Although Android hasn’t made huge inroads into Apple’s dominance in the circa 10-inch tablet market, it has carved itself a nice niche in the 7-inch sector. The leader of this category is Amazon with its 7-inch Kindle Fire. However, that could all be about to change now that Google has announced (and is very close to shipping) its Nexus 7 tablet.
Google has executed a master stroke in its positioning of the Nexus tablet. First, it is technically superior to any other 7-inch tablet on the market (with its quad core CPU and Android 4.1 Jelly Bean). Second, Google has priced it exactly to compete with the Kindle Fire. And third, Google is selling compelling content (apps, games, books, music, and movies) via its now integrated Google Play store.
So what must Amazon do to compete? The rumors are that Amazon is about to update the Kindle Fire line and the Nexus 7 must be its target. Before looking at the details, it is worth mentioning that Amazon isn’t selling tablets per se, it is selling Kindles. By that, I mean that Amazon doesn’t make a big fuss about the hardware specifications of its devices, but rather it underlines what they can do and how easily they can do it. That said, one of the complaints users had about the Kindle Fire was the sluggishness of the user interface.
To that end, first Amazon needs to improve the CPU in the Fire. The original Fire had a dual-core CPU running at 1Gz, which was great before the Nexus 7, but now Amazon needs to either bump up the speed to around 1.5Ghz (and stay dual-core – remember the iPad isn’t quad core and nobody is complaining about its speed) or go down the quad-core path.
Second, and this is most likely already in Amazon’s plans, the new Kindle Fire needs a higher resolution display. Apple is making a big thing about its Retina Displays – it has them in its phones, in its tablets, and in its laptops. Amazon needs to at least match the display on the Nexus 7 and it needs to make as much noise as it can about why consumers should part with their cash to enjoy the luxury of whatever IPS, high resolution, high DPI, Gorilla glass display it fitted.
Google has also done an incredible job bolting on extras to the Nexus 7. It comes with NFC, an accelerometer, GPS, a magnetometer and a gyroscope. The Kindle Fire has none of these. My guess is that adding a magnetometer and a gyroscope should be easy enough (they are almost standard now in tablets). It is questionable if Bluetooth is necessary, but GPS is a must. It is thought that Amazon has bought its way into the navigation and maps business by purchasing UpNext – a 3D mapping startup. This would mean that the new Kindle Fire will have GPS without a doubt.
So that covers the hardware – Amazon needs to bump up the CPU and add all the niceties, like a magnetometer and GPS. But what about the software?
One of the big selling points of the Nexus 7 is Android 4.1 Jelly Bean. Does Amazon need to port Jelly Bean to the Fire? The answer is no and yes. It is important to remember that Amazon doesn’t sell Android tablets, it sells Kindles. And to that end, Amazon doesn’t even use the word Android when marketing the Fire. For Amazon it is all about experience and content. The Kindle Fire doesn’t run a vanilla version of Android, in fact it runs a heavily modified, forked version of Android 2.x. Almost certainly, Amazon has been continuing to develop its forked version of Android, and, although it may backport features from Ice Cream Sandwich or Jelly Bean, the truth is Amazon doesn’t really care. The Fire has its own UI and its own way of doing things.
Having said that, Amazon needs to keep the Fire compatible with Android so that all those nice third party games and apps can run on it. If, in the future, the minimum required version of Android needed to run most apps and games becomes Android 4.1, then Amazon will need to make sure that the Fire is compatible. However that isn’t going to be any day soon.
Amazon priced the Kindle Fire very aggressively and selling it for under $200 was a key to its initial success. But now Google has managed the same thing but with more bells and whistles. In fact, the current $199 Kindle Fire looks quite sad next to a $199 Nexus 7. But Amazon is an expert at pricing. It could sell the next generation Kindle Fire at anywhere from $149 to $199, even a drop of $5 to $10 could be significant.
Leaving GHz, magnetometers, Android compatibility, and price wars to the side, the real battle is about content. The eagle-eyed among you will have noticed that Google is giving away a free movie and $25 of credit to spend in the Play Store with every purchase. This effectively lowers the cost of the tablet by another $30 or so. The message that Google is sending out is that Google is now a multimedia content provider. Apps, games, books, music and movies. If you can legally download it, Google wants to sell it to you.
Now, this was of course the unique selling proposition of the Kindle Fire. Buy a Fire and get access to, and I quote from Amazon’s web site: 19 million songs, 10,000 popular movies and TV shows, 1 million pay for books and over 2 million free books. Quite a collection! Samsung couldn’t offer you that, neither could HTC nor Motorola. But now Google can.
To bring the fight to Google, Amazon needs to offer similar discounts, free credit or free movies / music to attract customers. Amazon already has its Amazon Prime service, which grants extra benefits to subscribed customers. It won’t be long before content based subscriptions appear where you can download a certain amount of music, movies, or TV shows for a monthly fee. When that happens, the devices will become free or as close as possible. Think mobile phone subscriptions, but rather than paying for so many minutes, text messages, and Megabytes of Internet access, you actually pay for so many apps, songs, books, or TV shows.
With Google and Amazon battling for superiority as content providers, hardware prices will drop and content consumerization will continue unabated. But what about you? What does Amazon need to include in the overall package of the next generation Kindle Fire to make you buy one of them rather than a Nexus 7? Leave a comment below and let me know your thoughts.