Amazon Kindle Fire : Whom did it Fire?

Amazon announced their tablet Kindle Fire along with Kindle Touch and Silk Browser. There is a lot of speculation on the net saying this might put a dent to iPad 2 sales. But I don’t agree with that. iPad2 even though I can’t run Flash, there are ways to do that. Good example is SkyFire browser. But this definitely puts dent to Nook Color, and other low end Android tablets and RIM Playbook. Amazon has bigger ecosystem of content that includes books, newspapers, magazines, video, audio and this is capable of playing good number of Android games.

The integration of device with Cloud makes it sitting next to Windows Phone 7.  The Silk browser may expedite the browsing experience and will satisfy some people around even though I can’t really validate how much of privacy we have to lose for speedy browsing. My concerns are what happens if I do my banking, pay bills, taxes or do some other critical activities that I do now through other browsers. Would they go and sit in the cloud at Amazon. One thing for sure, Amazon knows my style of living on the network and my each movement there and stores them in their clouds. There is criticism that Google reads the emails, documents, searches and even our social habits, but this goes beyond that. Can I block the ads when I use their browser or I have to watch the ads thrown out between the page requests by Amazon now and then? There are so many questions and concerns about this right now regarding the privacy.

The Android Version that Amazon has chosen for this is older instead of Honeycomb or Icecream Sandwich. That makes a nightmare for developers, because they have to work with this version of Android along with Google’s mainstream. This is a clear fork into the system. My main question is how much effort would Amazon put in upgrading the OS regularly. Because they have forked Android, and they are going in a different path, would Amazon hire talent and continuously upgrade the OS? That one also we have to wait and see. Amazon put a decent AppStore in a short period, given that fact, I think they would.

It doesn’t have 3G support and camera’s and expandable memory,  but it has cloud storage support , and moreover it is perfectly priced at $199. This would definitely put a dent to B&N nook Color, and other cheaper Android tablets. Amazon has content ecosystem which even Google lacks except Sony. It will take away major portion of market from already struggling Honeycomb tablet market, since higher end Android tablets couldn’t compete with iPad 2 even though a good number of devices have better specs than iPad2 (hardware wise), they are struggling because in the consumer market, it is proven that people would buy if you have better ecosystem with rich content. Lack of camera, native email and expandable memory may make some to think, but it will not harm Amazon sales because of the same reason, content.

Here is the list of winners:

1. Developers: Developers have another avenue to sell their apps

2. Publishers: Publishers have another avenue to sell their content

3. Amazon: Amazon will make money by selling apps and content

4. Microsoft: Why Microsoft, where would it fit into the scenario? Microsoft licenses its patents to Amazon, they are already doing it with them on Linux, so they make money on each device sold.

5. Consumers: Consumers now have more choice to decide on which tablet.

Here is the list of potential losers:

1. Android Tablet Makers: HP Touchpad fire sale damaged the prospects of selling Android tablets this year. And now Amazon wiped any chances of selling during holiday period They are already not able to compete with Apple, now they have to worry about Amazon Fire. The people who would get an Android Tablet will be the ones that are looking for open and alternative to Apple ecosystem with higher end specs. But the question is how many would!

2. Google: Even though Google is the creator of Android, Amazon is not including Google Apps, GMail and other Google services, so they don’t have to pay single dime to Google. Moreover Amazon has its own search and they can sign with companies for advertisements.

3. Research in Motion: RIM is already struggling to sell their Playbook and they already reduced the prices drastically, with this now, they may have to just junk it like Kin and Touchpad.

4.Barnes & Noble: Barnes & Noble current nook Color is priced at $249, with similar capabilities, but it has expandable memory slot, of course no cloud integration, you have to have an app for that. nook is more pricey and B&N doesn’t have that much of content that Amazon owns. B&N have to pay for Google for the apps and GMail and if Microsoft wins, they have to pay for them too. Also B&N doesn’t have the financial muscle that Amazon owns.

5. Consumers: Why consumers are losers here. Once you adopt to Fire, you are struck there. The openness of Android and choice of choosing your own content provider is gone forever. You are walled like iPad owners.

Where does Apple fit in this scenario? That is a good question, but the answer is Apple is no by choice the loser. This will not put dent into iPad sales. Apple can reduce the price of their older iPads like they are doing with iPhone 3GS, and sell more. I have seen good number of people carrying iPad and nook Color. And I think that trend will continue and Amazon Fire will replace nook Color in those scenarios.

Update: Another potential loser with this and cheap Kindle Touch and Kindle are the the independent ereader makers.

For more information on Amazon Kindle Fire read here.