The case against the Kindle as a low end tablet disruption

>"Disruption requires asymmetry but it also requires the ability to go up a trajectory of improvement along the basis of performance that a majority of users demand"

The premise upon which this depends requires construing the Fire as Amazon's ground zero entry into the segment and dogmatic acceptance of the standard narrative in which the market segment for tablets or slates did not exist prior to the introduction of touchscreen devices in the form of Apple's iPad.

But neither is the case, just as smartphones were available for years before the introduction of the iPhone, likewise, the Fire is an extension of Amazon's well established product line - an extension which given the naming convention Amazon has employed (Kindle -> Fire), one may reasonably suspect has been on the drawing board for quite some time.

Another way to look at the potential for disruption which the Fire may hold is to consider it as an extension of the disruption Android caused in the smartphone market; i.e. making touchscreen smartphones ubiquitous commodity devices. Indeed, Amazon's agenda with the Fire (and Kindle) is more analogous to Google's with Android than to Apple's for the iPad.

> "The iPhone is also a subsidized product and it seems very successful. How come it won? The answer is in details."

One of the other relevant details is that any subsidies that are provided are done so by the wireless carriers, not Apple. Apple gets paid in full for each iOS device sold, either by the carrier (iPhones), or by the customer direct (the other iOS devices). By being immediately profitable on each iOS device, Apple has no "subsidy variables" to factor into its profitability -v- product lifecycle calculations.

Let's see how long that price is sustainable. There's no point to buy Kindle and not to buy any books, so subsidied Kindle will earn money to Amazon. But not so with Fire, you can (and there will literaly be millions and millions of cheapskates who will do exactly that) buy it and not buy anything from Amazaon after that. So I predict that Fire will be Amazons Bing.

However, one way in which Amazon can make a ton of money on the Kindle Fire is to use their Silk browser to replace ads in search results and web pages on Fire devices. They can do this because Silk is effectively a rewriting proxy. Customers may stick with Silk anyway because the pages will load more quickly. There will be backlash, but Amazon may decide to do this anyway. Obviously, they would only replace a small percentage of the ads so as not to be cut off. Alternatively, they can use Silk data to better target Fire ads. to users outside of the browser, or with interstitials.

The Kindle Fire really has nothing going for it except for the large screen and the price.