Kindling Success

Addendum: RIP Steve Jobs – You are this generation’s greatest innovator

Amazon recently introduced a new version of its trendsetting Kindle electronic reader. While the original ignited change in how books reach audiences, the latest intends to disrupt the momentum of Apple’s iPad. Kindle Fire has a bigger – color – screen, a faster browser the company believes will be as smooth as its Silk name and stores everything in the cloud. Since iPad hit the market 18 months ago – having sold more than 30 million units – competitors appeared and vanished quickly.

HP announced six weeks ago it is discontinuing TouchPad after determining it mistakenly tried to compete with Apple’s 83 percent market share. So what makes Amazon think it will succeed where others failed? Amazon is upfront that it’s not taking aim directly at iPad. Kindle Fire is WiFi only with no 3G access. There is no camera, nor can you create and edit documents. You can’t place a voice call. What you can do is access Amazon’s extensive digital library. As CEO Jeff Bezos noted in unveiling Fire: “What we’ve done is really integrate seamlessly all of our media offerings – video, movies, TV, apps, games, magazines and so on.’

Most importantly, you can buy Kindle Fire for $199. The entry-level iPad is $500. Amazon is betting the digital content it sells will make up for the low price. That’s an advantage other Apple competitors aren’t able to utilize.

Anytime there is innovation, copycats follow. The key to not ending up in the product graveyard is to provide enough differentiation that consumers have a viable choice. As someone who purchased the original Kindle several years ago and has read many books on it, I’m glad to see Amazon take the next step in improving its device. Someday – in our lifetimes, I’m guessing – hard copies of books will be collector’s items and nothing more.


Does Competition Lower Prices?

Apple and its iconic leader Steve Jobs rank near the top of any list of great innovators. Dating back to the introduction of the Macintosh on Super Bowl Sunday 1984 – and the Orwellian ad directed by Ridley Scott – continuing through the iPod, iMac and now iPad… Apple keeps churning out the hits and changing industries.

After Amazon shook the publishing world with its Kindle electronic reader, most pundits felt it was a matter of time before Apple would introduce a better device. It took two years before last week’s announcement of a “truly magical product” that comes in full color, allows Internet access, works with all 140,000 Apps – and this is just version 1.0.

Of course, there’s a ‘dark side’ of any great story… and this one impacts consumers. Kindle pricing on new releases is $10 – a tremendous savings compared to buying the hardback; however, within days of the iPads’ introduction, Macmillan said it will increase e-book prices to $13-$15.

Amazon reacted by pulling Macmillan titles: “We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. Ultimately, however, we will have to capitulate and accept Macmillan’s terms.”

So going forward, Macmillan will set prices and pay Amazon a 30 percent commission. Not surprisingly, that’s the agreement Apple made with major publishers. (And you thought all of the mystery and drama only happens inside the pages!)