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How Apple Could Be Burned - or Warmed - by Fire

By Chris Maxcer MacNewsWorld ECT News Network
Nov 10, 2011 5:00 AM PT

The surveys comparing the hotness of the Amazon Kindle Fire to the Apple iPad 2 are hitting us in full force: a pair of them seem to show that the Kindle Fire, with its 7-inch screen and friendly US$199 price tag, seems to be digging into Apple's mountain of iPad mindshare.

How Apple Could Be Burned - or Warmed - by Fire

"Surveys, smurveys," you say. "Who cares about a dinky Kindle Fire? It doesn't even have a camera, not to mention FaceTime. And it definitely doesn't have the cool Apple logo or a big screen, and it doesn't work with everything on my iPhone."

I pre-ordered a Kindle Fire anyway.

Traitor!

I wish I could say that I ordered a Kindle Fire simply as a market research tool, that I merely need to keep abreast of the Apple competition. Nope. I ordered it on purpose, and heck, I might even use it well into 2012. What am I thinking?

Back to Those Surveys

In one survey by ChangeWave and RBC Capital Markets, a poll of 2,600 respondents seems to show that 26 percent of Kindle Fire buyers are delaying or have put on hold their planned iPad purchases. Beyond the attention-grabbing headlines this nugget creates, it's not surprising: Most people who intend to buy a tablet at least briefly consider the iPad 2, even those who hate Apple. The iPad 2 is just that good.

Then there's the lack of risk: What if an Amazon customer -- who's generally fairly loyal and happy -- bought a Kindle Fire and didn't actually like it much? If a return is out of the question, there's always eBay. Sell for a $150 (or more) and eat a $50 loss. That's not a lot to risk for a test run on a tablet that may or may not become an integral part of your life.

Another survey by Retrevo is a bit more inflammatory to die-hard Apple fans, posing the question, "Would you consider buying the recently announced, 7-inch Android tablet made by Amazon priced at $199 instead of a 9.7-inch iPad 2 this holiday season?"

While 12 percent said they would still buy the iPad, 44 percent said they would consider the Kindle Fire. Another 44 percent, though, said they don't know enough about the Amazon tablet.

Of course, the OS on the Kindle Fire is really more of a highly customized version of Android, so it's not like you can get a Fire and then go play in the Android ecosystem willy nilly. The Fire is designed to help you consume Amazon's content and apps curated by Amazon's Android app store. It's not unlike how Apple asks consumers to stick with the Apple universe by making it a pain in the butt for everyday consumers to unlock their devices.

Why Look at the Kindle Fire?

Aside from never hearing a single person say they actually regret buying any of the Kindle e-readers, how could I even consider shelling out for a Kindle Fire -- especially when I have an iPad 2 sitting right on my desk?

Lots of reasons, actually. Like I said before, even if I make a horrible mistake, I can likely offload a lackluster Kindle Fire pretty quickly with minimal damage to my bank account.

But what if the Kindle Fire is really great? What if Steve Jobs was wrong and a 7-inch form factor in a tablet works great?

With the Fire, I know it's a primarily a media consumption device and not a post-PC tablet. Seriously, the Kindle Fire is about watching movies, TV shows, reading books, and playing games. Sure, it has a silky Web browser, email integration, and it will let you read your Microsoft Word and PDF documents.

But who is buying a Kindle Fire for its ability to get real enterprise-class work done? Not me. I'm buying it as a device that I leave around the house and let anyone use. A slobbering kid with a runny nose and sneeze comes over to visit? No problem, kid, knock yourself out with a bunch of free TV shows (with Amazon Prime Membership, which is a decent deal in its own right) and "Angry Birds."

Then there's the opportunity to read an ebook for free each month on my Kindle Fire, and if the iPhone and iPad have taught me anything about my personal behavior, it's that I now prefer to read e-books over print. (I have mixed feelings about that, but my personal stats and buying behavior don't lie.)

As for my iPad 2, there's a little problem that Apple hasn't managed to anticipate or fix: I do enough real work on my iPad 2 that I don't like other people using it. It's partly about needing some privacy, partly about some confidentiality, and partly because I don't want anything screwed up, moved or changed. The iPad has no ability to switch users. I'd be fine with handing it over to a kid for a couple of hours if I could switch it out to a guest user account. But I don't have that, so here comes the Kindle Fire.

Where There's Danger, There's Opportunity

What does this mean to Apple if a die-hard Apple-buying freak breaks ranks and buys an Amazon Kindle Fire? It's bad, very bad. And yet, it's also good.

It's bad because hey, it's competition, and competition has the potential to reduce revenue and reduce mindshare. What's worse is that Amazon is selling an ecosystem -- like Apple, it's selling it's own wonderful walled garden of green goodness. If you buy into Amazon and become a Prime member, you get gobs of streaming TV, e-books, and who knows what else Amazon will throw in to sweeten the deal and lull you to sleep. Once hooked on Amazon and a Fire, changing to an iPad and iOS becomes more difficult.

It's also good. There's actually quite a bit of upside for Apple. Having a minimally featured Kindle Fire will give Apple an opportunity to help consumers understand what they're missing compared to an iPad 2 (and eventually in 2012, an iPad 3). Like I said, if anyone wants to do real work, the iPad 2 clearly comes out on top. At the same time, for consumers, a 7-inch winner might demonstrate to Apple that a mega iPod or iPad mini is a good idea ... in which case Apple lovers might get a new form factor.

Then there's publishing and media rights holders. If Apple doesn't seem to hold all the keys to the mobile content consumer kingdom, they might not freak out so much over working with Apple. In which case, Apple gets to offer us consumers more content in more ways. If content publishers believe Apple is the only game in town, there will remain some natural resistance to letting Apple get any so-called "control" over their products. With real mass-market options, consumers can show everyone what they prefer -- and how.

Meanwhile, it's great to lead a product category and all -- and even dominate it -- but to hold a lead for years to come, that takes competition. And while I'm not an expert in competition, I do know one thing for sure: Competition can lead to truly exceptional performances. Better products, better features, better pricing, faster innovation.

And who doesn't want that?


MacNewsWorld columnist Chris Maxcer has been writing about the tech industry since the birth of the email newsletter, and he still remembers the clacking Mac keyboards from high school -- Apple's seed-planting strategy at work. While he enjoys elegant gear and sublime tech, there's something to be said for turning it all off -- or most of it -- to go outside. To catch him, take a "firstnamelastname" guess at Gmail.com.


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