Amazon's Kindle Fire is burning up BestBuy.com. Kindle sales quadrupled over last year's, according to the company. Amazon said it was making "millions" more Fires than it had planned, based on the overwhelming response.
But what's happening here is bigger than this or even the popular thread in which tech writers declare the Fire a bona fide threat to the iPad. Amazon's overall strategy behind the product could provide a road map for digital players to fast-track their own platforms into full-blown ecosystems capable of competing with the likes of Apple and Google, too.
Right, right, ecosystems. Again. But Amazon has reminded everyone just how it important it is to hold users' hands and walk them exactly where you want them to go—and make sure the destination is worth the journey. The company has managed to pull off a major coup here: An online retailer who barely makes any hardware just schooled every single tablet manufacturer (save one) in creating a splash both in hype and sales of a tablet. And it did it without even tablet-optimized software—Fire runs Android 2.3 Gingerbread, not Honeycomb.
It pulled off the feat by focusing on the platform first, and the hardware a distant second. The ultra-cheap $199 price was definitely a factor, too, but that wouldn't have been possible if Amazon didn't have a plethora of services at the ready for Fire buyers (eaters?) to dive into. Amazon correctly took the approach of first figuring out everything consumers would do with the tablet (and everything the company would sell), then building the right hardware to do it, rather than the reverse, which was what everyone else was doing.
"That's a pretty good move for Amazon," says Harry Wang, director of mobile research at Parks Associates. "Content library size and choices are very much important in the war of ecosystems—it is a critical factor to build a user base, and a large, loyal user base will reinforce market position and boost its leverage against content suppliers and partners."
Until recently, conventional wisdom in the tablet market dictated you either built your own platform from the ground up or played nice with Google. The former isn't a viable strategy for most. Microsoft is trying to do it with Windows Phone and Windows 8, but the company is so big and bloated that it's years behind in this game and still hasn't made any notable progress. The webOS platform, though a promising OS, was tragically never given the support it needed to become a real ecosystem. It's too early to say for RIM's QNX/BBX software, but given the clumsy launch of the PlayBook and RIM's grim-and-getting-grimmer outlook, it's looking like a nonstarter.
That leaves everyone else with Android. Up until now, tablet manufacturers have relied on Google to provide not just the OS, but the ecosystem. After all, Acer and HTC aren't in the business of delivering content or digital services. Google is, certainly, but it's slowly discovered that providing a multitude of loosely intertwined services and integrating them into an smooth and well-managed environment are two different things. One example: Without a central nervous system like iTunes, it's incumbent on the user to figure out how to do simple things like integrating an iTunes library with an Android device. The release of Google Music last month is an important step in the right direction, but it may be too little, too late.
Amazon has its own music store, of course, and it's front and center on the Fire along with the company's many other services. But besides that obvious positioning, the brilliance of Amazon's plan was that it was able to bring the device to market with relative ease (it essentially just picked out the same hardware as the PlayBook) by slicing off its own little territory within the Android platform. While others have pursued platform strategies by building (or in the case of Microsoft, rebuilding) complete OSes, Amazon let Google do the heavy lifting here, then carefully flushed out Google's services in favor of its own.
The big question: Can others replicate the success of Amazon's strategy? One player has been trying for a while, and that's Barnes & Noble with its Nook Color and Nook Tablet devices. However, B&N has no credibility selling anything besides books, and doesn't appear to be interested in moving into delivering more kinds of content. To take full advantage of Amazon's Fire road map, a company would have to already have the architecture in place for those other revenue streams. It would need some kind of unique content or service, the basic platform in place, and the resources to adapt it. Right now, the best candidate that appears to fit that bill is Sony.
Sony just swallowed up Sony Ericsson, ostensibly to finally get serious about mobile, and it's recently dabbled in tablets. But the real interesting stuff at Sony is happening with PlayStation, which earlier this year announced it would soon spread its gaming platform to other mobile devices. That could be the first step toward a broader Sony ecosystem that does much more than games, bridging music, movies, and more between tablets, phones, Blu-ray players, and TVs—all backed by highly customized Android.
"Sony is interesting in this category because they're the only ones who already have a platform," says Tom Mainelli, a mobile research director at IDC. "If anyone was was going to do it, it's them. Sony's got a lot of engineering background, and they've created a lot of apps over the years, so they may have the software chops, too."
Adopting this Android-in-name-only strategy has its challenges, but now that Amazon (and to a lesser extent, Barnes & Noble) has shown how lucrative it can be, companies who are hungry to compete in the digital arena have a road map to fast-tracking their platforms to the mass market. The war among ecosystems may end up having more sides than anyone ever thought.
[Image: Flickr user steph]