Amazon's Kindle Catches Fire
The Amazon tablet has finally arrived. The Kindle Fire is a small and relatively stripped-down tablet, but while it may not be capable of matching an iPad feature for feature, its $199 price could draw a new wave of buyers into the tablet market. Meanwhile, Facebook takes another punch, Microsoft bags another Android device maker, and a big shark starts checking out Research In Motion.
10/01/11 5:00 AM PT
Amazon has launched what may become the first real threat to Apple's iPad. The Kindle Fire has been anticipated for many months now, but this week Amazon officially took the lid off and showed everyone what it's really about.
For a device that could eventually loosen the iPad's stranglehold on the tablet market, the Fire's spec sheet doesn't exactly match that of an iPad 2. It offers just 8 GB of onboard storage, WiFi but no 3G or 4G wireless access, no camera, no microphone, no gyroscope -- and it's much smaller, at just seven inches. That's a big contrast to a lot of the other tablet contenders out there, which often try to either match or outdo iPad in terms of size, memory, storage, speed and wireless data options.
But what most of those other tablets can't compete on is price. Too often, other tablets will land somewhere north of the $500 line, and for a lot of potential buyers, that's just too much to ask, regardless of whether you're selling a Xoom, a Galaxy, an iPad or anything else.
That's where Amazon saw an opening -- it's selling the Kindle Fire for $199. No, it doesn't have the iPad's specs and swagger, but it has features where they count: a great bookstore and e-reader, streaming video, a dual-core CPU, an app store courtesy of Amazon itself, a multitouch display with decent resolution, and a nice-looking Web browser called "Silk" that puts some of the work on Amazon's own servers, sort of like Opera.
The Fire really looks like it's designed for media consumption rather than creation. That's something people say about the iPad all the time, but the Fire seems purer in its purpose -- this is a real Amazon media spigot, and for less than half the cost of an iPad, that might be a really good deal. It's a low-commitment tablet. It can't do nearly as many tricks as the iPad, but you don't pay nearly as much for it. There are people out there who want some sort of tablet gadget, but they look at one that costs $500 and think, "Do I really need to spend half a grand right now? That's like getting a whole new computer." Maybe sometimes they'll convince themselves to pay up; other times they figure they'll just wait and see what else comes along, and they become part of a mostly untapped region of the tablet market.
True, Amazon isn't the first to slap a super-low price tag on an Android tablet. There's a whole wasteland of dirt-cheap offerings out there, and it's safe to assume they're all pretty much awful. I haven't tried a Fire yet, but the early reviews indicate it's well-put-together and plenty snappy.
From what's been seen so far, the Fire looks like a decent yet scaled-down tablet at a scaled-down price. It's not necessarily an iPad killer, because it's nowhere near as versatile as an iPad, but it seems like it's kicked in a new niche for itself: a cheap Android tablet that isn't a piece of crap.
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Fear of Fire?
The launch of the Fire happened to coincide with some moves from Apple that got people wondering whether the iPad maker's been seriously shaken up by Amazon's market entry. Days before the Fire was revealed, JPMorgan Chase reported that Apple had seriously scaled back orders for iPad parts. That suggests a strange slowdown in production right before the beginning of the holiday season, when Apple sales traditionally go critical mass.
Apple didn't comment on the report, but is it possible the undisputed heavyweight champ of the tablet world flinched?
Well, sure, anything's possible. But the notion that a brand-new tablet could scare Apple into cutting one of its biggest moneymakers by a quarter has raised serious doubt. Aside from questions about the veracity of the information itself, there are lots of plausible explanations that have nothing to do with Apple going fetal with fear.
Maybe Apple just got done playing hardball with its competitors by overbuying parts one quarter just to make them scramble, so now it needs to scale down orders to alleviate the surplus. Or maybe it's swinging production from China over to Brazil. Or perhaps it's taking the lousy holiday economic outlook to heart and protecting itself from what may be a bad season for everyone across the board.
And of course it's possible to read between the lines of every bit of Apple news to find hints about future products. Maybe it managed to finalize a new version of the iPad way sooner than expected, just in time for the fall season, so now it's scaling down orders for old iPad parts and scaling up orders for new stuff we haven't even seen yet.
Just Imagine the Theme From 'Jaws'
Research In Motion has had a particularly tough year so far, and things are getting so stinky there that activist investor Carl Icahn is reportedly sniffing around.
Icahn's known to go after struggling companies that he thinks have failed their shareholders. He buys his way into a position of power, then aggressively pushes for major changes that he thinks will pay off for himself and the rest of the investors.
In this case, those investors may welcome his arrival. One major RIM stakeholder, Jaguar Financial, has already called out the company for letting investors down. And when rumors of Icahn's interest first surfaced, RIM shares jumped about 6 percent. They're still just rumors, though -- neither Icahn nor RIM is confirming or denying.
From the point of view of RIM's leadership and its customers, though, the idea of Icahn buying his way in doesn't bode well at all. His business is to squeeze a company for shareholder profit, and even though he doesn't always get his way, sometimes that means squeezing a business right into oblivion. Sometimes a company under his influence is sold outright; other times it's hacked to pieces and chewed up bit by bit.
Though it's unconfirmed, Icahn's interest in RIM would be plausible. The company's flagging after three consecutive quarters of disappointment. Investors are questioning its strategy at every turn, new products don't generate as much buzz as the competition, developers and users are anxious for it to get moving on its next generation of software, and its shot at the tablet market with the PlayBook looks shaky.
In fact, just after the Icahn rumors made their rounds, Collins Stewart analyst John Vinh suggested RIM's about ready to call it quits on the PlayBook, which was introduced earlier this year. Citing anonymous sources at manufacturer Quanta, Vinh said a large number of workers had been laid off from the factory that makes the tablets.
RIM has denied that it's backing away, and honestly it does sound a little like that iPad rumor going around earlier -- that Apple was so scared of Amazon's tablet that it pulled back production right before the holidays. Maybe in both cases, it's just a matter of someone reading too much into something when things really are business as usual.
Then again, RIM is in a much different place than Apple right now.
Every Click You Make ...
Facebook is used to taking a beating over privacy issues. Critics say the site's too cavalier with how it throws your data around, that it makes its privacy options too hard to find and too confusing, that it's an overall heavy-breathing creep of a website that needs to work out its boundary issues.
Despite all that noise, though, the social network just keeps growing, becoming more popular and making more money. And if Facebook does have as many privacy holes as those critics say it does, in most cases, the user does bear at least some responsibility. Sure, it might be pretty rude to share someone's information with a third-party app maker without that person's express permission, but the user did willingly tell Facebook that info in the first place. You're not Facebook's friend, and unless you buy ads, you're not its customer either. You're more like Facebook's product -- you are what it sells. And the more info you give it, the better a product you are, so product beware.
But what Facebook is being accused of doing this time ... well, it goes beyond fiddling with the private info users voluntarily put on the site. It ventures into users' non-Facebook behavior -- stuff they do after they've logged off the network and are under the impression Facebook is no longer watching.
You may have noticed that while you're logged into Facebook, the network seems to know what other sites you're visiting. Lots of sites use that Facebook Connect widget, for example. But what you may not have known is that Facebook apparently can also know what other sites you're visiting after you log out.
That's the conclusion reached by hacker and blogger Nic Cubrilovic, who said Facebook uses an assortment of browser cookies to keep tabs on users' online activities even after they sign off from the network.
Facebook has denied tracking users across the Web, but it confirmed those "logged-out" cookies do exist. The network said they're used for anti-spamming efforts, security safeguards, kicking off underage users and identifying shared computers. Eventually Facebook changed the behavior of one particular cookie -- one that kept reporting to Facebook until the browser was completely shut down -- so that now it's killed on logout. But several other tracking cookies still exist.
It's one thing for Facebook to follow users when they're logged onto the site. That's Facebook's own house. But to find out you've been stuck with a bunch of tracking cookies that could trace your steps after you've signed off? Yeah, it's the Internet, and the wise and the smug will tell you nothing's really very private -- everyone's browser is already crawling with cookies that tell everyone everything. But when you consider all the other stuff Facebook knows about you, and that it could possibly combine that with your full browsing history, it just feels wrong and invasive.
The reaction to the news even reached Congress. The two co-chairs of the Congressional Bi-Partisan Privacy Caucus have sent a letter to the U.S. Federal Trade Commission in which they express their concern about the issue and complain about remarks made by a top Facebook engineer, who said it'll "take a while" to fully correct the problem.
So if, despite Facebook's denial, you don't like the idea of being watched across the Web -- but still wouldn't think of ever quitting Facebook -- then try clearing your cookies after each visit, using a browser with a private mode like Chrome's Incognito, or just designating one browser on your computer as a quarantined Facebook-only browser.
Microsoft's Big Score
Microsoft's campaign to draw a profit from archenemy Google's mobile operating system has bagged its biggest prize yet: Samsung, the largest Android smartphone maker in the world.
Microsoft's been working its strategy for many months now. It combs through Android and picks out pieces of the OS that may infringe on Microsoft patents. Then, instead of walloping everyone in the Android universe with a giant lawsuit, it approaches a maker of Android devices with its big list of grievances and tells them, "look, you're selling stuff with software that we think rips us off. Either we end up in court over this, or you do some majorly expensive engineering to work around the problems we see, or you can protect yourself by signing this licensing deal."
Companies like Motorola and Barnes & Noble have turned down Microsoft's offer, but often enough, companies do opt to sign on. HTC, Acer and Viewsonic are among a few who are on board, and now they're joined by Samsung.
From Microsoft's point of view, the licensing deal is a pure win, of course. Samsung's Android phones, like the Galaxy S II, are big sellers, and now Microsoft makes money each time another Samsung Android gets its wings.
But the deal's probably causing some anxiety for Motorola. It's the biggest holdout so far, and it's in the process of being purchased by Google itself, so no wonder it's been the toughest one to crack. Now that Samsung's been drawn into the fold, Motorola will get Microsoft's full focus, and the two have already been tangling in court for months.
As far as Samsung is concerned, it seems to be in an odd position on this one, but it's not necessarily uncomfortable. The company makes phones with lots of different OSes, including Microsoft's Windows Phone, so its loyalties have always been spread. In addressing the licensing deal, a Samsung rep acknowledged Microsoft's intellectual property rights right before boasting about the company's success with Android.
Others at Samsung apparently haven't been quite so eloquent about it. The Korea Times quoted an anonymous Samsung executive as saying the company can't rely on Google, so Samsung moved to address Android's IP issues on its own. The source also took a dig at Google's move to buy Motorola Mobility, implying it would be unhelpful to Android device manufacturers in general.