5 key questions journalists and publishers should ask about the new Amazon tablet
Amazon shows off a new touchscreen tablet today that is expected to be the first serious competitor to the iPad since Apple created the tablet market in early 2010.
At 10 a.m. Wednesday in New York, Amazon will unveil what is expected to be branded the Kindle Fire. There are several reasons that news publishers and other content creators should watch this product closely (more on that below).
First, the press leaks have been flowing pretty heavily in advance of the announcement. Here’s the consensus on what to expect from the Fire:
- A 7-inch color touchscreen, not e-ink like previous Kindles. A bigger version may come in 2012.
- A form factor similar to the BlackBerry PlayBook.
- An operating system compatible with Android apps but significantly rebuilt by Amazon and using Amazon’s own app store, not Google’s Android Market.
- A content-focused operating system. TechCrunch reports: “The main screen is a carousel that looks like Cover Flow in iTunes which displays all the content you have on the device. This includes books, apps, movies, etc.”
- Priced under $300, perhaps with a version as low as $250. Turns out it's only $199. That’s a huge discount from the iPad, which starts at $499. The Nook Color costs $250, but it has fewer features.
- Not available right away. The first ones may ship in November.
- Major magazine publishers Hearst, Conde Nast and Meredith (but not Time) selling digital version of their publications.
That’s what the Fire is. But what does it mean? Here are the key questions that people in the news industry should consider.
How will Amazon handle customer data and revenue sharing? All Things D's Peter Kafka reports that Amazon’s “terms will roughly mirror the ones that Apple has established with most magazines this year: Publishers will keep around 70 percent of all Amazon sales, and the retailer will share some customer data with the publishers.” But some large publishers can cut special deals, according to Kafka, to keep a little more than 70 percent of revenue.
A revenue share comparable to Apple’s probably won’t hurt the Fire, but Amazon could be missing an opportunity to help itself out by undercutting Apple. As for customers, we’ll want to see if Amazon will be more forthcoming with customer data. Apple customers must opt in to share their personal information, which is a big reason some publishers are working around the iTunes Store.
Can publishers subsidize the purchase of this device for subscribers? Several newspaper companies have been looking to give subscribers low-cost Android-powered tablets in exchange for long-term subscription commitments.
Philadelphia Media Network recently announced plans to sell customized tablets pre-loaded with its apps. Tribune Co. is said to be planning to give free or subsidized tablets to people committing to a long-term subscription.
The Inquirer is asking tablet recipients for a two-year subscription at about $10 a month. That comes to about $240, nearly more than enough to give a Kindle Fire away for free. The Fire could also become a better-known, more-desirable brand among consumers than the generic Arnova 10 G2 models the Inquirer is using now.
Is this another app-development headache? The dual demand of Apple and Android app development is already too much for some publishers. Amazon's new tablet may make that worse.
While its operating system is based on the open-source Android and initially will be compatible with existing Android apps, that compatibility is not assured in the future. Amazon is “forking” the OS down its own path; as Android and Amazon continue to develop, it’s conceivable that some features or apps could become incompatible.
That uncertainty may be another incentive for publishers to turn to HTML5 websites for a main news product that works on all devices, supplementing them with niche apps if desired.
Can Amazon give a boost to paid content? As the world’s largest e-commerce company and largest e-book seller, Amazon knows quite a bit about selling things.
The company has millions of users with credit cards on file who trust it as a commercial broker. It has been selling e-books and newspapers on its Kindles for years. These are reasons to hope that Amazon can work with publishers to maximize purchases of digital newspapers and magazines. It could also help the growing trend of news publishers selling e-books.
Will it grow the tablet audience? The most interesting question is not whether the Fire will appeal to iPad owners, but whether it will appeal to large numbers of the 90 percent of the public that does not own an iPad. For now, tablets are luxury devices, not mass-market products.
Forrester Research is bullish, predicting 3 million to 5 million Amazon tablet sales by the end of the year. The price point is aggressively low. It’s going on sale just in time for holiday shopping. And Amazon has over 80 million monthly website visitors in the U.S. to whom it can heavily promote the Fire.
A little water on that Fire
There are some reasons for skepticism.
First, because Amazon diverged from the official Google-led development path of Android, the Fire may lose access to Google’s apps. Google Maps, Gmail, Google Voice and YouTube are among the most popular and well-executed programs for Android. If the Fire lacks these, it may feel less complete than the iPad or other Android devices.
Second, the tablet market remains difficult to crack. The HP Touchpad failed. The BlackBerry PlayBook has struggled.
Meanwhile, Barnes & Noble is expected to release the second version of its Nook Color e-reader in November, perhaps with more features and powerful hardware that could challenge the Fire.
As everyone else scrambles to catch up, the iPad is the undisputed champion now and for at least a few years to come, unless and until a competitor firmly proves otherwise. The Kindle Fire may have the best shot, but Amazon still must execute and innovate over time to make it a success.
Among the issues to figure out is, will the Fire be a smaller, cheaper iPad? Or something substantially different? Besides being a device for media consumption, the iPad does many things, from games and note-taking to music creation, medical record storage and cockpit data.
Perhaps Amazon will position its tablet more narrowly as the ultimate media device. At 7 inches, it’s more portable than an iPad. The size and the operating system design suggest this will be a product for reading, watching video and playing music, as well as some light Web browsing or emailing.
If so, it may be Amazon, not Apple, that brings tablet newspapers, magazines and video to the masses.