Business Today

Rekindling the fire

Suveen K. Sinha | Print Edition: October 30, 2011

Before the iPad - now, that would seem like a really long time ago to the tablet's aficionados - there was Kindle. A humble black and white e-book reader, it started a new market segment and sought to change the way people read and thought of books. But soon came the iPad, on which you could do what you did on Kindle and much more. And then there were the bragging rights every Apple-user assumed. As iPad sales surged, Kindle's remained modest and - to hardware biggies' shock - laptop sales growth suffered.

Now Amazon has come to seek revenge with Kindle Fire. With a glossy seven-inch colour touch screen and dualcore processor, it is a fullblown tablet. Well, not quite full-blown if you compare it with the iPad, whose unwavering popularity - 29 million sold in the first 15 months - has reduced the competition in the tablet market to a race for the number two slot. But Kindle Fire can hold its own, especially if it can present a credible rival to Apple's iTunes universe with its own little ecosystem.

That ecosystem is critical, because Amazon seems to have opted for the "razor blade model" made famous by - who else? - Gillette, now a unit of Procter & Gamble. Analysts point out that Gillette sells razors at a loss and makes up for it, and more, on sales of blades. According to a press release on the web site of research house IHS iSuppli Research, Amazon spends $209.63 on making each Kindle Fire, the new avatar of Kindle. The selling price is $199. Even the cheapest iPad comes for no less than $499.

: How Kindle Fire stacks up against the iPad

Amazon's founder and Chief Executive Jeffrey F. Bezos says he thinks of Kindle Fire like a service, offering integrated hardware, software and content. The software and content - the razor blades - include Amazon's warehouse of some 18 million e-books, songs, movies, television shows and Android applications.

Kindle could not provide the hardware interface to leverage all this; Kindle Fire does. Once you have it in the palm of your hand - that's right, it does fit in there - you can browse the web and stream music, movies or video. You can also read from a virtual news-stand after paying for the blades - oops! publications. You can store 6,000 books, or 10 Hollywood-length movies, on its eight gigabytes of memory.

And then there is the 'cloud', which everyone is talking about these days. Amazon Silk, the web browser developed especially for Kindle Fire, shifts some of the load to EC2, Amazon's cloud computing engine. That means even heavy pages can load fast. What's more, the cloud-based storage system comes free with the tablet.

So far the competition to the iPad came in two forms. The first was from the likes of Samsung, whose Galaxy tried to outdo the iPad and charged as much or more from the consumers. The second was the cheap tablet. Last heard, there is one being launched for $35.

Kindle Fire offers the most sensible alternative to the iPad. Amazon knows its limitations, tries it best, and expects you to know that you are not buying an iPad. Sure, Kindle Fire does not have a camera or a microphone, which enables the much-loved video chats on the iPad. It connects only to Wi-Fi, not to a mobile network. But hey, what did you expect? Look at the price tag.

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