Photo: Brian Sawyer / Flickr

On the heels of plenty of press, the Amazon Kindle Fire tablet PC is poised to become the second-biggest tablet PC before the year’s end. This is according to a survey conducted by ChangeWave, who also found that year-on-year tablet PC demand more than tripled, and that demand for Apple’s iPad remained very strong.

Triple the tablet demand from last year

ChangeWave surveyed 3,043 North American shoppers to find out how many of them planned on purchasing tablet PCs within the next 90 days. Fourteen per cent of them responded ‘yes’. This is more than double the 6 per cent of respondents who had said yes when they were asked this question back in August, and its more than triple the 4 per cent of respondents who intended on buying tablet devices in November of 2010.

iPad dominates, Kindle Fire second

Unsurprisingly, most of those planning on purchasing tablet devices had intentions of buying an Apple iPad 2. A whopping 65 per cent of respondents said they would buy Apple’s tablet. This was followed by 22 per cent of respondents who indicated their intent of purchasing an Amazon Kindle Fire. Rounding up the top three – and way off the pace set by Apple and Amazon – was the Samsung Galaxy Tab, with 4 per cent of respondents saying that was their choice device.

None of the remaining tablet manufacturers managed to get more than 1 per cent of consumer interest from those polled – a very telling stat about how one company (and now, potentially, two) has a vice grip on the space.

Early promise

For the Amazon Kindle Fire, the early demand is promising. The Apple iPad 2 is established and its dominance has been this way since day one. If this ChangeWave survey is anything to go by, other tablet PC manufacturers have plenty of work ahead of them.

Photo: Amazon

On the heels of rolling out the Amazon Kindle Fire tablet, the folks at Citigroup say that the online retail giant is working on a smartphone scheduled for release in 2012. If this is true, Amazon would be a full-fledged competitor in the highly lucrative mobile devices space currently dominated by manufacturers Apple and Samsung, and platform owner Google through Android OS.

Supply chain research

Citigroup analyst Mark Mahaney issued a research note making the unexpected claims about the Amazon Kindle smartphones. ‘Based on our supply chain channel checks in Asia led by Kevin Chang, Citi’s Taipei-based hardware research analyst, we believe an Amazon Smartphone will be launched in 4Q12,’ he writes [via AllThingsD].

The thorough research report breaks down who would be involved in the manufacturing process, with FIH manufacturing the device and Hon Hai (who own the controversial Foxconn business) will be supplying components through their TMS business. Mahaney says ‘We believe the smartphone will adopt Texas Instrument’s OMAP 4 processor and is very likely to adopt QCOM’s dual mode 6-series standalone baseband given QCOM has been a long-time baseband supplier for Amazon’s E-reader.’

Price aggressive

True to Amazon’s recent strategy of competing aggressively on price – as evidenced by the dirt cheap Kindle e-readers and Amazon Kindle Fire tablet – Citigroup analyst Mark Mahaney thinks that Amazon Kindle smartphone will be priced aggressively, too. He predicts it could cost in the region of $150 to $170 to make one, and they may sell each unit very close on that price point. He writes: ‘For a normal brand like HTC, they need to price the product at US$243 to make 30% gross margin. If Amazon is actually willing to lose some money on the device, the price gap could be even bigger.’

It’s also widely expected that the Amazon Kindle smartphone will run on Android, with the online retail giant reportedly paying Microsoft a royalty for each unit sold. That Android patent licensing campaign is clearly going very well for the folks in Redmond.

Photo: adrian_kenyon / Flickr

In a lengthy Wired feature with Steven Levy, Amazon founder Jeff Bezos spoke about his company’s long-term strategy, its product initiatives, and the internet at large. What was particularly interesting were his feelings on software patents, with Bezos admitting that his company has been prone to take advantage of them, since they were the status quo, but would rather have them done away with altogether.

I’ll give you 1-Click shopping, you destroy patents. Deal?

Levy prompted Bezos by first speaking on Amazon’s own controversial patent – the 1-Click shopping patent the company was awarded. He asked: ‘Now, technology patents are so widespread that they’re seen as a real hindrance to creativity and innovation. Has your thinking changed?’

Bezos, somewhat surprisingly (or unsurprisingly, depending on your view), responded, saying: ‘For many years, I have thought that software patents should either be eliminated or dramatically shortened. It’s impossible to measure the toll they’ve had on the software industry, but on balance, it has been negative.’

Interesting take. Levy shot back telling Bezos that if it weren’t for software patents, his company would not have exclusive rights to the coveted ‘1-Click’ shopping tech. Bezos’ response? ‘If that were the price of having a dramatic reduction in software patents, it would be great.’

Smartphones to blame

Amazon founder Jeff Bezos’ take on technology and software patents comes at a time where the smartphone industry is characterised by patent litigation as much as it is characterised by new handsets being released and a rush for customers’ hard-earned pounds and dollars. Some companies like Microsoft have taken full advantage of their strong mobile device patents, while others like Google and Android handset developers have been burdened by comparatively week patent holdings.

With Amazon entering the tablet PC battle, they too expose themselves to even more patent litigation than they’ve had to previously deal with. The problem, ultimately, is that this litigation stifles innovation in an industry characterised (and defined) by remarkable innovation. It’s good to know that Amazon founder Jeff Bezos, and hopefully some other tech titans, think the system should be thrown out altogether.

Photo: andrewchx / Flickr

The hotly anticipated Amazon Kindle Fire tablet PC is expected to sell by the truckload in the closing months of the year, with some estimating it will sell up to five million units. Now a new report by electronic shopping guide Retrevo suggests that Amazon’s tablet could outsell even the mighty iPad 2.

Tiny poll

Having polled 1,000 customers last month, Retrevo reported that 12 per cent of the consumers polled stated they would purchase the Amazon Kindle Fire during the holiday shopping season. By comparison, only 10 per cent said that they would purchase the iPad 2. In addition, of those shoppers who already own a tablet PC, 27 per cent said that their next purchase would be Amazon’s Kindle Fire, while 20 per cent indicated they would opt for the iPad. One has to wonder though, with the second statistic, if it is not just a case of the would-be upgraders already owning an iPad.

Fire commence

Writing on the service’s blog, Andrew Eisner of Retrevo says that ‘the iPad 2 is starting to show its age and the new Kindle Fire is about to make the scene with a very attractive $199 price point.’ He is cautious to not declare the Amazon Kindle Fire as a sure-bet, though, saying: ‘As popular as the Kindle Fire appears in this study, whether it lives up to expectations on things like battery life, performance, image quality, etc, the picture could get brighter or less bright for the Kindle Fire.’

He does commend Amazon for the clever release schedule of the device, saying: ‘With the iPad 2 nearly a year old and the iPad 3 rumored to not be available until next year (missing the holiday season), Amazon may have timed the launch of their tablet just right.’

We’ll see

It takes a bold person to bet against the freight train that is Apple’s iPad tablet device but, having said that, there is a lot of excitement surrounding the Amazon Kindle Fire. Could it do what seemed unlikely just a few months ago, and actually outsell the iPad over a quarter in 2011 still? The number of people surveyed by Retrevo is perhaps too small to infer too much from, but it’s interesting nevertheless.

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Amazon customers who have both an Amazon Kindle and are Amazon Prime members now have access to ‘The Kindle Owners Lending Library. It is, as its name suggests, a library-like system for loaning ebooks on your Kindle e-reader. As fantastic as it is, it is not without its problems, facing stiff opposition by industry gatekeepers.

Good things coming

In the press release announcing the service, Russ Grandinetti, who is the vice president of Kindle Content said: ‘The Kindle Owners’ Lending Library is a great new benefit for Kindle owners and an entirely new growth opportunity for authors and publishers.’ After talking up how Amazon Prime has grown, he says: ‘We’re excited to expand that investment to books – with this launch, we expect three immediate results: Kindle owners will read even more, publisher revenues will grow, and authors will see larger royalty checks.’
Librarian, we have a problem

As great as the Kindle Owners Lending Library is on paper, there is one very serious hurdle to consider, and that is that publishers have to opt-in for their books to be included. The problem is none of the big six publishers are signed on, and they control the lionshare of the books that hit the best-sellers list, the classics and those that sit on the retail shelves of the fast-dying physical books chains.

GigaOm reports: ‘The selection of books that can be lent through this new program, however, is exceptionally small:  just 5,000, which may sound like a lot but isn’t really. Although it includes some best-sellers such as Moneyball, there aren’t going to be that many well-known books to lend because none of the six major publishing houses is participating in the program.’

For my money, the publishers are missing a beat here. A digital book subscription service is inevitable and should be embraced. I’m not sure that the Kindle Owners Lending Library is the best-suited program for it, but a Spotify-like solution for books would be great, and this is just the groundwork being laid.

Photo: Dekuwa / Flickr

Online retail giant Amazon has announced that it will boost production of the Kindle Fire Tablet due to incredible pre-order demand. Amazon CEO Jeff Bezos made the announcement after having reported earnings shy of industry expectations.

It’s all money, baby

Speaking on the Fire, Bezos said the company was ‘increasing capacity and building millions more than we’d already planned.’ Two things to take away from that – the company already expected to sell several million units (a reasonable expectation) and have added at least two million more units to their initial production (an amazing achievement).

Why so popular?

The Amazon Kindle Fire is the online retail giant’s first foray into the tablet PC market, with a fast approaching launch date of 15 November 2011. The tablet device has two big selling points – seamless integration with Amazon’s media services as well as the price it retails for. Priced at just $199, the Kindle tablet is likely the cheapest tablet PC available that is being sold by a big time tech firm capable of selling millions of products. Yes, there are cheaper tablets on the market. No, none of them have a more compelling offering.

Scary sales

Not only is demand for the Kindle Fire unprecedented, demand for the company’s full suite of Kindle devices is at an all-time high. Bezos revealed that: ‘Sept. 28 was the biggest order day ever for Kindle, even bigger than previous holiday peak days.’ He added that ‘In the three weeks since launch, orders for electronic ink Kindles are double the previous launch.’

For the company, early sales and pre-order numbers suggest that their strategy of pricing low to move millions of units and upselling media content to reap financial rewards may work. Some believe that the Kindle Fire could sell as many as 5 million units in Q4 2011. This would make it the best-selling Android tablet in the world by a mile, and the second best-selling tablet PC in general, behind only Apple’s iPad.

Photo: Facebook

Social networking giant Facebook may be more profitable than Amazon this year, according to a report. The fast-growing social network, which now boasts well over 750 million users, has been growing its revenue and profits steadily over the last few years, and eclipsing Amazon will be a quite remarkable milestone for the still young company.

Facebook and Amazon number (un)crunching

TechCrunch founder Michael Arrington, now writing on Uncrunched, his new personal blog, extrapolated that Facebook might outpace Amazon in profit in 2011. Arrington writes: ‘In the first six month of 2011 Facebook had $1.6 billion in revenue and abou[t] $800 million in operating income, says a source I trust a lot. That revenue number has been reported before. And the 50% profit margin is in line with last year’s $2 billion in revenue and $1 billion in operating income.’

He continues, writing: ‘With Facebook growing revenue and profit by more than 50% every six months, it won’t be surprising if they hit something close to $2 billion in operating income for the year.’ The kicker comes, with Arrington writing: ‘To put that in perspective, realize this – Facebook will likely be more profitable than Amazon this year. On a quarterly basis they’re already there.’

Winning at the margins

A lot can be made out from this Facebook Amazon comparison. The first is the impact Amazon’s poor margins can have, especially side by side with very good margins. Amazon is on course to make $40 billion in revenue this year, more than 10 times what Facebook is likely to make. The difference is the social networking giant keeps more from every dollar that comes in.

Secondly, it speaks volumes to the advantage retailing software products and building an advertising platform has on selling physical hardware. On average, there’s just more money left at the end of the day if a software company is hugely successful than if that same company was exclusively a hardware company.

Who would have thought there would be a Facebook Amazon comparison as early as 2011? Quite remarkable, actually.

Photo: lemagit / Flickr

During Apple’s earnings call, Apple CEO Tim Cook took some time to speak about iPad competitors and how much they concern the company. Interestingly, speaking on the Kindle Fire, Cook all but said they’re not concerned about Amazon’s tablet, even though he predicts that it will gain some traction.

Talk to me Tim

Apple CEO Tim Cook said [via BGR]: ‘We’ve seen several competitors come to market to try to compete with the iPad.’ He continued, saying: ‘Some had different form factors, different price points. And I think it’s reasonable to say that none of these have gained any traction thus far. And in fact, as all of those competitors were coming to market, our share actually went up, such that in the June quarter, according to IDC, we were responsible for three out of every four tablets sold.’

Amazon a different beast?

There’s a reasonable argument that Amazon is unlike any tablet PC competitor Apple has faced. One of Apple’s key competitive advantages is the vast content ecosystem built around its devices, including iTunes for music and movies, iBooks, and the App Store. Amazon, unlike previous entrants in the tablet market, has a comparable ecosystem. Through Amazon Kindle, Prime, AmazonMP3, and the Amazon Appstore, the online retail giant has a comparable ecosystem to that of Apple’s.

What’s more, where Apple has a huge retail presence due to its stores and dedicated customer base, millions of people shop on Amazon.com and love that company, too, putting them in each other’s respective firing lines.

Not cause for concern yet

Yet in defense of Apple CEO Tim Cook, there’s little reason to be fearful of any tablet that is not on the market yet – not even the Kindle Fire. Still, if the Kindle tablet device is going to put up a brave fight, it’s going to require a lot of hard work from Amazon’s team, given Apple’s incredible momentum.

Photo: Amazon

At its press event in New York City this Wednesday, Amazon finally unveiled the long-rumoured Kindle Fire tablet. In addition to the tablet PC, the company also unveiled two updates to the classic Kindle.

First, the fire

As anticipated, the Amazon Kindle Fire tablet PC is dirt cheap, retailing for $199 (£127). That is half the price of the cheapest iPad – $399 – available on the market today. The tablet, which has a dual-core processor and 7-inch display, has a heavy media focus, as was widely expected, with direct access to all of Amazon’s media service, including Prime, Amazon MP3, Kindle, Instant Video and even Amazon’s AppStore. And this wide breadth of media accessible to the Kindle Fire tablet could be the big difference maker between it and other failed iPad competitors.

Now the touch

The Kindle Touch is a touchscreen update to the classic Kindle e-reader. It ditches the keyboard and face buttons altogether for a wholly touchscreen experience, retailing at what’s almost a giveaway price of $99 (£63). It has an infrared layer over the e-ink screen, to avoid inadvertent screen touching while reading. Furthermore, it features the company’s EasyReach technology that allows for page turning by simply touching a certain area on the screen.

Now the classic

Finally, Amazon also unveiled the standard Amazon Kindle update. It’s even cheaper than the Kindle Touch, priced at just $79 (£51), but has a small thumb stick for turning pages and browsing menus, as opposed to the touchscreen on the Kindle Touch.

Speaking on the aggressive pricing of all these devices, Amazon CEO Jeff Bezos writes on the company’s homepage: ‘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.’ It’s unlikely the retailer makes big margins on sales of the hardware, but it’s the media content that comes behind it that Amazon is really in the game for.

Photo: Cesar Dominguez / Flickr

The Apple iPad continues to reign supreme. Research firm Strategy Analytics reports that four out of every five tablets sold in the US in the second quarter of 2011 were Apple iPads.

The gap

The firm says that of the 7.5 million tablet PCs sold in the quarter, the Apple iPad tablet sold approximately 6 million units, giving Apple 80 per cent of the market. For all intents, at this stage, Apple’s device is absolutely dominating the competition. Alex Spektor, a Strategy Analytics analyst agrees, saying: ‘Apple remains a long way ahead of its main rivals such as Motorola, Samsung, RIM, Asus and HTC. A combination of cool branding, user-friendly hardware, entertaining services and savvy retail distribution has made Apple a formidable market leader.’

Your turn, Amazon

Research firm Strategy Analytics, however, joins a growing chorus of onlookers and analyst who believe Amazon are now best poised to take on Apple’s tablet PC, depending on what they unveil with their Kindle tablet.

Director at Strategy Analytics Neil Mawston says: ‘Provided the pricing, screen size and hardware design are right, Amazon can be one of the main challengers to Apple’s dominance.’ He added that Amazon’s strength is derived from sharing some of the competitive advantages Apple has used to its advantage. He says ‘Like Apple, Amazon has a strong brand, compelling content, sophisticated billing systems and widespread distribution.’

The here and now

Whether the Amazon Kindle tablet will compete is a matter for the near future, but 80 per cent of any market, irrespective of how you paint it, is total domination. The iPad has sold at levels nobody could have reasonably predicted, and those who have tried up to now to compete have been unsuccessful – very unsuccessful, as per the research firm’s analysis.