Amazon’s Fire Phone is Mainly for Amazon’s Customers

June 18, 2014

Several journalists took a small segue today in their coverage of the launch of the Amazon Fire Phone to note that Amazon’s Kindle Fire has been extinguished. Or nearly so. Based on IDC’s May report, the Kindle Fire has only 1.9% of worldwide tablet shipments, down 47% year-to-year.

However Amazon doesn’t make mobile devices to capture hardware marketshare. It wants to form a tighter bond with its customers, one that bonds them to shopping Amazon. “The most important thing that we’ve done over the last 20 years is earn trust with customers,” Amazon CEO Jeff Bezos said at the launch today. This led logically to a straightforward explanation of Amazon’s planning for the phone. Bezos said that Amazon executives simply asked themselves, “Can we build a better phone for our most engaged customers?”

Over at Mobiquity, Gene Signorini pointed out that the Kindle Fire Phone is “not about devices sold per se, but rather about the sale of content and merchandise and the overall value per Prime subscriber.” Amazon need only convince some 10% of (an estimated 20 million) Prime subscribers to buy the new smartphone to sell two million devices. “However,” he notes, “this would only represent about 1% of total US smartphone market share” in a six-month window.

Jeremy Greenfield at Digital Book World asked me for comments earlier today, in particular how the device might affect ebook sales. He printed a couple of my remarks in his Forbes report on the Amazon launch. Here is my full analysis of its likely impact on publishing:

Amazon Fire Phone

The phone is….do we call it “sexy”…with new (or recent) features like the 3D cameras, Firefly, Mayday and gesture controls.

The Firefly feature, which quickly recognizes products and gives you the option to buy them on Amazon, is bound to increase showrooming, including buying books from Amazon. But in the case of showrooming, the total number of books bought doesn’t change much, and shifting more book buying to Amazon apparently decreases publisher margins and clearly dimishes the power of book retailers.

The 4.7-inch display is better for reading than the iPhone 5′s 4 inches. Bezos did highlight that it will be “a great phone for reading.” In the research I’ve been doing for the report “Mobile Strategies for Digital Publishing” (to be published next month by Digital Book World) it’s very clear that reading is not a significant use for mobile phones today. Though with all of Amazon’s reading-friendly features this will be the best-yet phone for bibliophiles.

The downside is that not only is the mobile experience not optimal for reading, it is optimal for other purposes. Mobile is mainly about social media, texting, gaming and video. Each of these is more compelling on mobile than reading — you don’t buy a phone to read a book.

Also Amazon’s decision to go it alone on the OS — cannibalizing but not fully supporting Android — means that none of the top Google apps — Gmail, Maps, and Chrome — are available on Amazon mobile devices. Amazon’s substitute apps pale by comparison.

I’m sure the phone will take a share of the market, but with aggressive competitors like Apple, Samsung and Microsoft, that share won’t be easily gained. It’s good news for readers, but probably won’t much move the needle in terms of overall ebook sales.

But I wrote that before I read Bezos’s remark that the phone targets Amazon’s “most engaged customers,” and not, apparently, the much broader base of mobile phone users. Amazon Prime is the conduit helping consumers to get a better deal from Amazon, if they plan to spend lots of money with the company. The Amazon Fire Phone is another input device helping Prime users to fulfill their task.

June 19, 2014: Jeff Bezos, interviewed in the New York Times, says: “The phone will make Prime memberships better, and Prime looks great on this phone. It’s not that there’s no interaction between these elements. But to say that’s the primary purpose is too simplistic.” Farhad Manjoo comments in a related article “Though the device is called the Fire phone, Amazon’s new gadget is less a phone than a pocketable cash register hooked directly into the retailer’s intelligent warehouses.”

June 20, 2014: Christopher Caldwell in the Financial Times: “(The Fire phone) has more to do with connecting Amazon’s customers to merchandise via credit card than it does with connecting them to other people via conversation.”

June 22, 2014: @BenedictEvans provides the best analysis thusfar of the Amazon Fire Phone with an emphasis on Amazon’s “fork” of Android — are they solving a user problem or their own business problem?

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Diplomacy in Action: State Department Sides with Amazon

June 15, 2012

I couldn’t make this stuff up if I tried: (more…)

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Separating the BS from the Kindle DX

May 7, 2009

I had a grand plan tonight to create an in-depth article debunking all of the false (or, at best, misleading) information that surrounded today’s launch of the Kindle DX.

It had the same title as this blog entry.

The article began:

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Hush now, don’t explain
Just say you’ll remain
Unless you’re mad, don’t explain
–    Billie Holiday, Arthur Herzog

The subscription-only PublishersLunch remarked that “DX” must mean “didn’t explain,” noting that:

“The company still insists on calling the unit Kindle DX, though as far as we could tell, DX stands for “didn’t explain.” As in, didn’t explain the name; didn’t explain when it’s
available (except for “this summer”); didn’t explain any of the details of the textbook pilots; didn’t explain the incentive pricing to newspaper subscribers; and so on.”

Amazon’s announcement of the larger format Kindle DX is generating as much media coverage as the release of the Kindle 2, following on the reputed success of the original Kindle.

This summary article examines the claims made by Amazon and also by the wide-eyed sycophants in the press who have been infected with what is increasingly referred to as Bezosmania.

(The standard disclaimer: I’ve never worked with Amazon, its partners or competitors. And I’ve spent a ton of money with Amazon over the years, albeit not on Kindle eBooks, as these are still not available in Canada for reasons too obtuse to segue into here.)

—————————————————————-

Then I made the tactical error of having a hearty home-made dinner, and compounded the error by reading the recent “Digital Issue” of Advertising Age.

And when finished with the hype in that issue I could only think: who cares if the news surrounding the Kindle DX is 90% hype and 10% loose data?

People would far rather believe that Amazon is blazing trails (after all, it’s stock is up 60% this year).

Why rain on everyone’s parade? I can debunk virtually every Amazon and press statement issued today surrounding this product. But why bother?

Carry on…the sun is shining above the rain-sodden clouds in Seattle. All will be well.

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Kindle Mania Overtakes America

February 17, 2009

The Kindle 2 was indeed unveiled on February 9th as “rumored.” (What do you call a supposed rumor that everyone already knows? A “deliberate leak” perhaps.) Ship date is February 24th, just in time for those who forgot to buy chocolates and roses on Valentine’s Day.

Kindle lovers everywhere are thrilled; the skeptics remains skeptical.

The upside: it’s a little thinner, an ounce lighter, has a better display, and a longer battery life. More titles are now available which is a good thing since the increased storage capacity will hold 1,500 books. As the average American reads 5 books per year, they will be able to keep 300 years worth of reading on their Valentine’s or birthday gift.

The downside: it’s the exact same retail price, $359, and there’s no trade-in allowance.

feat-libr-300px._V251249390_.jpg

I have to admit that Jeff Bezos is a marketing master, having convinced so many people that the Kindle is a momentous leap forward. Even those who are not inclined to buy one are starting to feel like wallflowers at the orgy.

But talk about modest improvements offered for the same price.

According to the Seybold Bulletin, “A poll of about 1,000 attendees (at the recent Tools of Change for Publishing conference) indicated that around 400 were current Kindle owners, but that only 15 of those were actually considering buying the new device, leaving open the question of how many new buyers the second generation device will have. The device does not offer existing users enough change to make it worthwhile to invest a second $359 in the device only a year after the introduction of the first Kindle.”

Meanwhile an online survey on the Toronto Globe and Mail website last week asked: “Would you ever switch from reading printed books to reading e-books with a digital device?” With over 11,000 responses, 75% said “No.”

switch to e-books-sm.jpg

But some colleagues who I respect are Kindle converts (KCs). Dave Kellogg, CEO of Mark Logic, writes one of the publishing industry’s most intelligent and insightful blogs. He’s a Kindle fan, and explains his reasoning here.

The entry is prompted by a story in the current issue of The Economist, entitled Well Read. Amongst Dave’s trenchant observations is that the Kindle is the strategy whereby Amazon will achieve over the publishing industry something near Apple’s power over the music industry — and the only thing he see stopping it “is the Google Books settlement, where Google gets a shot at creating an Amazon-class bookstore for books — and derivatives thereof.”

He also notes in the article what must be the most preposterous claim yet made for e-books: “So far, says Mr. Kessel [a member of Amazon's Kindle team], this does not seem to spell the end of paper books, since Kindle users buy just as many bound books as before, so that their total consumption of books goes up by 2.6 times.” Could you give us that once more, Mr. Kessel?

Kellogg does not mention that the same issue of The Economist contains an editorial called An iTunes Moment? which notes that “the iPhone, meanwhile, has quietly become the most widely used e-book reader: more people have downloaded e-book software (such as Stanza, eReader and Classics) for iPhones than have bought Kindles.” The piece concludes that Apple may well be in a position to block Amazon’s attempt to corner the eBook market. “There are already millions of iPhones and touch-screen iPods in circulation, and the company has long been rumoured to be working on a larger “tablet” device,” the editorial notes. “Selling e-books and newspapers via iTunes, which already has millions of paying customers, would be simple. True, Steve Jobs, Apple’s mercurial boss, has expressed scepticism about e-readers, claiming that “people don’t read any more”. But Mr Jobs has a record of insisting that Apple is not interested in making a particular product (a video iPod, a mobile phone) — right up until the moment when he unveils one. Might e-books soon be the next example?”

Stay tuned…this story has a few more chapters to go.

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The Kindle Changed Oprah’s Life

October 26, 2008

According to an entry on Oprah Winfrey’s blog, called “Oprah’s Favorite New Gadget,” “This summer, Oprah received a gift that she says changed her life. ‘It’s absolutely my new favorite favorite thing in the world,’ she says.” 20081024_tows_kindle1_350x263.jpgIt’s nearly November and she hasn’t found another favorite favorite thing in the world? I guess she already has the Oral-B Pulsonic Sonic Toothbrush.pulsonic_ip.jpg

The blog gushingly continues, “Although the Amazon Kindle costs $359, Oprah looks at it as an environmentally friendly investment. ‘I know it’s expensive in these times [Ed: not for Oprah; hers was free], but it’s not frivolous because it will pay for itself,” she says. ‘The books are much cheaper, and you’re saving paper.’ [Ed: although by purchasing a device with a far nastier non-biodegradable high carbon footprint than paper] New York Times Bestsellers and New Releases are $9.99 or less, unless otherwise marked.

“As a special offer for Oprah Show viewers, Amazon.com is giving $50 off the price of Kindle. Enter the promotional code OPRAHWINFREY during the checkout process at Amazon.com to receive the discount. This offer is valid through November 1, 2008. [Ed: A generous 8 days.]

It’s a four-page blog entry, and I’m starting to feel vomitous quoting from it, but I’ll stave off the bildge for another moment with this quote: “Oprah says she will talk about her Kindle with anyone who’s willing to listen. ‘Anyone who knows me knows I’m really not a gadget person at all, but I have fallen in love with this little baby [emphasis mine],’ she says. ‘If you’re like me and a little computer challenged, do not be afraid of the Kindle–do not be afraid [emphasis mine]–because you don’t even have to have a computer for it to work. That’s the brilliant thing about it.’” Yes, quite brilliant. Unless you already have a computer.

The conclusion: “‘You can tell a lot about a person by what’s on their [Kindle] homepage,’ Oprah says.” Included on her homepage are “Crack the Fat-Loss Code: Outsmart Your Metabolism and

Conquer the Diet Plateau” by Wendy Chant. There are certain things that don’t change.

An article by Antone Gonsalves in Information Week notes: “Winfrey’s endorsement of the Kindle could lead to more than just a sales boost. It could go a long way toward moving the Kindle to the mainstream from a niche market.” How depressing. Another chapter in the future of publishing has just been written. Loggers will be picketing her show, and getting into fistfights with workers from the semiconductor industry and the employees of E Ink.

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