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Amazon gets BURNED, or iPad puts out Fire's fire
- Thread starter PracticalMac
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iTunes stores songs as separate MP3 files on the hard drive. On my iMac, they are located in:
/home/[username]/Music/iTunes/iTunes Media/Music/
This part, in context (emphasis mine):
Many physical purchases on Amazon's store (books, socks, jackets, etc) are very low margin, like most retail purchases. However, digital media are not -- thanks to Apple, many books on the Kindle store, like in iBooks, are sold on the agency model, and even discounting Amazon's selling costs from the 30% they take in, the margins are probably quite a bit higher than 2-4%.
So, if a Kindle Fire user only goes on to buy physical content from Amazon, yes, they have to sell $100s of merchandise to make up a $10 loss (if that itself is even accurate). If Amazon gets what they got with the Kindle, customers will buy digital media, and they will not have a problem recouping their loss leader.
I'm surprised nobody has mentioned Amazon's earning announcement yesterday. They missed earnings by quite a bit and it sounds like they may actually lose money next quarter.
So it looks like the predictions that they were only meeting that price point by losing money on the hardware are likely right. And investors are sure loving that.
So it looks like the predictions that they were only meeting that price point by losing money on the hardware are likely right. And investors are sure loving that.
No point in bringing it up. Amazon will sell a couple million of the Fire in the first quarter, lose a ton of money off it, "reorganize and shuffle", before killing off the Fire in favor of the cheaper, better selling alternatives they currently sell.
I've said it from the beginning, the Fire is nothing more than an ereader+, that can't access the Android marketplace, nor does it have enough onboard storage to handle anything useful. Return rate on his will be in the teens!
amazon is accepting pre-orders on it, eg. they aren't actually charging customers until they ship, yes? so it stands to reason what whatever costs for production for the new devices are being incurred up front and is affecting their Q3 bottom line.
you're making an unsubstantiated and circumstantial conclusion on the wrong indicators.
In the big picture of things, is truly a big loos Amazon hopes they will recover from with the Firesale (sorry about that).
Hardware is not Amazon's forte.
So, yes, Amazon is in the red and it will be some time (if ever) they make profit from Fire.
If Fire is only sold by mail order, it could be much worse.
If tech support is minimal, worse still.
While Amazon and Kindle have strong market name, it will be huge uphill battle for Amazon.
What do you think is the break point, 2 million by February?
But Amazon will not tell you, and if they do they cloud the truth.
No doubt Bezos's vague sales report tactics are wearing thin, and I am sure this time stock holders will start to seriously question how well Kindle is really doing.
PS: dropping hardware prices to clearance level to sell units looks good and has sold a lot of Kindle's, but likely explains their shrinking margins.
I think they will do very well with the Fire. From a cost standpoint I bet they are right at breaking even on hardware sales from the start and those will go down quickly. Their money maker is books, which will do well. Video will be hit and miss but they will kill it on book sales. If they keep expanding their video to be an actual competitor to netflix then all the better but as it is it's a novelty at best.
The Amazon Market is darn good. Free app everyday and a lot of them are actually really good apps. Availability to what's on the Google Market is pretty good especially for good apps that you actually will want. I'm not seeing that as a massive negative.
The Amazon Market is darn good. Free app everyday and a lot of them are actually really good apps. Availability to what's on the Google Market is pretty good especially for good apps that you actually will want. I'm not seeing that as a massive negative.
I am not seeing how Amazon can entice enough people to get Fire.
Fire does NOT have exclusive book content
Fire does NOT have enough exclusive video content
Fire does not have enough exclusive app rights to make it compelling.
Bottom line, there is NOTHING one cannot do with any other Android or iOS product that Fire can, and apart from price (which can also be challenged by, say, Acer of Asus) it has nothing special.
Do a search for Android tablets, you get:
Vizio VTAB1008 8" LED Tablet Computer 1 GHz
$151 online
Because of Amazons clout, Fire will sell well, but not even come close to threaten iPad, more likely endanger other book readers instead.
I'm not sure what "threaten iPad" means. Is this a race where the brand that sells the most "wins" and everyone else "loses"?
Amazon is apparently on track to sell 5 million Fire devices in the fourth quarter. Those sales don't necessarily come from people who would purchase an iPad if the Fire were not available. Just as the iPad expanded the market by attracting people who didn't need or want the functionality (and price) of a laptop, the Amazon Fire is likely to do much the same for those who don't want to pay $500-$900 for a device that handles web browsing (potentially very quickly if the Amazon browser lives up to its claims), email, streaming video/audio, and reading.
You're certainly correct that other e-Readers will take a hit from the Fire and B&N is poised to try to compete with it. Likewise, other low priced tablets will have a difficult time competing with Amazon's brand name. But just because the Fire doesn't outsell the iPad doesn't mean it's not a success.
Amen. I'm tired of people who are all "the company I like is going to beat the company you like".
Agree, but the bottom line is the definition of "success".
If defined by sell though to consumers of about 5 million in 1st Q, then it does have a good chance to do that by Amazons powerful marketing.
If defined by profits, then the chance of success is much, much less certain. Already Amazon has taken a huge hit with Fire in R&D costs, and now it is investing $$$$ millions in advertising. They are betting huge and spending a LOT of money on it.
Meanwhile their is no question on success with iPad. By far best selling AND huge profits.
The REAL crux of matter is industry perception.
It seems a lot of industry people are touting Fire as an "iPad Competition", which implies "good as iPad".
When a customer is expecting an iPad experience in a $199 device, chances are they will be sorely disappointed.
Then again, people are gullible and buy it because Amazon said so.
I am predicting OK sales.
Well, no. The "real crux of the matter is (not) industry perception." A miniscule portion of consumers read what "industry people" have to say about products. That's true of most products but it's especially true of tech products.
The "real crux of the matter" is customer satisfaction. If Amazon provides a device that provides 80-90% of the functionality of an iPad at 40% of the price, the Fire will be a success.
I think that is an iPad1 problem because my iPad2 charges fine from my MacBook pro USB port while streaming Internet radio to my airport express and displaying photos on screen with a slide app. In fact I rarely use my plug in charger.
the real crux of the matter is the Fire doesn't and it won't provide 80-90% of the functionality of the iPad. I'm sure it will play angry birds though, so it's got that similarity going for it. In reality the Fire will provide about 40% of what an iPad offers.
Web browsing, music, books and periodicals, streaming media, calendar, and email support. What the Fire won't provide is a camera, much less two cameras. Nor will it have built-in 3G access to the internet. Neither does my iPad. It will, however, be able to use the same mifi hotspot for 4G/LTE access I use for my iPad. And in addition, the Fire is significantly more portable (30% lighter) and provides access to a large media library, a huge bookstore that dwarfs iTunes, and free downloads of best sellers once a month for $79 per year.
Of course, a Kindle Fire is not as satisfactory a content creation device as an iPad. It certainly won't substitute for a laptop. But the iPad falls short in that area as well. And while the iPad offers only one keyboard choice, the Fire will offer several, including SwiftKey, a significantly superior virtual keyboard. Along with that MS Office emulators such as DocumentsToGo will be available, just as they are on the iPad. Likewise for apps like Splashtop. And, oh yeah, there's F***h on a web browser that is likely to outperform Safari.
So the biggest check off for the iPad appears to be the camera. If you think that constitutes 60% of the value of an iPad, I suggest you look at a real camera. Its features will amaze you.
I have no intention of trading my iPad for a Fire. But for millions of consumers who don't need or want the features the iPad offers, the Fire is to the iPad as the iPad is to a notebook computer, a significantly less expensive alternative that provides about 80-90% of the functionality at 40% of the price.
thanks to Floating Bones for the edit correction.
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I believe you meant to say "the Fire" here.
Any books in the Amazon bookstore can also be downloaded and viewed on an iPad. I have a hard time understanding how that's an advantage for the Kindle. Can you explain?
If you have an iWork document, creation of long documents is clearly best-suited for a laptop. On the other hand, short edits/corrections is just fine on the iPad and even small edits work just fine on the iPhone or iPod Touch. Cloud services will seamlessly push updated documents to all computers. iWork is used to edit documents on all machines -- something that Amazon can't even remotely hope to compete with.
Why would you think that? Just as with all iOS devices, any Flash interpretation will happen on a remote server.
Not exactly. I'd say the biggest check off is Apple's consistent approach to content creation, editing, and delivery: all the way from laptop to iPad to iPhone/iPod Touch.
Apple is already promoting that seamless interoperability in their iCloud TV commercial.
Yes, I did mean to say "Fire," not "iPad."
Amazon just added a free lending library function to its Prime membership package. That library is expected to cover a substantial portion of the best seller list.
I don't do extensive editing on my iPad but the same apps that enable me to edit MS Office documents on the iPad are available for the Fire. I don't use iWork apps. Neither do more than 95% of those who edit documents.
Where we differ is your belief that integration of Apple's devices from iPhone to iPad to their lines of computers is a major advantage from a consumer point of view. But if Apple were counting on that to be a significant feature of their strategy it would be inherently limiting. The fact of the matter is that the vast majority of computer users do not use Apple computers and that is not changing significantly. Yes, Microsoft share of laptop and desktop computers has declined...by about 4% over the last decade. So now they're only at about 90%.
I realize that Apple fans don't like to think about what a small slice of the overall computing environment the brand occupies but I've been hearing for 30 years that Apple is going to take over the world. It ain't happening. Niche markets and niche products, yes. But portable computers still outsell tablets by 5 to 1 and 90%+ of those machines run Windows.
Wow, I had no idea the Fire had 3G capability, GPS, 16-64gb of dedicated storage space, camera's, a mic, gyroscope, Bluetooth capability, over 100,000 dedicated apps, the ability to wirelessly project your screen onto any tv, and so on. Yep. I guess you are right, it does provide 90% of what the iPad does. Insert roll eyes here and end sarcasm.
What the Fire actually does is surf the net, allow for approx 6gb of onboard storage, play a few games and read books. That is the extent of it. This is fine for those that want just an ereader and the ability to surf the net, but not much else. People will buy it for this, no doubt, just like many will return it because they thought they were getting something like the iPad and then the disappointment set in.
And you can make all the claims you want about how you can just take a wifi hotspot with you since the Fire has very little on board storage, and that's great, right up until you max out your data plan. And of course, it doesn't help you at all when there is no wifi capability, like say at 33,000 feet or in the middle of States like Nevada or Wyoming on a road trip.
One of these days you'll wake up and realise that there is a reason so many manufacturers and companies want to emulate Apple and it's products. Take a look and see how many companies are trying to replicate the iMac and MacBook Air. It's sickening.
Oh, I'm sure that you will be wrong. After all, even the last generation of Kindles that were only eBook readers starting at 139 bucks were already major successes. People actually still buy single purpose devices -- BECAUSE they are single purpose tools.
But the Amazon Kindle Fire runs Android - that's on OS with hundreds of thousands of applications available. The Kindle Fire might not connect to the official Google Market out of the box, but Google Market is a downloadable application and Amazon also has an own app store that has many exclusive titles in its portfolio.
So the Fire is NOT just a gadget to shop on Amazon, it --is-- a real tablet computer.
It's also just the first "tablet Kindle"; there will be other models soon and rumor has it that the next generation will also be available with a larger screen and probably better hardware specs.
The Amazon Kindle Fire is the first serious competitor to Apple's iPad ecosystem. Amazon has the content, the ecosystem and the muscle to push this device.
In a way that the Playbook, xoom, tab, transformer (gadget of the year BTW) and countless other haven't been, why do you think the Fire will be any different?
Because Amazon is linking it closely with something everybody already uses; i.e. Amazon.com.
People love Amazon and there are probably millions of Prime members--many who take advantage of their free streaming movies and TV shows and will now buy one of the Kindle devices to take advantage of their new Prime library program--many will opt for the Fire. Amazon is a lot like Apple in their ability to figure out what people want. I just don't see this as an either/or type of situation. The iPad is the right device for some, the Kindle for others--no reason both can't happily coexist. 
I was intentionally comparing a Wifi iPad to a wifi Fire. If you want to compare the Fire to a 3G iPad, the Fire is only 31%, not 40% of the price of the iPad. Of course, even on boards like this where heavy iPad users congregate, about half of all owners have wifi only iPads.
But if you want to increase the potential functionality differences between the two devices, that's fine. But you also have to increase the gap between the cost of the two devices. (i.e. $199 vs $630)
Of course, adding a mobile hotspot to a Fire adds the same web access functionality that it adds to a wifi iPad and at the same cost. And if you exceed your wifi data allowance? You pay for more. Just as you do with an iPad.
As far as GPS is concerned, it's true that an iPad has that feature while the Fire does not. On the other hand, those who have Android phones have a better GPS already in place than either the iPad or the iPhone offers. (Mine offers spoken turn by turn directions, for example.) And if I'm traveling, I have very little use for redundant GPS on my iPad.
That brings us to the functionality provided by the microphone. A nice little bell/whistle but no more an essential function for most users than a camera. A gyroscope? TV projection? More bells and whistles that fall into the 20% advantage of the iPad's functionality over the Fire.
You're correct that the iPad offers far more on-board storage than the Fire. But Amazon is counting on their cloud-based infrastructure to make up for that difference. And in that area they're far ahead of Apple's iCloud. (Netflix streaming for example is already supported by Amazon's servers.) Amazon doesn't have to build out server capacity. It's already there.
And you're correct that out in the middle of the Nevada desert one might appreciate the onboard storage of the iPad. There's a reason that wifi isn't easily available there, however. It's because nobody is there! The next time I climb K2 I'll definitely take along my iPad to watch movies. But if it's only Mt. Rainier, I could stream movies on a Fire.
For the tablet "power user" there is no question that the iPad provides essential functionality that the Fire does not. But it's also true that for someone like me the iPad cannot possibly provide the features I need by itself. I have to have a powerful laptop. That doesn't make the iPad worthless. It provides about 80% of the functionality of my laptop at about 40% of the cost. I cannot get along without that missing 20%, but many users (as shown on this board) can. The same is true of the Fire in comparison to the iPad.
And not one of the above devices was originally sold at $199.
The Fire may be 40% of an iPad if you like, but a lot of people only need that 40%. And in this economy they'll prefer spending $200 as opposed to $500. That's the bottom line. And the upcoming Nook Tablet with Hulu Plus and Netflix is only going to give more incentive to Amazon to bolster their App Store.