"We're making premium products and selling them at non- premium prices," twice declared Amazon chief Jeff Bezos this morning, as he took the wraps off several new tablet devices. The expression kind of reminded me of the old salesman's gag line - "I'm losing money on every sale but making it up in volume."
On the surface, it appears Amazon is pricing the new hardware with little or no profit (the opposite of the Apple model) but expecting to make it up on software sales. Customers will be locked into buying books, magazines, newspapers, movies, music, games and apps through Amazon's updated Kindle e-readers and its first color tablet, dubbed the Kindle Fire.
Bezos first took the wraps off slicker new Kindle e-readers. Kindle Touch, priced at a mere $99 (Wi-Fi only) and $149 in 3G "world" version, retains the brand's 6-inch monochromatic e-ink screen that's wonderfully viewable in daylight, but eliminates the physical keyboard of earlier models. On the new models you'll just tap on the screen to flip book pages and also call up extra analytical features - dubbed "X-ray" - which take a reader deeper into a book, including on-board Wikipedia references.
Will this feature also be in the electronic loaner copies that many public libraries (though not Philadelphia's) are now offering to Kindle users through the Overdrive delivery service? Unlikely.
If you don't need touch, there's a new lighter (6 ounces), smaller and faster Kindle e-reader coming at a mere $79. However, it's more difficult maneuvering process to buy books and mags doesn't seem worth the saving.
The main (or at least, more anticipated) event at the Amazon press conference was the unveiling of the Kindle Fire - Amazon's first color tablet, priced very competitively at $199. The feature set includes a 7-inch multitouch IPS color screen and fast dual core processor, in a Kindle-sized package that weighs just 14.6 ounces. Out of the gate, it should be a great device for accessing books and magazines, music and movies from Amazon's cloud based site. And if you participate in the $79.99 a year Amazon Prime delivery service, Fire should bring you instant access (at no extra charge) to a library of 11,000 movie and tv shows.
Also announced - the Amazon WhisperSynch feature which currently works only with purchased e-books now will also allow purchased movies and TV shows to be shared between Fires and possibly other devices registered on the same Amazon account. Oh, and music purchased from the Amazon store will play on the Fire with spiffy color cover art and a full touch control panel visible on the screen.
Maybe the biggest deal about Fire is the smart, accelerated internet browsing it will offer through a split process called "Amazon Silk." Residing both on the Fire and in the cloud, Silk will reduce page loading time from 100 milliseconds to a mere 5 ms, by doing tricks like compressing images before sending them and predictively loading sections from a site (which you regularly visit) onto the device before you bother to ask for them.
While reportedly built on the same bones as the Blackberry Playbook, Fire radically undercuts the latter's $499 list and even current $299 deals we've spotted for the Playbook (at Office Depot, with rebates/store credits.)
How can Amazon do it? Volume! Or more acurately, by persuading you to "buy in" to the tablet, then making you a captive customer of all their Amazon store content and merchandise.
Clearly, the strategy's already lit a blaze under the Kindle, making the device the world's most popular repository for e-books. So why not now, with multimedia content too?