So, now that the Xoom has flopped, can we finally agree that "tablet" means "iPad"?

Yeah, I don't see how the Android tablet makers are going to make money, Apple won't worry too much as people who want iPads are probably still going to buy iPads.

Amazon's only liability is that their business model limits the Fire's availability & distribution.... at least until they can make their way through the tangled labyrinth of international media rights.

If - or rather when - they do address that, I think they're going to commandeer the Android tablet market much in the way Samsung commandeered the Android smartphone market, if not more so. Between the Fire and W8/RT, Google-sanctioned Android on tablets may well find itself in a tough place.

I do think the new line of Fires put a lot more pricing pressure on Apple than last year. The Fires are more media-centric, but Whispersync for games + parental controls + a new bundled e-mail client make them a bit more competitive with iPads.

It's not the problems of printing that keeps the price high - but the publishers definitely introduce an artificial economy of scale. You really are better off with big orders, but it's almost completely artificial as a means to keep smaller publishers out. Breaking the big 3 is the key to opening up the textbook market.

Which is exactly what handing students a tablet does. Now what do the publishers do? Where' their "hook"? They don't own the copyright to these things for the most part; the authors do.

The authors, in the majority of cases, would have nothing much preventing them from producing an eBook edition at whatever price benefitted them.

Looks like a classic "cut out the middleman" to me. And, not a few professors have always been chafing at the problems involved with getting their courses published, especially at the graduate school level. Not all of them are in it for the textbook money, to say the least.

State governments at the secondary school level are going to see the advantage here, big time, as well.

A lot of smaller states are chafing at the fact that places like Texas and California tend to limit what gets published.

But, with no real economy of scale problem anymore, it wouldn't be all that hard to do an end-run around these problems.

It wouldn't be totally easy or pretty at that level (the school would have to be willing to deal with the check-in and check-out of tablets and dealing with kids throwing them against walls -- though they have to do that with books as well).

The economics of this could get very interesting. Won't happen overnight, but the leverage alone might change the way textbooks work.

I foresee another little cosy empire to disrupt.

The problem is cost. WHo will be buying the tablets? Do they have to buy the textbooks each year for each student? A decent textbook can last for 10 years (or longer) for many subjects. That is a nice amortization. It could end up that if the school has to provide the tablet and the license each year for the book that it might end up costing more in the long run for ebooks.

Eldest wanted a Fire last year. He got a laptop instead. Now this year he's going to get a 16GB Fire HD 8.9 for Christmas. 1920*1200, HDMI out, HD Skype calls to grandma, kid friendly filtering so he can watch Prime streaming without the R rated stuff, no need to settle for the shitty Tegra 3 in the Nexus 7, $300.

Yeah, I don't see how the Android tablet makers are going to make money, Apple won't worry too much as people who want iPads are probably still going to buy iPads.

Amazon's only liability is that their business model limits the Fire's availability & distribution.... at least until they can make their way through the tangled labyrinth of international media rights.

If - or rather when - they do address that, I think they're going to commandeer the Android tablet market much in the way Samsung commandeered the Android smartphone market, if not more so. Between the Fire and W8/RT, Google-sanctioned Android on tablets may well find itself in a tough place.

I do think the new line of Fires put a lot more pricing pressure on Apple than last year. The Fires are more media-centric, but Whispersync for games + parental controls + a new bundled e-mail client make them a bit more competitive with iPads.

Except Samsung could lose it overnight really. nothing really holding them there. Amazon has price as their big thing, and Amazon content.

As for the professors, well, you're right, some do enjoy socking it to their students.

That's really a myth. Authors get relatively little per book. The main reason why instructors push their own textbooks is because they think it's the best out there and because publishing helps with career advancement. On a $100 textbook, the author will earn about $15. With a class of 100 students, that's probably 5% or so of what they'd earn teaching the course considering buybacks and so on. You can make real money as a textbook author, but you make your money when you become the standard text and are selling to all institutions. To one class won't make much difference and certainly doesn't cover the 2-4 years of time you invested writing the book.

The bigger problem is instructors that self-publish through the institution. That's quite common at for-profit institutions and many smaller schools. They'll create the course materials and then demand the students pay $100 for the photocopies after the course begins. They didn't earn enough on the course fees, so they made it all up on the material kickback. It was a big enough problem that Congress passed a law requiring education institutions that receive federal student aid to publish all course costs before student enroll. It remains a problem nevertheless.

Except Samsung could lose it overnight really. nothing really holding them there. Amazon has price as their big thing, and Amazon content.

Agreed. Amazon's lock-in goes much deeper. (Of course, Amazon isn't pulling in the billions that Samsung is. But I think I like their odds in the very long run better.)

Eh.

Apple doesn't make real money on content. Amazon can't either. Amazon is building a storefront for your lap. They want you to buy underwear with this thing, and their profit margin is on the Amazon Prime subscription you need to keep in order to make the device useful. This is the carrier model - they subsidize the hardware and you pay them $80/yr to use it. Once you're paying the $80, you might as well take advantage of the 2 day shipping and whatnot.

It's an odd model, but one that Amazon can pull off to some degree. But it's going to have limited success because it only works in the US and to a limited degree in Canada and the UK. In every other market Amazon has nothing. Even if Amazon can beat Apple and Google in the US, development of the competing products will advance unhindered because overseas sales dominate. Eventually Amazon is going to fall behind. And eventually Amazon has to make money here - they can't keep dividing up their profit margins as they are. And they're starting to lose their sales tax benefits - starting in a week they need to collect CA sales tax. That will immediately make my local stores the same price or cheaper than Amazon for most things.

But it's going to have limited success because it only works in the US and to a limited degree in Canada and the UK. In every other market Amazon has nothing.

What makes you think you can't expand, slowly, internationally? The new Fire is being rolled out in the U.K. offering a very similar ecosystem.

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Even if Amazon can beat Apple and Google in the US, development of the competing products will advance unhindered because overseas sales dominate. Eventually Amazon is going to fall behind. And eventually Amazon has to make money here - they can't keep dividing up their profit margins as they are. And they're starting to lose their sales tax benefits - starting in a week they need to collect CA sales tax. That will immediately make my local stores the same price or cheaper than Amazon for most things.

I strongly doubt Amazon is going to beat Apple. But they have a very good chance of being the biggest Android tablet vendor, by a long shot.

Personally I prefer the smaller device, the ipad is bulky and heavy, why follow that trend? 5 inches is too big for a phone.

Fixed that for ya there.

Comparing a 5" phone to the ipad?

Remember, for the medication to work, you need to take it every day.

Please explain the difference between your objections to the iPad being too large and the objections of the people who said that 5 inches was too large for a phone. It should be enlightening.

Why would I be concerned about those who think 5" is too large for a phone? My next phone will probably be a Note 2. If some people are happy settling for a 3.5" screen that you have to squint at, then good news for Apple?

What makes you think you can't expand, slowly, internationally? The new Fire is being rolled out in the U.K. offering a very similar ecosystem.

Their model requires getting a LOT of pieces in place. It's really damn hard. There's a reason why only Apple has been able to pull it off so far. And if they they want the meatspace sales included, they have to work out shipping on top of everything else. So far, they've only expanded into markets where they were also expanding their meatspace business. That's why I think focusing exclusively on digital when assessing Amazon is a mistake. Clearly their traditional sales model remains their core model. The Fire isn't really an iPad killer - it's a retail bankruptcy machine. It's designed to some day let you snap a photo of something you see in the park, pull it up on Amazon, read the review, click the Buy Now button, and have it the next day. No need to visit the mall. Oh, and it streams movies and stuff too.

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I strongly doubt Amazon is going to beat Apple. But they have a very good chance of being the biggest Android tablet vendor, by a long shot.

Amazon can't win the digital war. Apple can go loss leader there if need be, and Amazon doesn't control the consumer endpoint well enough. They're more integrated than they used to be, but not nearly well enough integrated to pay off. And if they're not careful, they'll piss off their dependent partners like Google did. I'm sure Amazon makes more money through their iOS originated sales than they do through sales on their own device. They can't afford to break that.

Bottom line, you need to make real money someplace. You can use that to subsidize other parts of your business, but you can't use low-margin divisions to subsidize no-margin divisions. That's basically what Amazon is doing. It's why they have a PE of 300. They're growing revenues but not profits, so I have no clue why investors keep rewarding them. There's no possibly way Amazon will ever grow profits to match that PE based on anything they're showing us now.

That's why I think focusing exclusively on digital when assessing Amazon is a mistake. Clearly their traditional sales model remains their core model. The Fire isn't really an iPad killer - it's a retail bankruptcy machine. It's designed to some day let you snap a photo of something you see in the park, pull it up on Amazon, read the review, click the Buy Now button, and have it the next day. No need to visit the mall. Oh, and it streams movies and stuff too.

Hmm, not sure I agree. Amazon's model is wildly different than Apple's, and no way as profitable, but if they can capture a sizable portion of media that people purchase (and keep, in media libraries) with their DRM, I think there's a real opportunity for establishing critical mindshare and lock-in, ensuring revenue and profit (low-margin, but high volume, and all locked-in). Amazon *has* to succeed in digital, because so much of the media they sell will be displaced by digital formats.

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I doubt it too, but it's hard to compete with loss leaders.

Yeah, but Apple has supply-chain mastery and economies of scale that Amazon can't (so far) match, which makes the fight more equal. And Amazon can't compete with Apple in the software dept. The new Fires look like great media-centic tablets, but the iPad is so much more versatile. I can't imagine Fires establishing much of a foothold in education or enterprise.

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Bottom line, you need to make real money someplace. You can use that to subsidize other parts of your business, but you can't use low-margin divisions to subsidize no-margin divisions. That's basically what Amazon is doing. It's why they have a PE of 300. They're growing revenues but not profits, so I have no clue why investors keep rewarding them. There's no possibly way Amazon will ever grow profits to match that PE based on anything they're showing us now.

Amazon's PE is just insane. I wouldn't go near their stock for that reason. It is very strange.

That said, I *think* Bezos' long-term vision is genius (or crazy? ). Capturing a significant chunk of the tablet and digital media market *now* has potential to pay great dividends in the future. The Fires, while at the moment may be no-margin (or perilously close), could become low- or even medium-margin products once Amazon hones their supply chain and can establish themselves as a standard. 'dunno, I could be wrong, but I think Amazon has something good going on, strategically.

The discussion lookmark and johnsonwax are having is what I find so puzzling about the Kindle strategy: the hardware is a loss leader at worst, break even at best. They can't be making a significant amount off digital content either as the lion's share of the money paid goes to content owners. So what is the goal of these devices?

I don't begrudge Amazon's process, especially since it benefits the consumer with good value and low cost products. But from a business point of view I find them intensely fascinating.

What makes you think you can't expand, slowly, internationally? The new Fire is being rolled out in the U.K. offering a very similar ecosystem.

Their model requires getting a LOT of pieces in place. It's really damn hard. There's a reason why only Apple has been able to pull it off so far. And if they they want the meatspace sales included, they have to work out shipping on top of everything else. So far, they've only expanded into markets where they were also expanding their meatspace business. That's why I think focusing exclusively on digital when assessing Amazon is a mistake. Clearly their traditional sales model remains their core model. The Fire isn't really an iPad killer - it's a retail bankruptcy machine. It's designed to some day let you snap a photo of something you see in the park, pull it up on Amazon, read the review, click the Buy Now button, and have it the next day. No need to visit the mall. Oh, and it streams movies and stuff too.

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I strongly doubt Amazon is going to beat Apple. But they have a very good chance of being the biggest Android tablet vendor, by a long shot.

Amazon can't win the digital war. Apple can go loss leader there if need be, and Amazon doesn't control the consumer endpoint well enough. They're more integrated than they used to be, but not nearly well enough integrated to pay off. And if they're not careful, they'll piss off their dependent partners like Google did. I'm sure Amazon makes more money through their iOS originated sales than they do through sales on their own device. They can't afford to break that.

Bottom line, you need to make real money someplace. You can use that to subsidize other parts of your business, but you can't use low-margin divisions to subsidize no-margin divisions. That's basically what Amazon is doing. It's why they have a PE of 300. They're growing revenues but not profits, so I have no clue why investors keep rewarding them. There's no possibly way Amazon will ever grow profits to match that PE based on anything they're showing us now.

New Fires (with the exception of the 8.9" model) are apparently available in the U.K, France, Germany, Spain and Italy:

The discussion lookmark and johnsonwax are having is what I find so puzzling about the KindleAmazon strategy: the hardware is a loss leader at worst, break even at best. They can't be making a significant amount off digital content either as the lion's share of the money paid goes to content owners. So what is the goal of these devices?

I don't begrudge Amazon's process, especially since it benefits the consumer with good value and low cost products. But from a business point of view I find them intensely fascinating.

I think Bezos wants cool stuff; unlike Jobs, however, he doesn't actually care about the profit.

How he managed to sneak that buy stockholders I have no clue. It's a Ponzi scheme at that point where new customers generate the profit to pay for the investment to attract them, thereby creating new network effects to attract more future customers et al.

So long as the Internet grows, mail order distribution grows, and digital content grows, they are fine.

As soon as the market is mature and there are two retail giants, then the game is played by profit since it will be at that point a zero-sum game.

That's interesting - and a new development from Amazon. I wonder what services will be available in those countries?

App stores. Amazon own Lovefilm in the UK. Kindle books. MP3s. So some of the content.

Got to say as pleased as I am to see any Fire in the UK, I am itching to get a tablet, but I don't want one of the 7" models now. The 8.9" model is almost perfect. If anyone from Google is reading, please copy it and make it a Nexus.

I don't really think so. Not from what I see now. I can get the Amazon app for free on my Nexus tablet. And, I wonder if 50 dollars (the difference between the new Fire and the Nexus) is going to be that compelling if the only thing Amazon is really selling is a storefront. It needs to be more.

What does Amazon bring to the table as far as apps go? As far as services go? Will there be things like Google Earth? Will it get everything or even most things? How good will they be?

If I want Amazon right now, on my Nexus tablet, I simply install the app and I have the store front. And, I have everything else out there without fuss.

The only way Amazon really wins this game is that it gets a large stable of apps and services. In short, it has to move beyond the store front. Well past the store front. Will it really do so?

I wonder if this is some of the reason behind the fact that the original Fire, by all accounts, ran out of gas. Maybe it is a seasonal thing, like other books you buy at Christmas.

Or, maybe at around 200 bucks, a lot of people end up with both. My wife likes her Nook, but I ended up with a conventional Google tablet. At 200 bucks, I couldn't resist. But, the Fire, I could. Probably because it looked like just a bookstore to me. My wife already has that.

Heck I have access to her bookstore on my tablet, since she's willing to share her B&N account on it.

It's just not clear that I'm missing anything by not having the Nook or the Fire. I am reasonably assured at getting the whole tablet experience, whatever the heck that turns out to be.

Maybe I won't turn out to be typical, but this doesn't strike me as a very geeky line of thought. The question will probably boil down to how serious Amazon gets about being more than a storefront.

The discussion lookmark and johnsonwax are having is what I find so puzzling about the Kindle strategy: the hardware is a loss leader at worst, break even at best. They can't be making a significant amount off digital content either as the lion's share of the money paid goes to content owners. So what is the goal of these devices?

I don't begrudge Amazon's process, especially since it benefits the consumer with good value and low cost products. But from a business point of view I find them intensely fascinating.

Because not everyone cares about gouging their customers. For some a few percentage points of margin are enough.

Aha: here is one catch. With the new Fires, no way to opt of Amazon's Special Offers on the lock screen. Kinda cheesy.

That's rather unfortunate. I don't live in the US, so the Fires are of limited interest to me aside from on a technical level. I do, however, have a huge mancrush on the e-ink Kindles and dislike ads enough to spring for the models without ads. I can only hope that removing the option to purchase an ad-free device doesn't spread to the e-ink models.

Aha: here is one catch. With the new Fires, no way to opt of Amazon's Special Offers on the lock screen. Kinda cheesy.

That's rather unfortunate. I don't live in the US, so the Fires are of limited interest to me aside from on a technical level. I do, however, have a huge mancrush on the e-ink Kindles and dislike ads enough to spring for the models without ads. I can only hope that removing the option to purchase an ad-free device doesn't spread to the e-ink models.

Their inclusion in the Kindle tablet devices suggests them using the revenue stream to make money over the long term. Clever idea really. They really are approaching these devices with more of a long term revenue model, womewhat similar to game consoles.

Aha: here is one catch. With the new Fires, no way to opt of Amazon's Special Offers on the lock screen. Kinda cheesy.

That's rather unfortunate. I don't live in the US, so the Fires are of limited interest to me aside from on a technical level. I do, however, have a huge mancrush on the e-ink Kindles and dislike ads enough to spring for the models without ads. I can only hope that removing the option to purchase an ad-free device doesn't spread to the e-ink models.

Their inclusion in the Kindle tablet devices suggests them using the revenue stream to make money over the long term. Clever idea really. They really are approaching these devices with more of a long term revenue model, womewhat similar to game consoles.

So ads ship enabled by default until you pay a fee to have them removed, that's interesting. Odd that they didn't just do it like the e-ink Kindles and make a SKU with no ads. Guess they're hoping many people won't opt out.

The question is, will consumers sell their soul to ad campaigns for 20 to 50 bucks a device?

I kind of hope this fails, because if it doesn't, then we're going to see ads on everything -- quite probably including iOS. Sooner or later, the lure of money will win. If you think Apple won't do that, well, there's this: http://arstechnica.com/staff/2012/08/op ... t-machine/

I kind of hope this fails, because if it doesn't, then we're going to see ads on everything -- quite probably including iOS. Sooner or later, the lure of money will win. If you think Apple won't do that, well, there's this: http://arstechnica.com/staff/2012/08/op ... t-machine/

Well, so far that's one new guy at Apple, so let's not blow it up into a trend until we get at least a 2nd data point even within the retail arm. I agree it's troubling, but it's waaaay too early to panic.

That said, Apple's not going to put ads on iOS. They'll do ads as a way to monetize content - tv shows, music, etc. but not the devices themselves. Everything in Apple's last 15 years indicates they would profoundly oppose that. They didn't even ad ads to the iTMS back when they desperately needed the money. Yeah, I know Steve is gone, but Cook is as much at the heart of Apple's reinvention as Steve was.