When the Kindle Fire first came out, I was optimistic about the product. After all, we own a 2nd generation Kindle in our household, and we are very satisfied with the product. I am completely convinced that this is the direction publishing is going, and as I posted previously, there is a big upside that is still untapped in Kindle-based marketing.
The Kindle Fire is Amazon’s foray into the formal world of the tablet PC. While the Kindle did have some beta features that allowed web browsing and other interaction, it just wasn’t a great platform to do much other than read books. The Kindle Fire, on the other hand, had tablet PC abilities, including the ability to run apps, browse the web, and play multimedia properties, just like the iPad. While it isn’t nearly on the level of the iPad by a long shot, the price was right ($200 right now), and it was a big upsell from a Kindle in terms of what it could do. If my child was older and reading books, I would definitely consider it because of the color screen, and probably would end up investing a lot more in our Amazon library in terms of Children’s books. I suspect this is what my future holds in store 
Anyways, I was a bit disappointed to read some fairly mediocre and negative reviews when the Fire came out. Maybe this was inevitable, as the iPad is a hard act to follow, and the juxtaposition of the two certainly wouldn’t look great for the Fire, which is something like 1/3 of the cost of the iPad. However, today I read an article in MediaPost that the Kindle Fire has already passed sales expectations, with 64.7 million shipments predicted vs. the original 60 million ramp-up Amazon had set expectations with. Additionally, the Kindle Fire has about 13.8% of the tablet market share, well short of the iPad’s 65.6% market share, but still impressive, considering it is a brand new product and does not have Apple fan fanaticism driving sales, and more limited capabilities.
I like this for several reasons. First, it keeps Apple on their toes, and puts pressure on them to lower prices on their units as Amazon grabs more of the available, non-fanboy market share. This is a win for consumers, as either way, we end up with savings and products optimized for performance vs. a near monopoly in the case of Apple. Additionally, now marketers have two different tablets to think about, and both platforms have unique incremental advertising inventory that can be leveraged. If Amazon continues to offer Screensaver-discount incentives to consumers to buy models that they sell at a slight loss (meaning, your screensavers have ads, and then you pay less up front), this is great inventory that advertisers can tap into, essentially full-page interstitials that are not as invasive.
Meanwhile, if both platforms can do web browsing, this means more eyes on publisher sites, and more opportunities to get users through online ad banners and custom site integration. Publishers are already seeing tablets grab an increasing share of pageviews this year, and what is great about tablet PCs is that they use normal web inventory, not wireless web. The ad units they view are not the tiny 320x50s that wireless web and mobile apps use, but instead the large IAB-standard ones like the 300x250s, 336x280s, 160x600s, and 728x90s. Tablets are proving to be a new audience of PC user, and are more convenient in some ways than desktops and laptops. This is a rising tide that floats all boats in our industry.
Until next time — Glenn Highcove
