

Amazon's Play - defap
http://daringfireball.net/2012/09/amazons_play

======
notatoad
>It’s a heads we win, tails you lose strategy. That’s the brilliance... Amazon
wins so long as you consume media content from Amazon, no matter if you play
it on a Kindle Fire or an iPad. Apple only wins if you buy an iPad.

It's amusing that Gruber can see the brilliance when amazon does it, but not
when Google does it. This is exactly google's strategy with android, except
that it doesn't involve users buying content. Google makes money when you use
the internet. They win whether you use an iPad or a Nexus or a Kindle, Apple
only wins if you buy an iPad.

~~~
Tloewald
Amazon is, like Apple, a "sell people stuff at a price they're willing to pay"
company, versus a "free but we will auction slivers of your soul" company.
Apple makes most of its money up front, Amazon makes most of its money... um
no one is quite sure how or if Amazon makes money. Google "gives" away goods
and services and makes money selling ads ... like an old fashioned TV network.
Not exactly the same thing at all.

Oh, and how much net profit has Android yielded Google?

~~~
StavrosK
> Oh, and how much net profit has Android yielded Google?

Probably a _whole_ lot. When my sister, who would otherwise be in front of a
computer at most half an hour a day, can get an android smartphone for 150
euros and idly browse the Web all day, Google makes a shitload of money they
wouldn't have if all these people were on cheap nokias.

~~~
eli
Don't iPhone users make just as many (probably more) Google searches as
Android users? Or do you think that without Android, nobody would have put out
cheap smartphones by now?

~~~
regularfry
It's quite possible there _wouldn't_ be cheap smartphones without Android. At
least, not ones with a decent browser. Meego imploded on its own, Palm took
webOS down with it as a realistic option, and MS would probably never let the
word "cheap" attach itself to Windows Mobile. What's left? Openmoko, maybe?
And, just as importantly, if you assume the cheap smartphone makers wouldn't
gang up and make their own platform, who else might have pushed a new, free,
mobile OS other than Google? Funnily enough, the only other company I can
think of who might have had a go at it is Amazon. Today I could see Facebook
having a go, but where were they 7 years ago?

Then again, markets are funny things. In a world without Android, I can't
imagine the expensive iOS ecosystem being the only game in town. _Something_
might have filled the sucking void at the cheap end of the market, but what?

~~~
eli
Licensing Windows Mobile is what? $30 a unit? Less?

So without Android isn't it safe to assume HTC would still be pumping out
Windows phones, perhaps at $389 retail rather than $349?

~~~
regularfry
Yeah, but at sub-$100? Probably not.

------
thurn
> Amazon is, to my eyes, the only company playing in the same league as Apple

I think it's a bit premature to write off all other Android tablets entirely.
In 2009, Android phones also seemed like they weren't in the same league, and
none of us could imagine living in a world where Android outsold iOS devices
2-to-1, but it happened.

~~~
danso
But the league isn't just hardware, it's services, content and distribution

~~~
w1ntermute
Like drivebyacct2 said, you can get content from Google Play. But the really
funny thing is, you can get all of that from Amazon on _any_ Android tablet. I
don't understand how people don't realize that all the Amazon apps on the
Kindle can be installed on any other Android tablet. This is exactly what I
did with the Nexus 7 - you can get the Amazon App Store, Kindle app, etc.

~~~
MatthewPhillips
Can't get Amazon Video.

~~~
w1ntermute
Not officially, but it can be sideloaded: <http://forum.xda-
developers.com/showthread.php?t=1347745>

Direct link to APK: [http://forum.xda-
developers.com/attachment.php?attachmentid=...](http://forum.xda-
developers.com/attachment.php?attachmentid=784641&d=1321467251)

That said, I vastly prefer Netflix to Amazon Instant Video.

~~~
jlgreco
I find Netflix and Amazon Instant complement each other nicely. I watch as
much of a series as Netflix has, then I can watch the remaining seasons on
Amazon Instant. Amazon Instant also gets me current shows, like the newest
Doctor Who episode.

------
trimbo
> Tech writers have a natural aversion to lock-in, high prices, and dominant
> market leaders.

You mean the same tech writers who have been breathlessly talking about
tomorrow's iPhone 5 announcement for months? A device that fits this
description exactly?

------
pyang
I think what separates Apple and Amazon from the rest of the pack is their
simple but relentless pursuit of their values, and the extent to which they
appeal to us customers. It's easy to understand their respective philosophies
- Apple in terms of product design and quality, and Amazon in terms of prices
and shopping experience. Both are now crossing into each others' territory -
Apple with the future iPad mini and Tim Cook's operations knowhow, and Amazon
with designing higher quality products. But both approaches are easily
understandable by customers and appeal to their own values - innovatively,
doggedly competing either on quality or price or both.

On the other hand, I don't think it's hard to see that most other
manufacturers' philosophies go along the lines of "Let's make everything we
can think of and see what sticks." Microsoft, for one, is only starting to
turn around from its philosophy of "We want to be everywhere in your life" to
focus on customer experience. These approaches are business-centric, and don't
present anything that the consumer can trust or grab onto, especially when you
think about the various music stores and other half-hearted approaches at
retaining consumers who buy their products.

Intrinsically, I think customers understand the lack of focus - that these
manufacturers are fundamentally focused on gaining a share of the pie rather
than making customers really happy with what they just bought. With Apple,
it's "Look at all these neat things I can do with all these apps"; with
Amazon, it's "Look at all the stuff I can buy and read/listen to/watch." Other
companies are only recently coming on board, and as long as they're not
focused on giving the customer something to do with their products, they're
going to miss out.

------
credo
Gruber says _"(Eric Schmidt even admitted last week, at Motorola’s Droid event
in New York, that only one half of one percent of Android “activations” are
for tablets"_

The source ([http://9to5google.com/2012/09/05/eric-schmidt-1-3-million-
an...](http://9to5google.com/2012/09/05/eric-schmidt-1-3-million-android-
activations-70000-tablets-daily-480-million-total/)) says _"Google CEO Eric
Schmidt announced on stage that 1.3 million Android devices are being
activated daily, of which 70,000 are tablets."_

So tablets account for more than 5% of Android activations (not one half of
one percent)

~~~
lloeki
Sounds like someone made a decimal place error (5% vs 0.5%)

~~~
Ygg2
Well 70 000/1 300 000 * 100% = 5.38%, so it seems Gruber made the error. And
yeah someone is wrong.

Unless I'm mistaken and 1.3 million is by some weird definition 13 000 000.

------
nostromo
> I think Bezos’s best line at the event was this one: “We want to make money
> when people use our devices, not when they buy our devices.”

I had the opposite reaction. Hearing this line, hearing about the ads on the
lock screen, and seeing this slide
([http://www.blogcdn.com/www.engadget.com/media/2012/09/amazon...](http://www.blogcdn.com/www.engadget.com/media/2012/09/amazonevent0184.jpg)),
I immediately knew I wouldn't be switching from an iPad to a Kindle.

~~~
FireBeyond
And yet a Kindle plus "Ad Removal" is still hundreds of dollars less than the
iPad ($15 for the ad removal).

Interesting how you were willing to consider the device beforehand, but that
was a deal breaker.

Or maybe it's a matter of principle...

~~~
Tyrannosaurs
I may be wrong but I thought that there was no ad removal option on the new
Fire?

~~~
WayneS
There wasn't originally, but they quickly added the $15 option to remove the
ads. BTW: on existing kindles you can pay extra to remove the ads after the
fact, so you don't really needs to decide up front. Amazon know that NOBODY
buys the ad-free version so they mistakenly believed they didn't need to list
an ad-free version separately. But people need to be given the option to feel
better even if no one ever actually buys that version.

I own a 3G Kindle that pre-dated ads. When I saw the ads on my wife's newer
kindle I actually opted-in to add ads to my version. The ads are more
attractive that the default screensaver and occasionally you get a really good
deal. (like $5 Amazon credit)

------
Kylekramer
Like Gruber, I really like the "we want to make money when people use our
devices, not when they buy our devices" line. I often heard people deriding
Kindles as merely vending machines for Amazon and I found myself slightly put
off by that. But with that one line, Bezos really flipped a switch in my head
to the point where the Amazon method seems much more fair to me as a customer
than the one time hardware purchase model.

------
cageface
The only thing I use my iPad for any more is the browser and the Kindle app so
Amazon's pitch makes a lot of sense to me.

But if anything I'm thinking of downgrading to an e-ink reader. I spend way
too much time looking at backlit screens in a typical day already.

------
ariwilson
70k/1.3m = 5%, not 0.5% as claimed by Gruber (re: Android tablets activated as
a percentage of total Android devices activated).

------
ippisl
I'm not sure: "we want to make money when people use our devices, not when
they buy our devices" is true.

Amazon does makes a decent margin above the marginal cost of the $299 kindle
fire HD and on the kindle fire HD LTE: [http://www.eetimes.com/electronics-
blogs/other/4395833/BOM-b...](http://www.eetimes.com/electronics-
blogs/other/4395833/BOM-bom-bom-the-Kindle-Fire-refresh--?pageNumber=1)

It's hard to tell if they profit even after including fixed costs, but they
might.

But pricing it's low end model slightly above it's BOM is a signal to
competitors: "we don't care to profit from sales, if you'll compete, you'll
lose".

~~~
agscala
I really like the last point you made there.

I wonder what Google has planned to fight for the top? Google's Nexus line is
their first step into the battle. They're obviously trying to get involved in
the media game but they know they're late compared to Amazon and Apple. Surely
they will be stepping up their game for the next release.

Google _can_ compete on price though, since they make money from the services
they offer, just like Amazon.

------
chj
Can't help thinking, is this a quest for a new god?

I am a huge fan of AWS, love the Amazon's "pay what you use" philosophy.
However, I bought a Kindle Fire before, and since decided not to buy any more
in the future. Not matter at what price. Sometimes you shouldn't be doing what
you are not good at.

------
parka
The latest offering of Kindle Fire might actually give the iPad a serious
competition.

I'm currently an iPad user.

If I don't have the iPad now, I would be torn between buying the two.

The Kindle Fire is cheaper. Amazon's customer service is great.

But the most compelling reason is they have Amazon Prime. Being able to access
all the Amazon Prime free movies and TV shows is a huge draw, at least to me.

There will be those who will buy it to install their own Android versions
also. Small group though.

If I were to recommend either tablets to friends, I'm not sure which one I
will recommend. Prior to this release of Kindle Fires, I would have
recommended the iPad without much thought.

------
jiggy2011
He says nobody is buying other Android tablets, but what about the Nexus 7? I
thought they were being sold faster than they could be manufactured.

The Nexus 7 is pretty cheap too, is there any good reason to buy a kindle over
one?

~~~
grecy
> what about the Nexus 7? I thought they were being sold faster than they
> could be manufactured.

The implied statement is _compared to iPad_ , nobody is buying Android
tablets.

They might be selling faster than they can be manufactured, but it's still a
tiny fraction of iPad sales. All of Google's revenue is a tiny fraction of
iPad revenue.

~~~
ariwilson
The last part of your statement isn't true.

Q3 2012, Apple iPad revenue: $9.171B on 17M units Q2 2012 (different calendar
system), Google revenue: $12.2B.

~~~
grecy
Apologies.

I was thinking of iPhones. Q3 2012, Apple iPhone revenue $22B

------
lazerwalker
I'm interested to see what happens with Apple's upcoming releases. A large
(albeit not the only) component of Bezos' message is that the Kindle Fire
provides an iPad-quality experience at a lower upfront price because Amazon
intends to get most of its long-term customer value through media sales; that
idea could suddenly become a lot more interesting if a hypothetical iPad Mini
/ Air is released at the same price point as the Fire. Amazon would still be
very well-positioned (as Gruber puts it, "heads we win, tails you lose"), but
it would certainly make the hardware sales race more interesting.

------
hcarvalhoalves
I like Amazon and the idea behind the original Kindle (the e-ink one), but it
bothers me:

\- They are all over with their tablets trying to compete with iPad or Samsung
ones, it doesn't seem to have the same focus of the original: simply a good
device to consume digital content. They will lose if they try to compete like
that, trying to release full-featured tablets at low margins.

\- Their event is _way too much_ like Apple's WWDC. I mean, even the slides
look like they are done on Keynote. It doesn't give a good impression.

~~~
jonknee
> Their event is way too much like Apple's WWDC. I mean, even the slides look
> like they are done on Keynote. It doesn't give a good impression.

It was nothing like WWDC--there was no developer conference. It was a single
presentation. That they possibly used a major presentation application to run
a presentation is not very surprising. They probably had coffee in the back of
the room too.

------
dasht
Amazon's main strategy is to broker transactions between its users and the
vendors that supply those users. Amazon is aiming to be everyone's primary
retail store for everything.

Facebook's strategy is to own everyone's on-line "sharing". Google's strategy
is to own everyone's "search" (broadly defined). Amazon wants to own
everyone's retail experiences.

Amazon would love it if slick devices were cheap enough to just give away --
they'd know instantly how to make huge money off that. Google and Facebook?
Not so much.

------
recoiledsnake
That's an interesting improvement given Gruber's snarky dismissal of Amazon
because of the quarter's earning numbers recently:

<http://daringfireball.net/linked/2012/07/27/amzn>

[http://daringfireball.net/linked/2012/07/27/amzn-profit-
corr...](http://daringfireball.net/linked/2012/07/27/amzn-profit-correction)

The whole Apple is superior to Company X because Company X makes far less
profit might be what his target audience revel in, but is non-sequitur and
gets old fast. How would he have reacted a similar comparison with, say
Microsoft when Apple was not doing so well?

~~~
Tloewald
This is hilarious. Do you know what it was like to be an Apple user from, say,
1987 to 2002?

