Amazon focuses on Apple with its new Kindle Fires

Earlier today, Amazon announced a refresh of its entire line of Kindle eReaders and tablets. The company announced a new eReader, a lower price for its entry-level eReader, an improved version of the Kindle Fire, and a new Kindle Fire HD line with three models. Perhaps even more interesting than the devices themselves is that Amazon said that it's services, not "gadgets", that are important, and it's explicitly positioning its devices as the delivery mechanism for its services. Amazon's metric for success is how many goods and services it sells through its devices, not how many devices it sells.

Here are the details:

• The Kindle Paperwhite is the new eReader. It's got a sharper, front-lit display with 25% more contrast and 212 ppi resolution (62% more pixels than before,) with a capacitive touch screen. Amazon claims that the display and lighting systems are both proprietary. The lighting system took four years of R&D and uses a flattened-out optical fiber for even illumination, instead of the discreet LEDs that B&N uses. Amazon claims 8 weeks of battery life. The eReader is 9.1mm thick. The Wi-Fi version is priced at $119, pre-orders begin today and it ships October 1st. The 3G version is priced at $179, same availability.
• The "$69 Kindle"--that's what they're calling it--appears to be the current $79 ad-supported model, just marked down $10. Pre-orders begin today, ships September 14th.
• The updated Kindle Fire has a faster processor, 1GB of RAM (vs. 512KB in the original model,) 40% better performance, a front-facing camera and longer battery life. Price is $159 (down from $199), and it ships September 14th.
• The Kindle Fire HD line is entirely new, and it comes in three models that will ship on November 20th:
• A 7" model for $199
• An 8.9" model for $299
• The same 8.9" model with 4G LTE and twice as much memory for $499, compared to $729 for the roughly comparable new iPad
• All three models use the same basic hardware: The touch screen is laminated directly to the display for 25% less glare and better contrast. They use TI OMAP 4400 series processors--4460 in the 7" tablet, 4470 in the 8.9" model (Jeff Bezos claims that they're better than the Tegra 3, but they only have dual cores vs. the Nexus 7's Tegra 3 with quad cores.) They have built-in stereo speakers with Dolby Digital Plus, and also have Bluetooth and HDMI out, along with front-facing HD cameras and Skype. The tablets have both 2.4 GHz and 5GHz 802.11n, with dual antennas for better reception and speed--Amazon claims that the tablet's Wi-Fi speed is 41% faster than that of the new iPad. 
• The new 7" Kindle Fire HD has 1280x800 resolution, while the 8.9" models have 1920x1200 resolution, 254 ppi IPS displays. By comparison, the new iPad's Retina display is 9.7", 2048x1536, 264 ppi resolution. Given the slightly smaller screen on the Kindle Fire HD, most users won't be able to tell the difference in resolution. The screen of the 8.9" model is big enough for two-page magazine (and, presumably, eBook) displays.
• The 7" and base 8.9" models ship with 16GB of memory; the Kindle Fire HD with 4G LTE ships with 32GB of memory.
• Buyers of the 4G LTE model can sign up 250MB/month of data usage, 20GB of cloud storage and a $10 Appstore credit, for $49.99/year. (Given that Amazon is encouraging customers to keep all their eBooks and media in the cloud, that 250MB is likely to run out pretty quickly.)
• The updated Kindle Fire and Kindle Fire HD models run a customized version of Android 4.0.3 (Ice Cream Sandwich.) The original Kindle Fire apparently will not be able to upgrade to the new version of the operating system.
• According to Engadget, the physical design and build quality of all the new Kindle Fire models is far better than that of the original Kindle Fire.
• The user interface has been updated, and some elements, like the "wood bookcase", are gone. The Kindle's "X-Ray" feature for books has been extended to movies (via IMDB, which Amazon owns), audiobooks and eTextbooks..There's now built-in Facebook and Twitter support, and many improvements to email. A new FreeTime feature offers much more extensive parental controls--parents can specify when and how long their kids can read books, play games, watch video, etc. And, parents can set different limits for each child. The screen's background turns blue when the tablet's in FreeTime mode.
• Audible's 100K audiobooks have been added to Amazon eBookstore. Whispersync for Voice allows audiobooks on multiple devices to be synchronized--stop listening on one device, open the audiobook on another device and start listening right where you left off. The Audible audiobooks will display their text at the same time on Kindle tablets, with the text synchronized with the narration, and with real-time highlighting (called Immersion Reading.) Amazon is also launching Whispersync for games--synchronizes game levels between multiple devices.
• Amazon is launching a collection of serialized eBooks as Kindle Serials. Customers can buy a Serial once and get all the installments. Each new installment is automatically appended to the existing portion, and there's support for reader discussion. The product line is launching with eight titles. $1.99 each, and Amazon is making Dickens' Pickwick Club and Oliver Twist available for free.

comScore surveys tablet buyer demographics and reasons for buying

comScore has released its first comScore TabLens report, a monthly survey covering U.S. tablet ownership and usage. The survey consists of a three-month rolling sample of 6,000 U.S. tablet owners. The first report covers tablet buyer demographics and reasons for purchasing. Here's a summary of the findings:

• Overall, tablet ownership is split exactly 50% men/50% women, with heaviest ownership in the 25-34 year old age group and with respondents whose household income is $100K/year or more.
• iPad owners are more heavily male (52.9% male/$47.1% female).
• Kindle Fire owners are more heavily female (56.6% female/43.4% male).
• Owners of other Android tablets are slightly more male than female (50.9% male/49.1% female).
• Owners of all three kinds of tablets have a similar distribution of age groups and household income, except that the iPad has more owners with $100K or greater household income than the other two tablets (46.3% for the iPad, vs. 33.3% for the Kindle Fire and 32.5% for other Android tablets.)
• The most important factors for buyers of the iPad are 1) Selection of apps, 2) Brand name of the tablet, and 3) The tablet's operating system.
• For Kindle Fire buyers, the three most popular factors are 1) The price of the tablet, 2) Selection of apps, and 3) Brand name of the tablet, and music and video capabilities (tie).
• For other Android tablet buyers, the three most popular factors are 1) The price of the tablet, 2) The tablet's operating system, and 3) Selection of apps.
• The iPad had the highest overall device satisfaction (8.8 out of 10), followed by the Kindle Fire (8.7) and other Android tablets (8.2).

Which eReaders and tablets support multimedia and CSS3 features?

Vook has put together a list of some of the devices that support multimedia enhancements, along with the maximum eBook size on each device (which turns out to be dramatically affected by both the device and eRetailer), and a list of CSS elements that can be controlled in Vook's editor, with which devices they're supported on. Here's a summary:

• Only iOS devices running iBooks and the Kindle app, and the Nook Color and Nook tablet, support multimedia enhancements. The only desktop PC eReader that supports the enhancements is Vook's own Reader software. 
• Here are the maximum file sizes for various devices and eBookstores--conventional publishers (with "Vendor of Record" accounts) get far more file space than do self-publishers, which makes self-published multimedia-enabled eBooks impractical:
• Apple's iBookstore: 2GB 
• Barnes & Noble Pubit! (self-publishing): 20MB 
• Barnes & Noble via Vook distribution relationship: 600MB 
• Amazon Kindle Direct Publishing: 50MB 
• Amazon via Vook distribution relationship: 650MB
• The Vook source link has much more information, but in general: 
• iOS devices handle all the CSS3 attributes. 
• Nook devices (both eReaders and tablets) handle all the CSS3 attributes. 
• Kindle devices handle only a subset of the CSS3 attributes, with the Kindle Fire supporting a few more than Kindle eReaders. 

28% of all library patrons want to download eBooks from their library; Kindles are the most popular devices for reading library eBooks

Digital Book World has a summary of a new Patron Profiles report from Library Journal and Bowker. Their survey found that 28% of all library patrons want to download eBooks from their public library, and almost two-thirds of patrons who already read eBooks want to be able to get them from their local library. Here are some other findings:

• eBooks are the most popular downloadable media for all respondents, followed by music and audiobooks. Video downloads are the fourth-most-popular media with everyone except existing eBook users, who prefer enhanced eBooks by a small margin.
• As far as eReading devices are concerned, Kindle eReaders are the most popular with both "power" media users and regular library patrons, by a significant margin. The next most popular device is the Kindle Fire, followed by the iPad, and then the Nook Color eReader and Nook black & white eReader, both of which were preferred by less than 10% of patrons.
• "Digital" patrons--those that own a smartphone, eReader or tablet--are more active library users than any other group, across all activities. 28% of library patrons own a smartphone, 16% own an eReader and 12% own a tablet.
• Only 3% of library patrons have used a dedicated app for their library, although many patrons would like to be able to access their library's online content via a mobile app.
• Library patrons that visit their library's website an average of once a week are generally dissatisfied with the quality of their library's website.

BISG survey says that eBook buyers are more willing to buy print

The Book Industry Study Group has just released the third part of Volume Three of its Consumer Attitudes Toward E-Book Reading research report. Here's a summary:

• The percentage of eBook buyers that exclusively or primarily purchase eBooks has dropped from nearly 70% last August to 60% in May 2012.
• The percentage of survey respondents with no preference for eBook or print formats, or who buy some genres in eBook format and others in print, has increased from 25% last August to 34% in May.
• Amazon's Kindle Fire has overtaken the iPad as the tablet of preference among eBook consumers. 7% of survey respondents owned a Kindle Fire last December vs. 20% in May 2012, while iPad ownership remained flat at 17% in both surveys. By comparison, 5% of respondents owned a Barnes & Noble Nook Tablet in May, and 8% owned another Android-based tablet.
• While overall use of tablets as primary eReading devices is increasing, the changes aren't uniform across devices:
• 35% of respondents cited Amazon's Kindle eReaders as their primary device for reading eBooks, down from 48% last August.
• Apple's iPad was cited as the primary device for reading eBooks by 9% of respondents in May, down from 10% in February.
• Respondents who cited Barnes & Noble's Nook tablets and eReaders as their primary device for reading eBooks declined from 17% last August to 13% in May.

Amazon misses on both revenues and profits, but the stock is up

According to Bloomberg, Amazon reported its Q2 financials after the close of the market today. Gross revenues were $12.8 billion, just short of the consensus analyst estimate of $12.9 billion but still up 29% year-over-year. Net income, however, was only $7 million, or $0.01/share, compared with $191 million or $0.41/share a year ago, and below the $0.03/share forecast by analysts.

The company claims that the decline in profits was due to big investments in distribution centers, but another factor was likely to be declines in sales of the Kindle Fire and Kindle eReaders. Analyst Mark Harding estimates that Amazon sold only 670,000 Kindle Fires in Q2 due to customers' expectations of an updated model (or models) later this year.

Amazon expects a Q3 loss of $50 million to $350 million compared to analyst expectations of a profit of $119.6 million, on sales of $12.9 billion to $14.3 billion, vs. analyst expectations of $14.1 billion. The company has built eight new fulfillment centers this year and plans to build ten more before the end of the year, and much of that expense will be loaded into Q3.

Amazon's stock closed at $220.01, and is currently priced at $222.80 in after-hours trading.

Business Insider iPad usage survey

Business Insider has done a survey of more than 2,200 iPad users to find out how they use their tablets. Here's a summary of the findings:

• Most respondents (almost 47%) use their iPads two to five hours a day on average. 
• 64% of respondents say that their iPad usage has increased since they first got their tablets. 
• iPads are quickly becoming users' primary computers. In the November 2010 survey, almost 71% of respondents said that a laptop or desktop was their primary computer, vs. 29% who said that their iPad was their primary computer. However, in the new survey, only 53% say that they use a laptop or desktop computer most often, vs. 47% who use their iPads most often. 
• Respondents said that they spend 41% of their personal computing time using an iPad, vs. 25% for a laptop computer and 17% for a desktop. (They also said that they spend 17% of their time using a smartphone.) 
• 71% of respondents say that they read eBooks on their iPads. 
• Apple's iBooks format has become the most popular eBook format for survey respondents, with 51.3% preferring it, vs. 36.5% for Kindle format and 12.2% for other formats. (In the November 2010 survey, the Kindle format was most popular, by 50% to 42.4% for iBooks and 7.6% for other formats.)
• iPad owners have little interest in tablets from competitors; only 10.4% are interested in the Google Nexus 7, and 5.5% are interested in the Kindle Fire. 
• Only 30.2% of current iPad owners have any interest in a smaller iPad. 

IHS iSuppli estimates Nexus 7's cost of materials is $151.75

All Things D reports that IHS iSuppli has torn down a Google Nexus 7 tablet and estimates the cost of materials for the 8GB model to be $151.75, and $159.25 for the 16GB model. That's about $30 less than the estimate released late last month by UBM Techinsights, which was made before they had a chance to tear down an actual tablet. At $151.75, IHS iSuppli believes that Google is breaking even on sales of the 8GB model ($199) and is making a nice profit on the 16GB model. Andrew Rassweiler, who runs the teardown team at IHS iSuppli, said "It’s (Google's) getting $50 more at retail for only $7.50 more in hardware cost, which sends $42.50 per unit straight to the bottom line."

The company believes that the Nexus 7 costs $18 more to build than the current Kindle Fire--which indicates that Amazon could easily release a second-generation Kindle Fire with comparable specs to the Nexus 7 at the same $199 price.

A race to the top, or to the bottom?

In the last few weeks, announcements and rumors have been flying about technology leaders launching new mobile computing products:

• Microsoft jumped into the tablet business with its Surface tablets for Windows RT and Windows 8.
• Google announced its Nexus 7 tablet, built by Asus.
• Amazon is rumored to be announcing a replacement for the current Kindle Fire in late July or early August.
• That was followed a couple of days ago by rumors from reliable sources that Apple plans to announce  a 7" to 8" iPad in September or October.
• Yesterday, Bloomberg broke a story that Amazon is working on a smartphone to be built by Foxconn, and is trying to acquire patents in order to protect itself from the widespread litigation between smartphone and software vendors.

Assuming that all the rumors are true, it means that Amazon, Apple, Google and Microsoft will be competing directly against each other with tablets and (with the exception of Microsoft) smartphones. The margins on mobile devices are very low--only Apple has figured out how to make solid margins on its hardware. Samsung is making money because it manufactures so much of its own products, and it sells so many of them. No one other than Apple and Samsung makes money on smartphones. As for tablets, Apple makes excellent margins, but according to the latest hardware cost breakdowns, Google is just about breaking even on the Nexus 7, while Amazon is making a small gross margin on its Kindle Fire.

If Apple jumps into the 7" tablet market, will it compete with Amazon and Google on price, or will it add features that they don't have, such as 4G support, in order to command a higher price? How does Amazon expect to differentiate its smartphones from the pack of Android models? When Microsoft's Surface tablets make it to market, will they be competitive?

With everyone cloning everyone else and making incremental improvements, are we nearing the point where there are no clear lines of differentiation for anyone? If:

• Everyone has access to the same components, 
• Everyone's trying take advantage of whatever gaps have been left by their competitors until they get filled, and
• Android Jelly Bean's user experience is finally competitive with iOS and Windows RT,

Doesn't that mean that competition will inevitably come down to the number of apps available, customers' investments in libraries of apps (which affects switching costs) and price? That's a market that looks very much like personal computers.

Virtually no profit in the Google Nexus 7

The Wall Street Journal reports on a preliminary estimate by UBM Techinsights of $184 for the cost of components in the new Google Nexus 7 tablet, which sells for $199. That barely allows Google to break even on direct sales, and it's losing money on sales through the channel. By comparison, UBM estimated that the Kindle Fire's cost of components was $153 last November. Specifications for the rumored Kindle Fire 2 are expected to be similar to that of the Nexus 7, and the component cost will most likely also be similar. However, Amazon could probably keep the existing Kindle Fire in the product line, at least as an interim product, at $149. At the same time, however, UBM's analysis suggests that the also-rumored 7" iPad is unlikely to be sold at $199, since Apple won't be able to make acceptable margins at that price. It's more likely to come to market between $249 and $299, if it ships at all.

More details about the rumored updated Kindle Fire

The China Times has some details about the rumored next-generation Kindle Fire:

• The next-generation Kindle Fire will be announced either at the end of this month or in early August. 
• It'll still be priced at $199, will have a metal chassis instead of plastic, and the display will come from LG Displays and Panasonic. 
• The screen will be higher resolution than the current model. 
• It may have a camera, which the current model lacks, but the translation that discusses this feature is very confusing. 
• Quanta, which builds the current model and will also build the new one, has received an initial order for two million units. 
• Heavy shipments of components for the new model started in June. 

There are no details on the processor, memory, graphics, etc., but I wouldn't be surprised to see them be very similar to the Google Nexus 7.

7" to 8" iPad coming in October?

Bloomberg is reporting that according to two unnamed sources, Apple plans to launch a 7 to 8 inch version of the iPad this year, possibly by October. One of the sources said that the new iPad wouldn't have a Retina Display. Analyst Shaw Wu of Sterne Agee & Leach Inc. said that such a new iPad, priced around $199, would be "competitors' worst nightmare." The low-cost iPad would be targeted at the Kindle Fire (or whatever 7" model Amazon has at that time) and the Google Nexus 7, and would be intended to help keep those (and similar) tablets from eroding Apple's market from below. It's widely expected that the new iPhone will be released in September, so if the new iPad is real, it's likely to be announced at the same time.

What the heck is Google thinking?

Now that we've had a chance to see Google's latest product announcements at its I/O Conference, it's clear that the company understands software just fine but doesn't have a clue about hardware. Android 4.1, Jelly Bean, looks like a strong, if incremental, update to Android, as do the enhancements to Google+. However, the new hardware has me scratching my head:

• There's nothing exciting about the new Nexus 7 tablet. Essentially, Google looked at what Amazon's Kindle Fire lacks--a front-facing camera and faster processor--added them, and gave the Nexus 7 the same price. In doing so, Google assumed that Amazon would stand still, when multiple rumors indicate that two new 7" tablets are due from Amazon as soon as this quarter. The price of the existing Kindle Fire is rumored to drop to $149, and a next-generation model with features very similar to the Nexus 7 is almost certainly not going to be priced more than $199. With Amazon's superior distribution, it's going to be very hard for Google to compete.
• The Nexus Q media player makes absolutely no sense to me. It's an Internet set-top box with a 25-watt stereo amplifier and a single HDMI output, priced at $299. It competes with low-end A/V receivers, Internet set-top boxes from companies such as Apple, Roku and Vizio, and portable Internet receivers from companies like Sonos. Most of the devices that it competes with are less expensive ($99 or less in the case of the Internet set-top boxes.) Its round shape makes it a poor fit with audio component systems, and in use, it'll have a myriad of cords attached on both the front and back of the device. It requires another Android device as a remote control. Google says that the Nexus Q is a "social jukebox," but is there really a market for a digital audio player that lets you screw around with other people's playlists?
• Google Glasses are vaporware; Google isn't committing to deliver anything for a year, yet wants developers to pay for them now. They're almost the perfect example of a product designed by engineers who have no idea what real consumers want. Google doesn't even know what the use cases will be; it wants developers to pay $1,500 to help it find out. The market is...skydivers who want low-resolution video cameras in their sunglasses? Engineers who want to look like dorks? People who can't be bothered to look down at their smartphone to see their messages?

When you put these projects together with Google's Chrome OS initiative, which is coming apart at the seams, and pipe-dream projects like self-driving cars, it's clear that all that Larry Page has done is kill off one set of unproductive projects in favor of a different set of equally unproductive projects. All the while, Google is continuing to bleed employees, and the company is being forced to add talent through ever-more-expensive acquisitions. It would be great if Google was doing fundamental research that's inventing entirely new technologies, as Bell Labs did for decades, but most of what's coming out of Google's efforts is...junk. Google's advertising revenues are subsidizing one of the most wasteful and undisciplined product development programs in the history of high tech. 

Gizmodo Australia claims to have read a training manual for Google's rumored tablet

Gizmodo Australia claims to have read a training manual for Google's rumored tablet to be launched this week at the Google I/O Conference. According to the document, the tablet will be called the Nexus 7, will be built by Asus, and will use a 1.3GHz quad-core Tegra 3 processor with 12-core GeForce GPU and 1GB of RAM. The 7" display will have 1280 x 800 resolution, and the tablet will have a front-facing 1.2 megapixel camera and a battery that will give 9 hours of runtime. It will support Near Field Communication (NFC) for wireless transactions, and Google Wallet. The document says that the tablet will run Jelly Bean, the next version of Android, but it doesn't mention a version number. The Nexus 7 will be sold in two configurations, 8GB for $199 (U.S.) and 16GB for $249.

Google's intention with the Nexus 7 is to compete with Amazon's Kindle Fire and keep customers out of Amazon's ecosystem. However, if Gizmodo's story is correct and rumors about Amazon's new tablets are also correct, Google may still find itself flat-footed. The Kindle Fire's price is said to be dropping to $149 very soon, to make way for a replacement model with better specifications in Q3, which will also be priced at $149. A second 7" model, with specifications similar to the Nexus 7, is supposed to also be released in Q3 of this year, probably at the same price(s) as the Nexus 7. Given Amazon's superior distribution and support capabilities, it's unlikely that the Nexus 7 will gain much traction, at least in North America.

Online Publishers Association releases survey of U.S. tablet users

The Online Publishers Association released a study conducted for it by Frank. N. Magid Associates: "A Portrait of Today's Tablet User, Wave II." Here's a summary of selected findings:

• Regular tablet users increased from 12% of the population (28.3 million people) in 2011 to 31% of the population   (74.1 million people) in 2012. 
• The OPA projects that in 2013, tablet users will increase to 47% of the population   (117.4 million people.) 
• The percentage of respondents using Android tablets increased dramatically: In 2011, the split was 72% iOS/23% Android/12% Other; in 2012, the split was 52% iOS/47% Android/14% Other, primarily due to the popularity of the Kindle Fire (percentages add up to more than 100% because some respondents own/use more than one type of tablet, but only one tablet per operating system was counted.) 
• The user base is getting older and richer: Tablet users ages 8-24 decreased 8% year-over-year, while tablet users ages 35-54 increased 8%. As for income, households earning $50K or more comprised 41% of the population sampled by the OPA, but 59% of tablet users. In fact, tablet users were overrepresented in every income bracket from $50K to $150K+. 
• 60% of tablet owners use their tablet several times a day; and addition 14% use it once a day. 
• The average amount of time that respondents spend using their tablet is 13.9 hours per week, with the most popular times for usage being between 5 p.m. and 11 p.m. 
• 67% of tablet usage is at home, 15% in school or at work, 14% when commuting or in a car, and 4% while shopping. 
• 94% of respondents in the 2012 survey use their tablet to access content/information, compared to 87% in 2011. 
• 69.7 million people use their tablets to access content/information in 2012, compared with 24.4 million in 2011. 
• 42% use their tablets to read eBooks in the 2012 survey, the same percentage as in 2011. 
• 31.1 million people use their tablets to read eBooks in 2012, compared with 11.8 million in 2011. 
• 35% of respondents have purchased at least one eBook for their tablets. 
• Videos are the most popular type of content accessed by tablet users, and the most popular type of videos are news and sports clips, weather forecasts, excerpts of TV shows, and other short-form news & entertainment. (Note that this doesn't include user-generated content on sites such as YouTube--that's the second most popular type of video.) 
• Tablet users prefer reading on tablets over reading on mobile phones, PCs, print newspapers and magazines, and dedicated eReaders such as the Kindle and Nook. However, the preferences for tablets vs. eReaders are the closest of all the options: 48% for tablets, 33% for dedicated eReaders, 19% "don't know." (By comparison, 71% of tablet users prefer reading on tablets rather than mobile phones, 23% prefer mobile phones, and 5% "don't know.") 
• Tablet users have downloaded an average of 22 apps over the last 12 months, of which 77% were free and 23% were paid. 

Google and Asus expected to unveil 7" Nexus tablet next week at Google I/O

DigiTimes reports that Google's and Asus' new 7" Nexus Android tablet, to be built for the companies by Quanta Computer (the same company that manufactures the Kindle Fire,) will be launched at next week's Google I/O Conference in San Francisco. The price will reportedly be $199, and the tablet is said to include a quad-core Tegra 3 processor and a front-facing webcam. DigiTimes also says that the tablet will be preloaded with Google's Chrome browser for Android; it's not clear if Chrome will replace or be installed in addition to the legacy Android browser.

DigiTimes reports that two new 7" Kindle tablets are under development for release in Q3

DigiTimes reports that Amazon is planning new Kindle tablets and hardware eReaders for release this year and in 2013:

• Sources report that two 7" tablets are under development for release in Q3: A higher-end model with 1280 x 800 screen resolution and a faster processor, priced at $199, and a model similar to the existing Kindle Fire, with 1024 x 600 screen resolution, priced at $149. 
• The existing Kindle Fire's price will be dropped to $149 to make way for the new models. 
• DigiTimes' sources say that development of an 8.9" model has been halted, and release of a 10.1" model has been delayed to Q4 2012 or later. The website doesn't speculate about reasons for the (rumored) changes in Amazon's (rumored) product plans, but one reason might be the popularity of the new iPad's Retina Display. Unless Amazon can release a 10.1" model that has a screen comparable to the new iPad with a price well below the iPad 2, it doesn't make sense to go to market.
• DigtTimes writes that a 6" front-light-equipped black & while Kindle will be released in Q3 "at the earliest."

Kobo’s Vox eReader Gets Full Access To Google Play

TechCrunch reports that Kobo's Vox eReader has gotten full access to Google Play, which makes all 500,000 Android Marketplace apps available to the Vox. Google had previously only given access to its Marketplace to one Android 2.X tablet, the original Samsung Galaxy Tab. It appears (although the article doesn't say) that Kobo has received Android certification for the Vox from Google. Google may have loosened its requirements for Kobo in response to the success of the Kindle Fire, which has helped to create a viable competitive Android app marketplace, and Barnes & Noble's deal with Microsoft, which will almost certainly lead to a Windows RT-based Nook tablet.

Amazon and Apple's dramatically different strategies

Today's announcement of three new black & white Kindle models, plus the Kindle Fire tablet, have shaken up both Amazon's competitors and a number of industry observers. The Kindle 4 models (the Touch, Touch 3G and just plain Kindle) each set new low price points for eReaders with their functionality. The Kindle, at $79, will be a stocking-stuffer for the coming Holiday season. The Kindle Touch Wi-Fi, at $99, provides comparable functionality to Barnes & Noble's Nook for $40 less, and the Kindle Touch 3G adds always-on wireless connectivity. for $149. (All these prices are for Kindles with Special Offers, or in other words, advertising. Add $30 to the Kindle and $40 to the Kindle Touch models if you don't want ads.)

The Kindle Fire tablet, at $199, is cheaper than any brand name Android tablet except Lenovo's forthcoming A1, which comes with front and back cameras and GPS, all of which Amazon leaves off. However, Amazon has built its own user interface on top of Android that's designed to make the Kindle Fire much easier to use than Google's standard Android. Amazon has also built its own browser, called Silk, that uses Amazon's cloud services to pre-render web content for better performance.

Everything about the Kindle Fire demonstrates how radically Amazon's and Apple's strategies differ. Apple uses software to sell hardware; the iTunes Store and App Store are there to increase demand for Apple's hardware. Apple makes money from software and content, but it's a drop in the bucket compared to its hardware revenues. Amazon, on the other hand, uses hardware in order to sell its goods and services. It's likely that the new Kindles, including the Kindle Fire, are all being sold at close to break-even or possibly even at a small loss, in order to generate more sales of other goods and services. Amazon sees the Kindle Fire as potentially being as stimulative for music, movie and television show sales, as well as Amazon Prime subscriptions, as the black & white Kindles have been for eBook sales.

There's not a lot of daylight between Amazon and Apple for competitors to exploit. Amazon is setting price expectations at the low end and is trying to dominate the content market; Apple dominates the developer community, and the iPad will continue to have a much bigger selection of apps than any of its competitors. Can competitors sell more expensive tablets than Amazon with a mediocre selection of content, or less expensive tablets than Apple with a mediocre selection of apps? I doubt it.

This would have been a great opportunity for a radically different tablet, like Microsoft's Courier, that could compete in a completely different market segment, but Microsoft killed the Courier, and there's nothing on the horizon from first-tier competitors that can forge its own path. In hindsight, HP was probably right to kill the TouchPad, and I wouldn't be at all surprised to see other companies rethink their entire approach to the tablet market. Cloning Apple or Amazon won't work; competitors need radically different products.