Amazon has no hope of competing with Apple to be the best general computing tablet platform, so trying to match the iPad feature for feature will drive up their cost and still leave them with an inferior product. The two other stable competitive positions are either to go cheap or to go niche.
In his 1980 classic Competitive Strategy: Techniques for Analysing Industries and Competitors, Porter simplifies the scheme by reducing it down to the three best strategies. They are cost leadership, differentiation, and market segmentation (or focus). Market segmentation is narrow in scope while both cost leadership and differentiation are relatively broad in market scope.
This will be hard for Amazon because, before the iPad, they were clearly the differentiated premium market-leader, but now that market has been subsumed. The only hope for Kindle is to become the cost-leader and to let third-party developers turn the Kindle into cheap niche devices.
Once the KDK is available, we’ll see the top end come down to about $400. Amazon can do this because they’re set to make money from their free 3G, in the form of subscription applications. I’m sure a significant component of the $489 price is to offset the expected 3G use that isn’t offset by book sales.
This strategy is more in line with Amazon’s online retail strategy. They currently compete on price and let third-party stores focus on niche markets. Even though Porter cautions against trying to have two strategies, it can be overcome if different business units focus on each strategy independently — what could be more independent than a third-party.
The speculation on the KDK is that it’s going to be Java based, and I hope that’s right. We know for sure that it runs Linux, and that there’s a JVM and obfuscated jars on the device. According to what I’ve read, there’s no perl or python or anything like that on it, so the only options will be C/C++ or Java. For the sake of the ecosystem, Amazon will need to pick Java and probably will run third-party code in a some kind of sandboxed environment.
To me the best thing about it being Java based is that I will finally have a JVM that I care about targeting. One of my big problems with Java is that there’s no place the JVM runs where something else doesn’t run better or that I just like more. For web apps, I prefer python based frameworks, and for Windows apps, you have to use .NET or Win32 with C/C++. On a Mac, Objective C is the obvious choice. Java is a good choice on a lot of mobile devices, but I haven’t cared about them, until now.
And the main reason I want a JVM to target is because it gives me a practical reason to use clojure. I know it might not work out, and of course, I’ll be writing Java at first to learn the API, but I’m hoping I can transition to clojure eventually, or at least use a hybrid.
In 2008, Rich Hickey came to speak in Northampton, and I prepared by learning and blogging about clojure for the 20 days preceding it. Since then, I’ve been on a lookout for a JVM that I wanted to target. The closest I’ve come is the Google AppEngine, but I still liked python and Django style better. It may turn out that the KDK just works better with Java, but clojure has shown that it’s pretty good at driving OO frameworks like Swing, so I think it will work just fine.
Amazon, clearly feeling the heat from the Apple device coming out in two days, is making some moves with Kindle. In the space of a few weeks, they have altered the publisher/Amazon split, announced an SDK, and are offering a money-back guarantee for frequent book buyers [links via daringfireball.net].
Amazon has a real chance to win the hearts of developers because of few key differences between their offering and Apple’s.
- Because of the free 3G, Amazon needs to have a class of apps that are subscription based. This may seem like a downside, but if you can keep the monthly cost low, this gives an Amazon app something that has been missing from the Apple AppStore: Recurring Revenue
- Amazon is a clear leader and innovator in e-commerce — specifically cross-selling. I think it’s very likely that Amazon will be able to surface apps all over their store. Make an app that helps people choose a digital camera, and it may be promoted on every camera page.
- The Kindle will be one-third to one-half the price of the Apple device, which makes it very attractive to do a large rollout to a mobile workforce. Insurance adjusters, delivery truck drivers, on-site construction, etc. need to read documents — they don’t need an iPod, fart apps, or games.
- The Kindle will probably always be smaller, lighter, and use less power — Apple could surprise me here, but the Kindle is so low-powered, it’s unlikely that they can’t keep up.
- Hardware keyboard — Apple could clearly innovate here — I’m guessing with an external bluetooth keyboard. If so, that adds bulk, weight and sucks battery.
- The e-ink display — no color is a downside, but the e-ink can be read outside — again, think outdoor, mobile workforce.
- Amazon’s Kindle DRM and book deleting are cause for concern, but if they have any sense, they will learn from Apple’s experience with AppStore rejections and loosen up. It doesn’t appear that they will from my first looks at the KDK.
Subscription apps + good enough for business will be a big win for developers. Business apps don’t go for $0.99 — the equivalent might turn out to be $5/month for something simple, and businesses won’t blink. Better than the up-front price is that you get a predictable income stream that isn’t subject to the whim of the top 25 lists.
This isn’t to say that Kindle will beat Apple in any quantifiable way (number of apps, number of downloads, number of customers, etc), but I think that the kinds of stories of real businesses being built on the Kindle store will be quite different from the lottery that the iPhone app market appears to be.
Last week, Amazon announced that they will be releasing an SDK for creating Kindle Apps. I know that three days before the big Apple Tablet/Slate/Canvas announcement, I’m supposed to be getting ready to tabletize my app, but the idea of developing for the Kindle is looking kind of interesting.
Given that the beta isn’t out yet — there isn’t a lot of information about the KDK yet. However, there have been some successful hacks of the Kindle and Amazon was forced by the GPL to publish their modifications, so we do know some things:
- The Kindle runs Linux
- Kindle GUI’s are written in Java
- There will be three models of apps, free, one-time purchase, and subscription. The first two will have a monthly bandwidth cap of 100KB/user.
- Advertising is listed as something you can’t do — perhaps they mean an app that only advertises, but even so, why not? Mobile advertising is large part of the app ecosystem, so I assume in-app advertising will be allowed.
- A generic reader is not allowed — again, does this mean a PDF reader wouldn’t be allowed? I can see Amazon not wanting the 3G being used to buy from other stores, but why not let me read content I get from other means (or from subscription apps).
The brevity of the developer guidelines is welcome, but I hope they elaborate on them in the near future.