Why Amazon Kindle Fire HD will burn Google's Android tablet strategy

Why Amazon Kindle Fire HD will burn Google's Android tablet strategy

Summary: Like the Pillar of Fire in the Old Testament, Amazon drops its own Finger of God on Google and its Android tablet OEMs during Passover season in the form of a reduced-price Kindle Fire HD.

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Andy Rubin has departed the Android team, and the first Latin American has been elected Pope. Good things come in threes. What's the next bombshell thing of biblical proportions to happen this week?

Boom.

pillar-of-fire-amazon-620-logo

I suppose it is fitting that with the Passover coming upon us at the end of the month, we are yet again reminded of the miracles of antiquity.

And in true Old Testament fashion, like something out of a Cecil B. DeMille Hollywood classic, Amazon exercises its deific might as a content consumption powerhouse by lowering the price of its 16GB 8.9" Kindle Fire HD tablet to $269.00.

If I may paraphrase Chuckie Heston as Moses, when the Lord smites the Pharoah's army with a giant tower of fire that stops them from giving chase to the Hebrews in their exodus of Egypt, 

"Who shall withstand the power of Kirkland?"

I suspect that quite a few Nexus 7's and Nexus 10's are going to drown in the Red Sea because of this. 

At $269.00, the Kindle Fire HD 8.9" is a whole lot of HD tablet for not a whole lot of money.

At $299.00, the Kindle Fire HD had some difficulty distinguishing itself from most of the competiton, but as Amazon continues to apply pressure on the high-volume Android OEMs like Samsung, ASUS and even Google itself, the value of Amazon's ecosystem along their their low-priced but very well-designed tablet becomes readily apparent.

Indeed, the Nexus 7 costs less than the Kindle Fire HD 8.9", at $199 for the basic 16GB model. However, the Nexus 7 lacks a full 1080p display, a front-facing HD camera, a dual-band high-speed Wi-Fi transciever, and high-quality stereo audio.

And as I have recently discovered, it also has a crappy, fragile glass panel, rather than the strong Corning Gorilla Glass used in Amazon's device.

One could say I am making an unfair comparison because Amazon also has the regular 7" Kindle Fire HD, which is closer in configuration to the Nexus 7 and costs the same, at $199. Like its bigger brother, it has a high fidelity audio system, dual-antenna high-speed wireless, and the Gorilla Glass.

But AMEX has recently been their offering this tablet to their Awards members for $149.00 and I suspect that with this price drop on the 8.9" model, we are likely to see a drop on the regular Kindle Fire HD price as well, along with a blowout of inventory.

The closest product Google has to offer to the Kindle Fire HD 8.9" is the Nexus 10, which is their premium 10" tablet, made by Samsung, and is positioned as more of an iPad 4 competitor at $399.

Samsung has the Galaxy Tab 7.7", which has higher build quality than the Nexus 7, and only costs about $20 more, but is technologically inferior to the Kindle Fire HD 8.9". 

In this space, Amazon is essentially running unchallenged. They have the right size device, with the right set of features, for the right price.

Amazon also has a rich a content consumption ecosystem, a customer loyalty program that gives any Prime member access to free premium content, and superior customer service that cannot be matched by Google or any of its OEM partners. And they are willing to lose money on that device to onboard the customer and keep them hooked onto their content.

You could argue that the iPad mini is a direct competitor to the Kindle Fire, but the difference in price between the two devices is significant.

Additionally, the nature of the customers that Amazon is addressing is very different and is also fiercely loyal to Amazon's brand. They are a value-oriented and content consumption-focused customer versus a premium, high-end customer that is willing to pay Apple's prices and who may already have familiarity and affinity with that company's product and application ecosystem.

As a result, what we have here is Amazon and Apple giving Google and its Android partners the squeeze.

Egyptians, meet the Pillar of Fire and the Red Sea. 

So what does that mean for Google and the OEMs like Samsung and Asus? It means the prices of all of their tablets need to come down and the build quality of their mid-size devices needs to improve and achieve feature parity with what Amazon is doing for less money.

Google also needs to figure out how to create customer loyalty, particularly as it relates to content on Google Books, Google Video and Google Music on the Play store, as well as with e-tailing in general, which the company has never been very good at.

For a company that has no experience in customer relationship building after the purchases of their products are completed, this will be a hard territory for Google to invade, particularly against such a savvy and entrenched competitor like Amazon, who knows this space better than anyone. 

Google does have some advantages in the sense that Google Play has more apps, and their own version of Android has native versions of Chrome, YouTube, GMail and a number of other programs that makes their experience unique, so this will help them retain their existing customer base, especially for folks that are tied to their cloud services.

But the Kindle Fire's apps for email and web browsing are more than "Good Enough" and they will continue to get better. Google's secret sauce is not going to be sufficient to compensate for the rush of new customers to Amazon's tablet platform.

Has Amazon lowering of the price of the Kindle Fire HD 8.9" put Google and its Android tablet OEM army into a crunch between a pillar of fire with Apple on the other side of the Red Sea waiting to drown them? Talk Back and Let Me Know.

Topics: Tablets, Amazon, Android, Google

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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83 comments
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  • Eh, i got a kindle fire HD because

    It basically makes the prime membership soooooooooooo much more appealing, free streaming to go with my express shipping? I can dig it.

    Yeah, I got it just to their full advantage of my prime membership.
    icyrock
    • That is the appeal of the Fire

      Without it, the Fire would be nothing more than just another crapware tablet with an old version of Android.

      The "ecosystem" is what made the iPad the success it is, and Prime is the reason the Fire is surviving (and winning) the Android tablet wars.
      wackoae
      • Agreed.... partly!

        Don't forget that any crappy tablet with crappy hardware features would be successful even if it had Prime. The Kindle Fire is a success because it got both right, the hardware as well as the content, and MOST IMPORTANTLY, the PRICE!

        Apple, surely has the hardware and content right, but NOT the price. Amazon seems to have got all these right. Is the Kindle Fire HD better than the iPad? In some respects yes, in others no. But according to this article http://tabletxray.com/kindle-fire-hd-vs-ipad-mini-comparison/ at least the features that matter most to most of us seems to be better on the new Kindle fire hd compared to the ipad mini.
        Bob Rac
        • Not so sure

          I own the Kindle HD 8.9. It looks great and feels great. However, performance is subpar. Long battery recharge, can't get all GooglePlay apps, the quality of alternative apps for main apps like youtube, etc is not great and web browser performance suck. I like it and bought because I wanted a tablet with a bigger screen and the low price. When I need to look something up, my Nokia 920 is my go to device. Maybe my frustration is down to the slow internet browsing which is why I wanted a "play" tablet. I'll wait until a good W8 Pro tablet (better than Surface Pro) to replace my Kindle Fire.
          Coremail Rx
          • overall picture...

            Two things:

            First, your used to obscure operating systems, as witnessed by the use of a Windows Phone device.

            Second, you own such a device (a 920), so you're opinion doesn't matter here.

            Okay, that was a bit of trolling. Now, with that out of the way, in all actuality, you're a unique customer, in a quite limiting niche. You've accepted the fact that you'll have a low(er) quality device (overall), with a subpar choice of applications, in terms of quality, and performance, for a one-time discount of $50-150 dollars. This decision also places quantitative limits on the experience of the device, over the lifetime-- my point being that a cheap device is much like a cheap graphics card in the year 2000-- it'll play your games at 30fps for all but a year, then you'll be banging your head against the table, wondering why you didn't spend $50 more, and get a graphics card that'll play the games you'd like at 60fps, for two years....this point is exaggerated, but it's an exact representation of what a new market looks like, for a new device.

            If we look at the big picture, we see the following:

            The Kindle HD 8.9 is a compelling product for the average Joe, but only for the moment. The software is the limiting factor here, and it's an extreme limitation that'll only get worse as time continues in the direction it always has, if only for one reason...people will learn about it.

            The Kindle band tablets are terrible devices. Nobody buys (anymore...) a Kindle to consume Amazon content. They buy a kindle (did autocorrect really just replace the word kindle with uncle?) because they want a tablet, and they think they can get one cheap. The Reality is, the device is a two legged dog. While they're nice if youve never seen a dog before, once you see your first normal dog, realize what a dog could be, and realize a dog could possess a much greater repertoire of tricks if it had four legs, you'll realize that the breeder was a real snake oil salesman.

            A real android tablet is capable of so much more than any kindle. Even a fist generation Google tablet will provide so much more than a Kindle Fire HD. Component services like the Kindle app, Google Apps & services, Netflix, the browsers, and 700,000 other apps (to include Play Music, it's companion subscription service, their cloud services, Play Movies, etc.), in aggregate, provide an experience that is even greater than their desktop counterparts.

            The only-- let me be extremely emphatic on this point....the absolute only-- area a kindle fire can surpass it's competition is in the free streaming area. And that's only the case if you omit certain realities, such as the limitation of the browser, the lack of a native YouTube app, etc. And you pay for this significantly, financially. Prime isnt something that's free forever. And while you may get a taste, at a discounted rate, via various methods, you'll more than pay the $30-$130 difference in apps (that youll be forced to buy when you realize that out of the 50 email apps, only 1 is worth the bytes it takes to download, and it costs $10), and in the price of a prime membership.

            Just as we (those of us who can enter a few lines into a command prompt, root our devices, and install an AOSP ROM) are a tiny niche of users, so are the users that actually get their money's worth with prime. The real value in prime comes from the savings to be had from shopping at amazon.com and enjoying the free shipping....even this point is at risk of becoming moot, as free supersaver shipping has all but blanketed the site (if youre not stupid and only submit orders that are fulfilled and shipped by amazon) and costs you a mere 3-5 days extra shipping time.

            The overarching theme is of a device that's great at one thing, and it's apparent that it will continue to be great at only one thing, unless amazon thinks it should become an OEM (which we know is a terrible idea). That one things is-- an eBook reader. The carousel interface, the screen, the software, it's all great for being a consumption device. But unless it dumps it's own services in favor of google's, amazon will be forced to continue dropping the price, until it competes with other ereaders.

            I would have liked to see Amazon to succeed in this area. Choice is nice, and ultimately, great for all of us. But the shameful, unfortunate truth is, the Kindle is a lightweight newcomer, attempting to fight in a heavyweight tite bout... it doesn't have a chance, if only for the reason that Amazon has tied it's own hands behind it's back.
            Widg3ts
    • It's $199

      I'm on Amazon right now and I see $199 not $269. $269 is nonsense. This thing is meant to move Amazon content and products, it should be a give away device since Amazon sales are worth far more. If you have prime they should be throwing these things at you. Maybe they should give away free Fires with every 2 year prime contract. That would annihilate Android and boost Amazon sales.
      T1Oracle
      • You have to be kidding

        $199 is for the 7", $269 is for the 8.9 inch version which was $299, now who looks like nonsense.
        eye4bear
    • What's the internet connection that goes with Kindle Fire?

      For the first time, I'm interested in a tablet, and even in a Kindle. I'm a rabid Kindle for PC user, with over 100 Kindle books. I have trouble thinking I'll want a tablet, but if it offers email and good internet so I can shop at Amazon easily, and for the same price as another netbook, I might want this.

      So I need to know whether Amazon has its own internet service that goes with the Kindle, or do you buy the service through some third party like Verizon or ATT, etc.? I only want this is ONLY Amazon is the vendor for the whole shebang.

      I'm a fiercely happy, fiercely loyal Prime Amazon customer, till someone shoots me dead.
      brainout
      • Kindles Market Segiment

        The Kindle Fire is aimed at Android/Tablet users who shop on Amazon quite a bit. It is a stripped down Android tablet, with the Kindle and other Android applications pre-loaded. If you want a tablet that you can use to shop at Amazon, or if you have a sizable Amazon library of books, movies and music, then it is a good buy for you.

        What the Kindle Fire won't do for you is let you roam the web undisturbed, or let you easily remove the Amazon applications.

        If you are a serious Linux person, then it is simple to 'root' the Kindle and change anything on it, right up to replacing the complete operating system with stock Android, or even Ubuntu or Fedora.

        So, it's a good buy for either an Amazon loyal customer, or a serious hardware hacker.

        If you don't fit in either of those two camps, then buy something else.

        The market right now is in near free fall. I bought a no name tablet (MID) last month. 1080 P screen, 2 Gigs internal storage, 500 Megs ram. Price was only $75.00 including shipping. I went right on the Google Play Store and loaded up the games that the Grand Kids play on my phone. I could also go to the Android Market, and load up apps there too. With the right Apps, any Android can become a Kindle Fire. I also boosted it up a bit with a $25.00 32 Gig TF (Micro SD) card. Now I have more memory on my tablet than I had on my last PC hard drive.

        But, that (the really cheap tablets) is the real pressure the vendors are up against. It isn't Samsung verses Google, it's Samsung and Amazon verses small assembly houses nobody has ever heard of.

        The assembly cost of these little tablets is only about $60.00, so that is where the price is headed. Not $200.00 or $600.00. That's the real reason Apple and Microsoft/Nokia are doomed. Phones may be different, or not. But, in Tablets, the race to the bottom is already in the last lap. the Pundits just haven't noticed it yet.

        Oh, and don't bother worrying about poor Google. Google doesn't make ANY money on Android. Google makes it's money on the advertising from your searches, your driving direction requests, your email, and the small ads that appear in all of the free Apps.

        It doesn't even make any difference to Google whether you use a Samsung tablet, an iPad, or the cheapest thing offered on the Web.

        Android is just a vehicle to get you to Google's search site.
        YetAnotherBob
        • No Name Tablet

          Where did you get the no name tablet?
          skubysnak
    • Kindle is Apple for Android

      Do you want a cheaper tablet without all those choices and decisions. Amazon to the rescue. The kindle offer all the wall in garden and choices made for you that Apple does while still being Android at some level. Kinda like Phone and all the added feature that carrier and manufacturer add for you. I much prefer the stock generic OS and then add what I want not what Amazon, Apple, or even Google want me to have.

      That being said, I do like many of Amazon apps and without their devices Android would not be where it is in tablets. I would not buy a Kindle for me, but for a less tech savvy person not a bad option. I also would not turn one down if it where given to me, just would prefer other options.
      alex_darkness
  • Troll bait

    Stupid article. Just click bait.
    Rogifan
    • Wow, Jason is working overtime for Microsoft today...

      Two FUD/Troll Bait articles in one day to rally the troops or trolls here at ZDnet.

      One would think from the tone of this one you really think you are God's Messenger.

      Steve Ballmer is no God, Jason.
      DB.Cooper
    • No, not really...

      I'd like to think it was a good article, if I could bring myself to read through it without my head exploding. Either there are no proofreaders/editors at ZDnet, or they are very very bad. Are these guys supposed to be professional reporters with a proper grasp of their native language, or are most of them just hacks? Now, I know those of you who are completely uneducated will say "who cares about the grammar/spelling/sentence construction, etc.", but when a "writer" cannot put together a piece that is not full of mistakes, I have a real hard time believing anything he/she has written. C'mon, man!
      rmazzeo
  • Google has no tablet strategy

    Android platform is a mess, too many cooks and too many thieves.

    There is a beautiful platform that is emerging, its called Windows RT or 8 or whatever. Built on a solid foundation, its the future.

    Half-ass android , kindle and iOS will not be the last man standing.
    Owlll1net
    • Emerging?!

      I guess they are submerging already - sadly but true.
      Rt future is very uncertain, I'm curious to know sales for q1 2013.
      AleMartin
    • Owlll1net a beautiful platform that is emerging

      pass the pipe Owlll1net, I need to loose my mind like you have...........you must be on some trip..................whaat is it?.....UP UP AND AWAY
      Over and Out
    • solid foundation?

      It seems to be sinking in the swamp.
      jessepollard
  • Wow

    You just cannot stand that Google is starting to trounce Apple in every area can you? Everything is always Negative about their products with you guys and it cracks me up because it is so blatant!
    slickjim
    • You do realize, analytics points to Android tablet growth as dead?

      As in less and less people every day are using Android tablets to interact with the web.
      Bruizer