario, Android could cease to exist as a Google product offering and the company could end all software development, and Amazon could still continue to develop their own version based on the Open Source AOSP code and the Dalvik engine itself and remove any infringing features for use in their own products.

In essence, Kindle Fire OS would become a true fork.

We already know that you don't need "real" Android to run Android apps. Research in Motion already proved this from a purely technical standpoint with their PlayBook by porting the Dalvik VM to their QNX (BlackBerry 10) platform so they could offer Android-based apps in their BlackBerry App World.

Whatever is to become of Android given the final outcome of the current industry litigation and judgments is uncertain. However, what is certain is that Amazon would be very well equipped to sustain a thriving tablet and content consumption business even if Android as a Google-sponsored project were to end, or if OEMs such as Samsung were to give up on producing their own branded Android devices altogether.

Is Amazon immune from the problems that other Android device OEMs such as Samsung are facing? Talk Back and Let Me Know.

Topics: Android, Amazon, Apple, Google, Microsoft, Mobile OS

About

Jason Perlow, Sr. Technology Editor at ZDNet, is a technologist with over two decades of experience integrating large heterogeneous multi-vendor computing environments in Fortune 500 companies. Jason is currently a Partner Technology Strategist with Microsoft Corp. His expressed views do not necessarily represent those of his employer.

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66 comments
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  • Android version --- who cares!

    I know that tech writers are consumed with an OS and if the latest version is included or used. Guess what the average consumer does not care. Ice Cream, Jelly Bean is a trivial matter when it comes to a device and what value it will deliver. Yes I know that some will extol the virtue of the users experience, frankly I don't know anyone (consumer) who talks about the user experience.

    Android is an open OS and that has a lot of appeal to those who write apps and to companies who decide to adopt Android.

    What users do care about is the perceived quality of the hardware, the ease of use of the device and the hardware and the price. I understand some make a living nit picking or pole vaulting over mouse turds, the average consumer does not care.

    The first Kindle Fire was a good deal with a low price so low that a year latter I will not think twice about putting it in my draw with the growing collection of old cell phones. Unless Apple goes with a basement price on its new I-Pad, Amazon is going to be very successful with its new stable of devices.

    As an aside Apple who claimed that anything smaller to its current I-Pad size is not acceptable will put some spin on it that frankly Apple fans will accept because they have drank the Apple Kool Aid now available at an Apple Store near you.
    oldgeek143
    • Cannot remove advertising from Kindle Fire

      What surprises me that most is that, apparently, Kindle Fires have advertising and it cannot be removed or disabled. Why are tech authors not talking more about that issue?

      http://news.cnet.com/8301-33692_3-57508672-305/no-option-to-remove-ads-on-kindle-fires/
      Wakemewhentrollsgone
      • Ads

        If I can get a good tablet with a great screen for $199 I can totally live with ads. You don't want ads? Buy a different tablet. It's that simple.
        mathiasappel
        • the ads really arent that intrusive

          at least not on the kindle readers. There are far more ads--and they are more annoying--on webpages today, yet people put up with them.

          They should offer an ad free version for a higher price, but really this is a lot of sour grapes from people desperate to find some reason to bash the new kindle fire tablets.
          otaddy
          • It is an interesting buisness strategy...

            And I say hats off to them... They aren't the first to give away hardware at essentially cost, Looking to make money off of services, but hopefully it'll work for them.

            Of course they aren't going in blind; they've got a lot of experience in the e-reader market, and a year worth of tablet experience in the US. It is important to note that up until now it's been the US, as this market famously doesn't mirror others, countless tech firms have found products go down better/worse in the states than other markets... The reason of course is simple - we like to compare american percentages to say europe, but actually your talking about consumer attitudes in one country vs many.

            I agree that a high price to get rid of adds would be nice, but they tried this with the ereaders and clearly haven't thought it's worth going that route ... Yet. It is interesting to compare the two markets; where they doninate ereaders due to their closed exosystem and limited number of features actually needed, compared to the high-mid tablet market. They are very clear about who they are after; the mid to late adopters, those that don't want to/won't shell out the big bucks. These are the masses, and are also the guys the nexus is hutung down. Of course, we like tech so we talk about SGS3, ipad, surface pro... But these are elite bits of kit... The lower priced gadgets make up the numbers.

            I think they have a distinct advantage over those that have gone before; amazon is the defacto standard for electronic text, plus they are a trusted brand.

            As i say, it's a risky strategy, but I hope it works out for them. For me it's not for me; i have a pad and a nexus... I'm covered. However, if I didn't own either... The price would be hard to argue with.
            MarknWill
          • They didn't used to be on TV or the internet either

            Now I can't open up the ZDNet web page with out a huge banner expanding across the top or watch a 2 minute news story on NBC.COM without being forced to watch a 3 minute commercial. It never gets better, it always gets worse and before you know it Amazon will have full screen ads that you must watch before you run your app.
            balsover
        • The Kindle Fire would be great for schools . . .

          . . . except that the ads make is too risky. This is a very good device that has effectively locked itself out of a market because of the advertising.
          Wakemewhentrollsgone
      • Changed policy

        By now everyone should have heard that for 15$ you can opt out of commercials.
        primartcloud
      • It can be removed.

        Amazon confirmed yesterday that it can be opted out for $15 upon device purchase.
        jperlow
      • Simple - Amazon has been open about this "feature".

        I do not find these ads to be intrusive in any way on the Kindle e-reader so I would expect that it will be no different on the new Kindle Fire devices either.

        The bottom line is that the ads make it possible for Amazon to make money on those devices with the narrowest margins. Just as the Amazon Prime service is subsidizing the Kind Fire line-up.

        Why is this any different than the crap-ware that Windows OEMs put on your brand-new PC?
        M Wagner
    • Totally agree mostly....

      You can break a market down into little sets... Android users are wanting certain features and dont need others. IOS users will want other things but I do wish folk would stop harping on about the 'demise' of a product. It's not like we harp on about the demise of Ford cos we hate them but somehow that gets lost in technology. IOS devices are definitely much better at many things and definitely suit itunes users. I'm not one of them, and much prefer USB, uSD mouse support and Android gives me that.

      ANd I know plenty of folk who have an iphone cos they think it's cool and makes them look clever. They NEVER use any of the features and put up with charging it every day, whilst my BB9800 does what I want and lasts three days on a charge. Yoou can even switch it off and the alarm still goes off. Hey Apple.... that's a novelty eh. Maybe RIM patented that feature or maybe no Apple fan needs their alarm to actually waken the phone. Everything has something going for it so lets all just live together and be happy with the choices we can stil make. Lets not have the idiots kill-off a product and force us to use the one they like.
      johnmckay
  • Android is going no where

    Android is here to stay and there's nothing Apple can do about it. Amazon will be Amazon and it has it few that will pay for a locked down device that's running Android. I have the Kindle Fire which i Purchased for my daughter and she doesn't like it and she's 9 yrs old. The UI of the Kindle Fire is to suckish. There are no real good apps that run on the damn thing and what can it do better then any other tablet, which is nothing.

    I will say that there's space for Amazon but the best tablet of all if it ever comes out is Windows Surface. It can offer all that ios and Android can and work as a real pc.
    Samuel Rodrigues
    • surface

      The surface tablet will also cost twice more than a pc, definitely more than ipad or any androod tablets. You get the proverbial smoke and mirror rwdmond flavor for a hardware which does not exist (currently they sold about ZERO units, developers are NOT allowed to post any applocations, only selected corporations can and they have aver 200 apps available... Isn't this great.... Go for it....
      Dan Marinescu
      • Just wait till Oct 26, will you!

        To clarify, the Surface Pro version will be at par in cost with Ultrabook as it is a full PC experience. The iPad and Android cannot be even compared to that category. Its upgrade path for technically billion Windows users.

        On the WinRT applications front, all tablet started with few hundred applications in store. So it is stupid to compare current number of apps in competition versus those of a new platform. The growth is very similar to other platforms. Also, you can develop and publish WinRT applications now, the tools and marketplace is ready. The future is WinRT applications, with its inherent advantages over legacy applications (performance, security, etc.)

        Finally smoke and mirror, just wait for Oct 26 and see the truth yourself. The product is real, and it will sell well even if the base Surface model is expensive than iPad. The OS experience, with full Office, file system access, family safety and USB are key differentiators.
        ninjacut
        • How much will it cost?

          No one knows how much the basic RT will cost. Let's wait and see and maybe surprised.
          primartcloud
      • Why the hatred and assumptions?

        So we know the cost of an ipad is say £500, and we know the cost of good Androids is comparable, cheaper/poorer ones are available, and the price of a kindle. Add in that ,ost folk are actually bright ebnough to figure out the cost/benefit to them and all I smell is jealousy and petty prejudice from you.

        I've no idea what it will cost but I do know my ipad has limitations in connectivity and ZERO mouse support. My Asus Transformer overcomes all those but can't compete in all aspects.. that's my compromise. When the MS thing comes out I'll have another decision to make but I'd be a fool to say I'm not interested just now. What if it does all my PC does but is totally portable? What if I can hook it simply to my 24" monitor in various locations and have full networking, keyboard, mouse, and software I need? Surely I'd be a fool NOT to think that might be worth more than my currrent PC?
        johnmckay
    • I think overall Amazon is good for Android

      They are showing what is possible with the platform and seem to have put together a polished system.

      Now if Googlerola could only do the same with their Nexus line...
      otaddy
  • This time it won't be Barnes & Noble

    iOS and Android users who have not downloaded the WalMart app should take a look. You can bet Jeff Bezos has.

    WalMart did not become the world's largest retailer by being stupid. These guys were buying Teradata machines and combing through mountains of Big Data ten years before most people ever heard the term. By the time you can walk out to the WalMart parking lot, every item you bought has been re-ordered for that store; a lot of it will be on the truck arriving tomorrow. Was anybody watching TV when they re-opened the roads into New Orleans after Hurricane Katrina? The first guys in with supplies weren't the military, or the National Guard. It was WalMart. The Pentagon hires them to consult on logistics.

    I'm not selling WalMart stock here. I'm just saying that Jeff Bezos has had the luxury of being too small an operation to attract the notice of the world's largest retailer. But he's getting big now, and he's on their radar, and they're coming.

    They'll probably watch that mobile app, running analytics on what people do it with it, and quietly sharpening it, for a year before they get serious. They have the time. They have 10,000 stores around the world. Jeff won't be catching up any time soon.

    WalMart's tablet strategy? How about BYOD? You buy it, they don't subsidize it, they pass the savings on to you.

    The clash of the retailing titans will be much more fun to watch than Amazon meets Google.
    Robert Hahn
    • Sort of

      If the department manager messes up their inventory then the system fails... If the machine thinks they have 10 in stock and they just sold the last one, it will not reorder the product.

      Also, Amazon has operated with a loss for years, I cannot figure out how they are still around.
      slickjim
      • If you take the time to look, you can find the answer

        Revenues and profit margins are up for 2Q012 compared to last year. True, they are spending (read investing), but they are trying to grow and expand their business.

        Sorry to tell you, but they aren't going anywhere for a long time.
        otaddy