With Amazon making this announcement a month before Apple unveils the iPad mini, it gives Tim Cook time to rethink his strategy. If Apple planned on releasing the mini with a 7.85" 1024x768 screen at $299 then they now know that something more aggressive is required.
Tim earns the big bucks because he is paid to anticipate competitive moves and have answers at his fingertips... and to have Apple in a position that they are agile enough to implement what is necessary, when it is necessary.
There are several alternatives available to Tim:
do nothing
market the advantages of global distribution and infrastructure vs US only, for Amazon
adjust iPad 2 pricing/SSD
adjust iPad 3 pricing/SSD
introduce a new iPad at competitive pricing specs
become a MVNO for iPad data
BTW, the iPads have a 4:3 aspect ratio (1024x768 and 2048x1536).
AAPL and GOOG slightly up from when the Amazon presentation started... AMZN slightly down.
There was about a $3 plus/minus range for APPL; $2 for GOOG; and about $5.50 for AMZN
Well now they're all up so I guess everyone is excited, though I have a feeling that only Amazon is being directly affected by the announcement of the Kindle. Apple has the iPhone 5 announcement and rumors that are probably helping drive it up.
Tim earns the big bucks because he is paid to anticipate competitive moves and have answers at his fingertips... and to have Apple in a position that they are agile enough to implement what is necessary, when it is necessary.
There are several alternatives available to Tim:
do nothing
market the advantages of global distribution and infrastructure vs US only, for Amazon
adjust iPad 2 pricing/SSD
adjust iPad 3 pricing/SSD
introduce a new iPad at competitive pricing specs
become a MVNO for iPad data
BTW, the iPads have a 4:3 aspect ratio (1024x768 and 2048x1536).
I think doing NOTHING would be a mistake. Microsoft has shown us you can just sit around as top dog forever if you never respond to the world around you. That said, it doesn't happen overnight. Apple might not have enough time to have a major change in strategy for the iPad mini, but I don't believe that hurt them.
I have confidence Apple will do something. They changed their tune on a 7-inch iPad, so I am confident Apple will respond in someway.
Looks like Amazon doesn't care to make any margin on hardware and they must be taking a hit on the data plan. Compelling price for sure, but I still like Apple's ecosystem better. You should always question why someone is willing to take loss to sell you something.
With Amazon making this announcement a month before Apple unveils the iPad mini, it gives Tim Cook time to rethink his strategy. If Apple planned on releasing the mini with a 7.85" 1024x768 screen at $299 then they now know that something more aggressive is required.
I don't care if Tim Cook adjusts the price. But he'd better be looking at how people react to this for sure. I don't want to say this is the biggest challenger to the iPad ever, but it is the right way to challenge the iPad. Don't copy. Research and find out what people wish the iPad would do and fulfill those wishes. I think Amazon did some major homework on this thing....
I watched the ARS liveblog... and at the beginning of the intro of the new Kindles, Bezos defined them as more of a "service" than a device...
AMZN stock dropped quite a bit -- I think the market, the audience (me included) thought that this was because the new Kindles were meh devices and Bezos was trying to sell the sizzle because there was nothing exceptional about the steak.
At the same time I thought it was a clever approach and could be sold if implemented properly. (One of the most compelling things about iOS on the iPad is that it is invisible -- it doesn't get between you and your stuff).
Promoting the Kindle as the portal to a service (or the service, itself) could be a brilliant marketing strategy.
The other thing that caught my eye was the $50/yr data plan... Amazon must be acting as an MVNO. I always thought that Apple should to this -- at least for the iPads, but even for the iPhones.
You should always question why someone is willing to take loss to sell you something.
Ummm....why?
Printers did it for years (may still do). The make up for it in ink.
Game consoles do every generations. PS3 and Xbox 360 probably only became profitable hardware in the last few years. Make up for loss in games and accessories.
Mobile carriers sell phones at a loss and make up for it in cell phone bill.
I seriously don't get your statement. It isn't an uncommon strategy in tech to sell something at a loss and make it up elsewhere. All it says is Amazon is more interested in content than devices.
Heck, they had a graphic of a various phones and tablets with the word "Interoperability". They advertised at the Kindle event that Amazon Content works on more than Kindle. That answers your question. They sell at a loss because they're major focus is content.
I also think this is why you never heard a direct assault or attack of Apple. Amazon needs Apple for a content strategy to work, seeing as there are many more iPads out there than Kindle Fires.
Too true. I travel a lot and my current 2gig per month(ipad) gets eaten up surprisingly quickly. Heck, some web sites eat up 250k just loading.
I wonder what the penalty rate is for going over your limit?
Printers did it for years (may still do). The make up for it in ink.
Game consoles do every generations. PS3 and Xbox 360 probably only became profitable hardware in the last few years. Make up for loss in games and accessories.
Mobile carriers sell phones at a loss and make up for it in cell phone bill.
I seriously don't get your statement. It isn't an uncommon strategy in tech to sell something at a loss and make it up elsewhere. All it says is Amazon is more interested in content than devices.
Heck, they had a graphic of a various phones and tablets with the word "Interoperability". They advertised at the Kindle event that Amazon Content works on more than Kindle. That answers your question. They sell at a loss because they're major focus is content.
And yet, in the eBook case, Amazon was also aggressively pricing the content at or below cost. Interesting strategy. I find it hard to believe its sustainable, so you do have to question their endgame and whether it involves hooking you into their ecosystem and then raising prices over time.
Good points here I think. It really will boil down to execution (though it could be executed worse than Apple, but 'good enough') but I still think Apple has to reconsider price points now.
Neither you nor anyone else outside Cupertino likely has any idea if an iPad mini even exists and, if it does, what the price points will be. Geesh! Everything about price has been mere speculation.
And yet, in the eBook case, Amazon was also aggressively pricing the content at or below cost. Interesting strategy. I find it hard to believe its sustainable, so you do have to question their endgame and whether it involves hooking you into their ecosystem and then raising prices over time.
They make it up in volume. And considering the stock just hit a 52 week high at $251, I guess the big money agrees with them.
And yet, in the eBook case, Amazon was also aggressively pricing the content at or below cost. Interesting strategy. I find it hard to believe its sustainable, so you do have to question their endgame and whether it involves hooking you into their ecosystem and then raising prices over time.
It's a valid point but I think the two are unrelated, though it is risky. I think you're belief that Amazon is trying to lure people in comes from a distrust of Amazon, but it doesn't make sense. Amazon pissed a lot of publishers off with the move. Amazon prices publishing content below cost is a risky move to drive the price down. Publishers feel the strategy is destroying the industry but this story sounds familiar....
At the end of the day what Amazon is doing with publishing isn't much different than what Apple did with music. Apple basically forced the labels to use their price structures, to the dismay of the labels. If a publisher won't budge, Amazon sets the price where wants it and takes the hit. Labels condemned Apple and claimed they were ruining music. Publishers condemn Amazon and claim they're ruining publishing.
Eventually Apple did agree to be a bit more flexible when the labels agreed to provide something in return, but that took years or negotiating and complaining. Labels were slow to give in or offer Apple anything. I am sure Apple still has to abide by terms they would rather not be constrained to.
Printers did it for years (may still do). The make up for it in ink.
Game consoles do every generations. PS3 and Xbox 360 probably only became profitable hardware in the last few years. Make up for loss in games and accessories.
Mobile carriers sell phones at a loss and make up for it in cell phone bill.
I seriously don't get your statement. It isn't an uncommon strategy in tech to sell something at a loss and make it up elsewhere. All it says is Amazon is more interested in content than devices.
Heck, they had a graphic of a various phones and tablets with the word "Interoperability". They advertised at the Kindle event that Amazon Content works on more than Kindle. That answers your question. They sell at a loss because they're major focus is content.
So you have thought of it and yet you don't understand his comment?
The other thing that caught my eye was the $50/yr data plan... Amazon must be acting as an MVNO.
I don't think so. I think it's an extension of the same deals they done with carriers in the past for the 3G connected Kindles. It's a good deal for a great many users but it's not a low cost per GB deal. It's a total of 3GB for $50. The benefit is that it's good over a year. If you need 3GB on your iPad per month I think it only costs around $30.
3GB (250MB per month) of data for $50. This is good only for the first year. What about afterwards? Other data plans - 3GB and 5GB - are also available. But, no pricing info yet.
When you think about it, the pricing for data is not that big a deal. Obviously, Amazon must have reached a re-selling agreement with AT&T or Verizon (or both) where there is a minimum guarantee.
If you get a 3GB per month plan for your iPad from AT&T, it's $30 per month. Of course, 250MB per month would run you $15 per month, or $180 per year.
Pretty clever of Amazon. Apple can do the same thing. Don't know if they will.
As for the pricing of the 32GB 8.9" Fire HD at $499, I would like to see a detailed comparison with the iPad to decide if it is a great value.
Ok folks for the bickering and bashing on Apple just wait until the mini comes out and iOS 6 is out I guarantee you that apple will address these multiple login issues as well as parental controls (they were the first ones to integrate this on the Apple Mac OSX Software many years ago and will prob integrate this feature on these up and coming updates it makes sense at least now they can't ignore it since Amazon has beat them to the punch with this capability so we will see ...
So you have thought of it and yet you don't understand his comment?
I believe I see what you are saying, but I believe the tone of his comment implied Amazon was hiding some dirty secret. I could have misinterpreted his comment.
The wording implied more to me than just a general curiosity. You "question" something you don't trust. My point was we purchase other products that use similar strategies without questioning the motives or intent because the intentions are obvious or we simply don't care. I think Amazon's intention are just as obvious and the "sell at a loss" move is not exactly some earth shattering, untested strategy.
Comments
Quote:
Originally Posted by MacVicta
With Amazon making this announcement a month before Apple unveils the iPad mini, it gives Tim Cook time to rethink his strategy. If Apple planned on releasing the mini with a 7.85" 1024x768 screen at $299 then they now know that something more aggressive is required.
Tim earns the big bucks because he is paid to anticipate competitive moves and have answers at his fingertips... and to have Apple in a position that they are agile enough to implement what is necessary, when it is necessary.
There are several alternatives available to Tim:
do nothing
market the advantages of global distribution and infrastructure vs US only, for Amazon
adjust iPad 2 pricing/SSD
adjust iPad 3 pricing/SSD
introduce a new iPad at competitive pricing specs
become a MVNO for iPad data
BTW, the iPads have a 4:3 aspect ratio (1024x768 and 2048x1536).
Quote:
Originally Posted by Dick Applebaum
AAPL and GOOG slightly up from when the Amazon presentation started... AMZN slightly down.
There was about a $3 plus/minus range for APPL; $2 for GOOG; and about $5.50 for AMZN
Well now they're all up so I guess everyone is excited, though I have a feeling that only Amazon is being directly affected by the announcement of the Kindle. Apple has the iPhone 5 announcement and rumors that are probably helping drive it up.
Quote:
Originally Posted by satchmo
It's confusing and it doesn't help when Amazon doesn't have a webpage up explaining the new offerings (at least I'm not seeing it anywhere).
That's one thing Apple gets right. Have the info up, the moment after a keynote!
PR:
http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=1732546&highlight=
7" HD is confirmed 1280x800
Quote:
Originally Posted by Dick Applebaum
Tim earns the big bucks because he is paid to anticipate competitive moves and have answers at his fingertips... and to have Apple in a position that they are agile enough to implement what is necessary, when it is necessary.
There are several alternatives available to Tim:
do nothing
market the advantages of global distribution and infrastructure vs US only, for Amazon
adjust iPad 2 pricing/SSD
adjust iPad 3 pricing/SSD
introduce a new iPad at competitive pricing specs
become a MVNO for iPad data
BTW, the iPads have a 4:3 aspect ratio (1024x768 and 2048x1536).
I think doing NOTHING would be a mistake. Microsoft has shown us you can just sit around as top dog forever if you never respond to the world around you. That said, it doesn't happen overnight. Apple might not have enough time to have a major change in strategy for the iPad mini, but I don't believe that hurt them.
I have confidence Apple will do something. They changed their tune on a 7-inch iPad, so I am confident Apple will respond in someway.
Looks like Amazon doesn't care to make any margin on hardware and they must be taking a hit on the data plan. Compelling price for sure, but I still like Apple's ecosystem better. You should always question why someone is willing to take loss to sell you something.
With this announcement anyone think Samsung will still bother to release new Galaxy Tab in the US this year?
Quote:
Originally Posted by rednival
Quote:
Originally Posted by MacVicta
With Amazon making this announcement a month before Apple unveils the iPad mini, it gives Tim Cook time to rethink his strategy. If Apple planned on releasing the mini with a 7.85" 1024x768 screen at $299 then they now know that something more aggressive is required.
I don't care if Tim Cook adjusts the price. But he'd better be looking at how people react to this for sure. I don't want to say this is the biggest challenger to the iPad ever, but it is the right way to challenge the iPad. Don't copy. Research and find out what people wish the iPad would do and fulfill those wishes. I think Amazon did some major homework on this thing....
I watched the ARS liveblog... and at the beginning of the intro of the new Kindles, Bezos defined them as more of a "service" than a device...
AMZN stock dropped quite a bit -- I think the market, the audience (me included) thought that this was because the new Kindles were meh devices and Bezos was trying to sell the sizzle because there was nothing exceptional about the steak.
At the same time I thought it was a clever approach and could be sold if implemented properly. (One of the most compelling things about iOS on the iPad is that it is invisible -- it doesn't get between you and your stuff).
Promoting the Kindle as the portal to a service (or the service, itself) could be a brilliant marketing strategy.
The other thing that caught my eye was the $50/yr data plan... Amazon must be acting as an MVNO. I always thought that Apple should to this -- at least for the iPads, but even for the iPhones.
Quote:
Originally Posted by mstone
You should always question why someone is willing to take loss to sell you something.
Ummm....why?
Printers did it for years (may still do). The make up for it in ink.
Game consoles do every generations. PS3 and Xbox 360 probably only became profitable hardware in the last few years. Make up for loss in games and accessories.
Mobile carriers sell phones at a loss and make up for it in cell phone bill.
I seriously don't get your statement. It isn't an uncommon strategy in tech to sell something at a loss and make it up elsewhere. All it says is Amazon is more interested in content than devices.
Heck, they had a graphic of a various phones and tablets with the word "Interoperability". They advertised at the Kindle event that Amazon Content works on more than Kindle. That answers your question. They sell at a loss because they're major focus is content.
(imaged linked from Engadget - http://www.engadget.com/2012/09/06/live-from-amazons-santa-monica-press-conference/)
EDIT:
I also think this is why you never heard a direct assault or attack of Apple. Amazon needs Apple for a content strategy to work, seeing as there are many more iPads out there than Kindle Fires.
Too true. I travel a lot and my current 2gig per month(ipad) gets eaten up surprisingly quickly. Heck, some web sites eat up 250k just loading.
I wonder what the penalty rate is for going over your limit?
And yet, in the eBook case, Amazon was also aggressively pricing the content at or below cost. Interesting strategy. I find it hard to believe its sustainable, so you do have to question their endgame and whether it involves hooking you into their ecosystem and then raising prices over time.
Quote:
Originally Posted by OriginalG
Good points here I think. It really will boil down to execution (though it could be executed worse than Apple, but 'good enough') but I still think Apple has to reconsider price points now.
Neither you nor anyone else outside Cupertino likely has any idea if an iPad mini even exists and, if it does, what the price points will be. Geesh! Everything about price has been mere speculation.
Quote:
Originally Posted by Pendergast
And yet, in the eBook case, Amazon was also aggressively pricing the content at or below cost. Interesting strategy. I find it hard to believe its sustainable, so you do have to question their endgame and whether it involves hooking you into their ecosystem and then raising prices over time.
They make it up in volume. And considering the stock just hit a 52 week high at $251, I guess the big money agrees with them.
Quote:
Originally Posted by Pendergast
And yet, in the eBook case, Amazon was also aggressively pricing the content at or below cost. Interesting strategy. I find it hard to believe its sustainable, so you do have to question their endgame and whether it involves hooking you into their ecosystem and then raising prices over time.
It's a valid point but I think the two are unrelated, though it is risky. I think you're belief that Amazon is trying to lure people in comes from a distrust of Amazon, but it doesn't make sense. Amazon pissed a lot of publishers off with the move. Amazon prices publishing content below cost is a risky move to drive the price down. Publishers feel the strategy is destroying the industry but this story sounds familiar....
At the end of the day what Amazon is doing with publishing isn't much different than what Apple did with music. Apple basically forced the labels to use their price structures, to the dismay of the labels. If a publisher won't budge, Amazon sets the price where wants it and takes the hit. Labels condemned Apple and claimed they were ruining music. Publishers condemn Amazon and claim they're ruining publishing.
Eventually Apple did agree to be a bit more flexible when the labels agreed to provide something in return, but that took years or negotiating and complaining. Labels were slow to give in or offer Apple anything. I am sure Apple still has to abide by terms they would rather not be constrained to.
So you have thought of it and yet you don't understand his comment?
NM
Anyone else thinks Sammy had another crisis of design?
I don't think so. I think it's an extension of the same deals they done with carriers in the past for the 3G connected Kindles. It's a good deal for a great many users but it's not a low cost per GB deal. It's a total of 3GB for $50. The benefit is that it's good over a year. If you need 3GB on your iPad per month I think it only costs around $30.
3GB (250MB per month) of data for $50. This is good only for the first year. What about afterwards? Other data plans - 3GB and 5GB - are also available. But, no pricing info yet.
When you think about it, the pricing for data is not that big a deal. Obviously, Amazon must have reached a re-selling agreement with AT&T or Verizon (or both) where there is a minimum guarantee.
If you get a 3GB per month plan for your iPad from AT&T, it's $30 per month. Of course, 250MB per month would run you $15 per month, or $180 per year.
Pretty clever of Amazon. Apple can do the same thing. Don't know if they will.
As for the pricing of the 32GB 8.9" Fire HD at $499, I would like to see a detailed comparison with the iPad to decide if it is a great value.
Bitzandbitez
Quote:
Originally Posted by SolipsismX
So you have thought of it and yet you don't understand his comment?
I believe I see what you are saying, but I believe the tone of his comment implied Amazon was hiding some dirty secret. I could have misinterpreted his comment.
The wording implied more to me than just a general curiosity. You "question" something you don't trust. My point was we purchase other products that use similar strategies without questioning the motives or intent because the intentions are obvious or we simply don't care. I think Amazon's intention are just as obvious and the "sell at a loss" move is not exactly some earth shattering, untested strategy.