It was not very long ago when, while watching television, we had to suffer through incessant commercials or leave the room. It became so annoying that it led to the development of VCRs and DVRs that we all loved, because they allowed us to skip those commercials.
So when Jeff Bezos, CEO of Amazon, introduced a new line of tablets that allow you to save about $100 in exchange for putting up with advertising, I was skeptical.
Itís not a new concept, but a throwback to the days where we had little control over our devices. What was surprising is that Bezos said his new 8.9-inch Fire HD Tablet was at least as good as the Apple iPad.
The iPadís success has been a result of a combination of innovative hardware that looks and works nearly perfectly, and software that’s simple to use, plus hundreds of thousands of apps that allow you to do almost anything. Like few products in history, the iPad is something that’s equally appealing to all ages. Bezos’ strategy is quite different. It’s to offer tablets at a lower cost and to focus on selling lots of content and merchandise directly from the device through the use of aggressive advertising. He expects that users will buy a lot of stuff, making up for the tablet’s discounted price.
Amazon is loading up its tablets with ads that appear on the start-up screen and on nearly every other page; youíll not be able to escape them. There will even be special apps that can sell merchandise from within the app itself. The idea is to bombard users with ads and to try to convince them to buy something from Amazon while using the product. The company is gambling that its customers will tolerate the ads in exchange for an 8.9-inch tablet priced $100 lower than the 9.7-inch iPad2 and $200 below the new 9.7-inch iPad. Bezos says he’s giving his customers what they want.
But, the pushback from major national reviewers and the public have been highly critical. The Verge (theverge.com), a popular gadget website, said that the “Ads on the Fire can at times feel like the most blatantly pushy, consumer-focused, retail-oriented device ever made. There is no shame in what Amazon is doing ó nearly everywhere that content lives on the device, the company is trying to push you toward more content. Even in places that might be considered sacred, like your home screen Ö And that's to say nothing of the full-screen lock screen ads, and subtle, sneaky text ads that populate the corners of the device.”
So how good is the Amazon device? Itís a plain-looking flat slab with none of the design elegance of the iPad’s software or hardware. The other huge difference is that Apple’s iPad is successful, due in large part to its enormous selection of apps. There’s an app that will do just about anything you want to do, and do it very well. Amazon's small app store covers just many of the basics, but can’t compare.
What was surprising was that Bezos never directly mentioned in his presentation that the devices were ad-supported. Instead, he focused on its low price and Apple-like performance. That fact emerged during a question-and-answer period at the end of his presentation, which led to an outcry from the audience about not being able to opt out of the ads. First Amazon said ads could not be removed, but a short time later, the company relented, offering an option some time in the future to remove ads for an additional $15. (Additionally, an AC charger is optional at $30, bringing it well over $299).
The Amazon Fire HD 8.9 Tablet will also be available with a built-in AT&T 4G wireless connection for $200 more at $499. Bezos announced what he called a breakthrough plan that costs $50 per year for 250MB of data each month. He compared it to the $15/month that AT&T charges on the iPad for the same amount of data. On the surface that sounds quite attractive, but 250MB of data is not enough to download one movie and barely enough for light browsing and email use throughout the month. No mention was made of the cost if you go over.
Yet, AT&T has recently announced new phone plans that allow you to buy a chunk of data and share it among all of your devices, without the 250MB/device limitation. That data costs about a third, making the $15/month plan less attractive.
Bezos continues to claim his new tablet to be a serious competitor to the iPad, donít believe it. It will likely only satisfy diehard Amazon fans who appreciate having a vending machine on their tablet.
(Disclosure: I provide product development services to companies that, in some cases, may compete with Amazon).
Baker is the author of "From Concept to Consumer" published by Financial Times Press and available at Barnes and Noble, Amazon, and other booksellers. He has developed and marketed consumer and computer products for Polaroid, Apple, Seiko and others, holds 30 patents and is an Ernst & Young Entrepreneur of the Year. Phil can be heard on KOGO AM the first Sunday of each month. Send comments to phil.baker@sddt.com. Comments may be published as Letters to the Editor. Phil's blog is http://blog.philipgbaker.com and his Web site is philipgbaker.com
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