2
Oct

Jeff Bezzos took last september the 28th the role + image of Steve Jobs in a Apple like event, to introduce what he termed as a new service: The Kindle Fire.

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Thousands of articles have been written since then. They basically analyze the step taken and attempt to respond to these questions:

What is the Kindle Fire? Is it a new low cost tablet? A new concept? Or an Apple killer?

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Before jumping into the question, let me go through what I consider the ksf of Amazon:

- Customer Experience through closed ecosystems

- Collaboration

- Brand Loyalty

- Differentiation


The Customer Experience is key for them . As I explained in previous posts, Amazon is providing with an end to end experience by controlling all the steps of the value chain. The result is that the customer deals with Amazon from beginning to end, from selecting the items to be purchased to receiving and enjoying them. And the result is  a straight, simple and enjoyable experience, with no surprises at all.

Brand loyalty is a natural combination of this customer experience + the fact that Amazon is evolving and providing its customers with whatever they may need to be entertained (no matter if we are speaking about books, music, magazines, films, etc).  The latter, the width and update of content, is critical for, you may be tempted to purchase in other store if your natural supplier is outdated…  And being able to be up to it, had required Amazon to rethink their business model and launch a B2B business model where content providers and suppliers fit in a sustainable way.


And last but not least, they need to attain Differentiation. Great customer experience + collaboration + brand loyalty do not seem to be enough if you are competing with an industry killer like Apple. And here is where the last piece of the equation comes. In Bezzos´s words:

There are two types of companies: those that work hard to charge customers more, and those that work hard to charge customers less. Both approaches can work. We are firmly in the second camp.”

Nice words, I know, but I really feel that Amazon is trying to be up to them. When all competitors (call it Samsung, BlackBerry or HP) are trying to launch an improved “me too” , Amazon has sticked to its basics and launched something consistent with their NDA.

So, what is the Amazon Kindle Fire? -Is it a new low cost tablet? A new concept? Or an Apple killer?


Could be all of them , and could be none. But to me, it is more about smart and differential follow up from a company obsessed with their customers and competitive principles.

Think Different!!!

Ignacio Gafo

PS: Sorry for writing again about Amazon (I realize that I did so two weeks ago) but after exchanging around 30 posts at Facebook with my friends Daniel Cuñado and Jorge Gomez, I could resist writing this down… Ths Daniel and Jorge to make me think further and dfferent!!!

Comments

Joe Morrison October 3, 2011 - 6:59 am

Hey Nacho. Always great to see my favorite B2B marketing professor out there on the Interwebs and talking about enjoyable stuff like gadgetry.

My thoughts? The Kindle Fire is the first product to really move tablets toward their more appropriate price point. As a consumer, I never bought an iPad because I couldn’t bring myself to pay a bunch of money ($499 at minimum in the US, much more in the EU) than I’d have to pay in order to buy a far superior PC, which could do a lot of things that the iPad couldn’t, like watch flash videos, utilize computing power, and play serious videogames. So Amazon’s recognition that they should be selling a tablet (which is not a full PC) at a price point like $199 makes a lot more sense in the mind of the consumer. After all, you’re paying less for a device which, quite fairly, offers less performance. Although I’ll admit it isn’t likely to be the fashion statement that the iPad has revealed itself to be; however, let’s leave the “gadget chic” discussion for another time.

I agree with your assessment in that this is a brilliant move on Amazon’s part. It closes their content ecosystem and puts them in the same sphere as Apple–content + device — and maybe even in a better position, since so much of Apple’s content is tied to a more exclusive loop. I know the Appletites out there will argue with me, but we should all admit iTunes is way better on an apple device than a PC, and much of it requires an iPod. Amazon’s content is more cross-platform, it’s content plus devices unlocked for the masses.

Nice article, and I’ll trade you back. Here’s another good article on the Kindle move, the best one I’ve read so far::

Amazon open fire; the new Kindle is a tablet for the masses. http://www.slate.com/articles/technology/technology/2011/09/amazon_opens_fire.html

Think Different! See you, Nacho, and have a glass of glorious Spanish wine for me!

Rodrigo Ceron October 3, 2011 - 12:53 pm

Joe Morrison for your link to Amazon´s Fire description!

It seems to me that Amazon Fire is concentrating on the Amazon UI & Cloud proposal; in other words, on the Amazon customer experience as a whole. As time goes by, niches become more and more important and Amazon has a unique customer base. WHy not improve their proposal? Will Kindle Fire help?
They are already stating they are not interested in the iPad market share, but they want to improve their already existing core business by taking it up a notch or two. If they can create a unique relationship between their web services and the tablet, (something others won’t be able to do, because they control the whole value chain), why not?
Let’s face it, Apple’s success has something to do with their content and their hardware, but most importantly, HOW they go about it. This is where most other companies fail – will Amazon be able to do the same in their own turf? I hope so, this puts pressure on everybody else and it’s us (the consumers) who benefit…

pablo esteves October 3, 2011 - 1:24 pm

Wait, but it is new concept. I have to agree with my man Joe, I think the Amazon tablet is a true disruption and is moving the tablets in the correct direction both in price and market. Granted,Joe’s “Appletites” will say: “how could the Kindle Fire kill the iPad? The iPad killer, no way! It has no camera, no microphone, just 8 GB of memory, less “cool” apps to waste time on, and no mobile broadband. Think of Clay Christensen’s Disruptive Innovation model (http://hbr.org/web/tools/2008/12/disruptive-innovation-model-explained).

Amazon is spot-on with one of two possible criteria for disruptive innovation. A low-end competitor (Amazon) introduces a product with a scalable technology (“basic” first version of Kindle Fire) or business model advantage (Joe’s cross platform ecosystem, Amazon is using content to subsidize the hardware.) at its core (Amazon’s Customer Experience through closed ecosystems) that has the potential to displace the incumbent (Apple).

Cameras, microphones, bells and whistles, those can be featured in the next version, probably early next year after early adopters (like me)buy, try and praise the Fire. Also Amazon’s approach to the Android Store is what Apple has for its own, that’s why Android loves Amazon, they brought order to the chaos. There is scalable technology at its core (a true advantage) that the present-generation iPad is behind the extensive use of cloud technology. Amazon can get away with shipping a device that has only 8GB of memory to begin with. Regarding the content subsidizing the hardware, I could foresee an almost free tablet from Amazon in a year or so.

For a time both Amazon and Apple will thrive. They are positioned differently. Apple stealing chunks of market from PC’s, and Amazon catering for customers who cannot afford an iPad and would much prefer the Kindle Fire to having no tablet at all. As soon as Apple overshoots the requirements of customers in terms of performance, and Amazon catches on with that minimum requirements the price starts to factor in. Bye bye iPad, welcome Fire.

How Apple will react? iPod story all over again, iPod mini, nano, touch, shuffle, etc. And you know what? I bet they already have it in the product line, ready to roll early next year, so they can maybe say bye bye Fire.

What you think?

Bill October 3, 2011 - 11:34 pm

The thing that is not so cool too,is the fact that here in the UK or mainland Europe you can´t purchase kindle fire. It took amazon years to introduce normal kindle to the European market and now that restart this with offering kindle outside of Europe.
At Marketing Agentur Hamburg they discuss the necessity to go multichannel and international, especially when countries like Germany are doing very well economically right now, beside being one of the powerhouses in Europe and global markets, I wonder why so few internet giants like Amazon, otherwise so smart, aren´t getting it here, what´s your opinion here?

Kevin November 29, 2011 - 8:39 pm

There is a really nice review of this great device http://www.androidtabletsreviews.com/amazon-kindle-fire-review/

Guerson December 13, 2011 - 9:59 am

its hard to say Pablo. Its not about the technical stuff (@Joe: watching Flash videos? Really? didnt you heard even Adobe is dropping the buggy mobile flash technology???). but about marketing and the market introduction. Hence, I agree with Bill. If your are not launching global, you will never even step the toes of Apple. To beat Apple, you also have to beat them not only in Marketing but in their Supply Chain as well. Good luck! So saying “bye bye” iPad is ridiculous, at least for the next 4-5 years.

I see here in Germany in every train station a wonderful poster about the iPad 2. When talking to normal people, they do know and want to have the iPad. Apple Retail! Can you just imagine an Amazon physical Store? (even Microsoft cant copy that). Thats all marketing, getting to mainstream customers minds. NOW! The brand is to strong to beat for now. Additionally the product is much much better and has already all on it (camera, microphone, etc). Apple can keep on improving the price and still make money. Why is Kindl Fire so cheap (besides been subsidized)? Cause is missing all features. I am not in favor of subsidized business model *cough* Google *cough* cause it makes you lose focus and become lazy when developing and bringing successfully consumer products to the market.

And at the end, its about network externalities. If you happen to have a mac (which is almost the only latop increasing sales every year) or you have an iPhone, you will never buy a kindl Fire. Or if you simple live outside of the US. :)
You will buy a Kindl Fire if you hate Apple, are an Amazon content customer, or as Joe, you are a poor American graduate from a top (50k€) business school, that can not afford an iPad (???). :)

Catalogo Easy December 17, 2011 - 8:25 pm

As time goes by, niches become more and more important and Amazon has a unique customer base.
Easy Catalogo

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