Why is Amazon selling a $79 Kindle with ads and no touch interface? The answer is families.
Amazon’s device lineup is bewildering and cluttered to many Apple-followers because it tries to deliver something for everyone. As John Gruber pointed out, this approach is fundamentally different from Apple’s. Apple has never tried to make something for everyone. Instead, Apple is focused on high-margin phones, tablets, laptops and PCs, leaving competitors to compete on price in a race to the bottom of margin-constrained markets. While this approach may lead to the ultimate demise of certain hardware manufactures like RIM, Dell and HP, Amazon seems to be immune because it is playing a different game altogether by producing low-cost devices solely as a means to selling content. With that in mind, Amazon’s Kindle strategy is easier to discern.
The Kindle Touch is Amazon’s new flagship device for readers. Amazon took much of the criticism of the 3G to heart, by dispensing with virtually all of its buttons. I tend to agree that Amazon went too far by eliminating the page-turn buttons, but keeping the buttons used on the 3G, which were too easy to press inadvertently, would not have been an acceptable solution. Instead, Amazon took a page from the iPad’s playbook by getting as much of the user interface out of the way as possible so readers can focus on the content.
It will be interesting to see what becomes of the Kindle 3G and DX. It is probably safe to assume that the 3G and DX remain in the Kindle lineup for the purpose of clearing out existing inventory and will be phased out as the inventory runs off, but their survival does undercut the message Amazon seems to be trying to deliver with the Touch.
The Kindle Fire extends Amazon’s content-centric approach beyond books, opening up new movie, television and app revenue streams. It will be difficult for other Android tablet and ebook manufacturers to compete with the Fire without major content deals, but the additional capabilities of the iPad should protect Apple from significant iPad sales erosion.
The new $79 Kindle is a bit of an oddball. It fits the dedicated reader model staked out by the Kindle Touch, but has no touch interface. Thus, to type, users must painstakingly peck out words on a virtual keyboard using a kludgy d-pad.
More than any other Kindle, however, the $79 Kindle demonstrates Amazon’s commitment to getting Kindles in as may hands as possible. Amazon is selling razor blades, not razors. Because reading is a relatively time-consuming, linear endeavor, the Kindle does not lend itself to sharing among family members. By fielding a low-cost option, Amazon makes it more affordable for families to own multiple Kindles. Parents will buy the $79 Kindle with the good intention of encouraging their kids to read, knowing that it is no good for gaming, texting and other distractions. And if reported book buying trends hold true for Kindle owners, those parents will end up buying even more books for their kids than they otherwise would have.
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