Greg's Bite: Kindle Fire not an iPad Killer
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Greg's Bite: Kindle Fire not an iPad Killer

By Greg Mills

The web is loaded today with Kindle Fire news stories, some suggesting the dread iPad killer has landed ... Not really, not for a lot of reasons. A souped-up book reader that can also run a version of the Android OS, but has a small screen and lackluster features isn't comparable to the iPad.

As Steve Jobs noted, the smaller size screen reduces actual square inches of usable surface on an inverse squared. Smaller screen sizes were tested at Apple and rejected. Keep in mind, there are rumors that the new iPhone will sport a larger screen and sort of fill-that-gap in the product line defined by the Kindle Fire. I submit that the next direction screen sizes will go is up, not down.

Apple will also introduce retina iPad screens sooner than later. The higher resolution doesn't mean much until you compare regular TV to HDTV. Wow, what a difference it makes.

Remember a year ago when the electronics shows were full of iPad killers. One show had a magnitude of 100 slate computer mockups displayed. Of that 100 I bet only 10 to 15 will ever be launched -- and that includes RIM's failed PlayBook, HP's failed TouchPad and other wannabe iPad killers that aren't.

What few of the Kindle stories fully explain is that the lower price on the Kindle is due to a lackluster feature set, a tiny screen and the constant barrage of Amazon advertising you will have to put up with.

Amazon admitted that the Kindle Fire would be supported by a lot of Amazon brand ads. The cheap but advertising supported hardware concept has been tried even with Windows PC, but never really took off. I think I would be throwing a Kindle Fire into the fire a few hundred Amazon ads down the line.

Apple never expected to own the tablet computer business forever, and I bet they have succeeded more than they ever projected. Here we are two generations of iPads later with an iPad 3 in the works with no credible competition. Keep in mind, even Samsung has a 5% margin on tablet computers. Apple has a much higher profit margin than the competitors and also sells the top-of-the-line product.

Also, consider the strong likelihood, that as with all Android hardware, Apple will sue if they infringed on iPad technology. The Amazon Kindle runs the Android OS, which means the bag of legal hurt comes along for the ride. Is there $10 in the Kindle to pay Microsoft for a license on its technology? Will a rewrite of the Android OS to remove Oracle's Java code still run on Kindle Fire? Will existing Android apps still work without Java? What if Apple wins the Android legal battle? Used Kindles will be worth little or nothing at that point.

Will Amazon sell a lot of Kindles? I am sure they will. Will the Kindle take much market share away from Apple? Don't count on it. Amazon can lose money on every Kindle they sell and figure it is a cost of doing business and that the sale of books and all the stuff Amazon sells will make up the loss-leader Kindle tablet and then some.

The goals of Amazon and the goals of Apple are different and the businesses are totally different. Is an iPad worth twice as much as a Kindle Fire? I think it is; a year from now the market will confirm the opinion of millions of consumers. Good luck Amazon, you are going to need it.

That is Greg's Bite.


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