With a $200 price and the full weight of Amazon's cloud content services behind it, the Kindle Fire will be a real market disrupter.
On 28 September 2011, Amazon introduced the Kindle Fire. It is a media tablet with a 7-inch touchscreen, dual-core processor, Wi-Fi and 8GB of storage. It offers a custom user interface (UI) on Android Gingerbread integrated with Amazon services including music, books, magazines and video, and features Amazon AppStore and a new browser, Amazon Silk. The Kindle Fire will cost $199. Amazon also launched three new e-ink Kindles priced from $79.
Gartner believes the Kindle Fire will:
Play a different role from the iPad. The Kindle Fire lacks 3G, a camera, microphone or Bluetooth and has a smaller screen than the iPad. It's focused on content consumption. We doubt that consumers wanting a tablet for communication or productivity will be tempted. We expect Amazon to launch a 10-inch tablet in 2012 that will compete more directly with Apple.
Drive cloud service adoption. Amazon built the Kindle Fire around its cloud services — video, books, apps, music, Web services, computing and storage. The UI is content-centric, and the internal storage serves as cache for offline use — the user's content synchs wirelessly as needed. Amazon is offering free unlimited cloud storage for Amazon content, with 5GB free for other content stored on Amazon Cloud Drive. For $20 a year, users get unlimited music. We believe these integrated services will make the Kindle Fire attractive, particularly in North America and markets such as the U.K., where Amazon has a strong content offering. Tablet manufacturers that lack Amazon's (and Apple's) breadth of services will find it harder to compete.
Have a lasting effect on media tablet prices. The Kindle Fire lacks some hardware features, but has quality components such as Gorilla Glass, a dual-core processor and an in-plane switching (IPS) screen, for under $200. Competitors will have to offer something special to command higher prices.
Disrupt Android, and Google's role in it. The Kindle Fire does not use the Android UI, and aside from Google search, there are no signs of Google services or the Android Market. Although Kindle Fire users will have the option to download applications from other sources, we believe many will stick to the Amazon AppStore, and developers will follow them — particularly in the U.S. Amazon's store is already well-stocked with popular apps. Users of other Android devices can also add the Amazon AppStore (possibly tempted by its free paid app giveaways), which may threaten the Android Market more widely.
Affect media industry players. Publishers will be attracted by the features of the Kindle Fire versus the e-ink Kindles, but its screen is smaller than the iPad's — a limitation that affects the Nook Color too.
Android device manufacturers: Focus on growing the attractiveness of the Android Market, so that developers continue to see value in the Android ecosystem, rather than the Amazon ecosystem.
Tier 2 device manufacturers: Move beyond offering generic Android on generic tablets. Amazon offers breadth of content, a strong brand and a coherent experience at a low price. You have to differentiate to attract buyers.
Android developers: Evaluate upcoming Android versions and consider Android's geographical reach versus Amazon’s before deciding which devices and stores to support.
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"Competitive Landscape: Media Tablets" — Amazon's strong ecosystem, brand and ability to deliver low prices could disrupt the tablet market. By Roberta Cozza and Carolina Milanesi
"Market Trends: Worldwide, Apple's Competitors Expand Their Media Tablets Into Low-Tier Markets, 2011"
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