17 ms·

Amazon's Play

226 points by defap 14y ago

trimbo 14y ago
> Tech writers have a natural aversion to lock-in, high prices, and dominant market leaders. You mean the same tech writers who have been breathlessly talking about tomorrow's iPhone 5 announcement for months? A device that fits this description exactly?
notatoad 14y ago
>It’s a heads we win, tails you lose strategy. That’s the brilliance... Amazon wins so long as you consume media content from Amazon, no matter if you play it on a Kindle Fire or an iPad. Apple only wins if you buy an iPad. It's amusing that Gruber can see the brilliance when amazon does it, but not when Google does it. This is exactly google's strategy with android, except that it doesn't involve users buying content. Google makes money when you use the internet. They win whether you use an iPad or a Nexus or a Kindle, Apple only wins if you buy an iPad.
- dantiberian 14y ago
  The key quote from Asymco's analysis of Android's revenue: >It might be hard to see the Android section of the chart so I expanded it below at 400% the original: http://www.asymco.com/2012/05/15/android-revenues-in-perspective/ http://www.asymco.com/2012/05/15/android-revenues-in-perspec...
  - majormajor 14y ago
    Isn't that a comparison of hardware revenues vs Google Android ad revenues? And isn't that exactly Google's play—keep the market from being dominated by a single hardware company that could cut them out from those revenues? ('Course, Amazon has forked it to do basically the same thing, in some regards, so while it might work as an anti-Apple-hegemony move, the openness may have been too much, even from a business persepective.) "Android" revenue as a whole to be compared against Apple's hardware revenues would need to include Samsung, HTC, etc. And then I'm sure Apple's margins would still be higher due to their excellent supply chain, but it's not like they aren't spending any money making all that hardware.
    - 2muchcoffeeman 14y ago
      Remember when Apple was making 75% with only 8% market share? http://www.asymco.com/2012/02/03/first-apples-rank-in-mobile-phone-profitability-and-revenues/ http://www.asymco.com/2012/02/03/first-apples-rank-in-mobile... Linking to asymco is getting cliche ...
      - cooldeal 14y ago
        Remember how Microsoft makes >75% of the money and "wins" in the web server market with IIS? Or the majority of profits in the server OS market with Windows Server? Didn't think so, because there's no blog roll pushing that on the blogosphere and then given traction on HN. Asymco does pretty partisan analysis which has previously been debunked earlier. http://news.ycombinator.com/item?id=2471026 http://news.ycombinator.com/item?id=2471026 Wasn't he and Gruber making a lot of predictions and analysis that Android would never overtake the iPhone in sales? When that did happen,iPhone on Verizon was surely going to kill Android's ascendancy. When that failed to stop Android, they moved to the next metric that favors Apple, profit share. It's like, before he writes some articles, he thinks.. okay here are some new numbers, how do I make Apple look good and Android/others look bad with these numbers? The only problem is that some people on HN give the Apple fan blogs too much traction on HN. Hell, Paul Thurrott's http://winsupersite.com http://winsupersite.com is even hellbanned on HN from being submitted for the crime of being a Microsoft watcher site for which the punishment here is flagging to death.
- guelo 14y ago
  Apple hasn't turned on Amazon yet. As soon as they do Gruber will be the first to tell us how awful Amazon's strategy is.
  - timfrietas 14y ago
    I think they've taken shots across the bow. Charging 30% for IAP right as they released iBooks was pretty squarely aimed at Amazon.
  - mcav 14y ago
    Apple stopped the Kindle app from linking to the amazon bookstore. That's as close to war as you can get.
    - jcrites 14y ago
      Not really. No apps are allowed to link to places where purchases can be made for that app. The purchases need to happen within the app itself, at which point Apple gets a cut. If the app decides not to allow in-app purchases and cut Apple in, it may not link to other places where purchases can be made.
      - deleted 14y ago
        [deleted]
      - bergie 14y ago
        This may be, in the end, the worst mistake that Apple is doing with their platform. What shape would for instance web shops, or the SaaS market, be in, if the only way to run one was to give 30% of your revenue to Netscape. Netscape could still be alive this way, but web would be way smaller.
        batista 14y ago
        >Netscape could still be alive this way, but web would be way smaller. Now, think your argument again.
        14y ago
- insaneirish 14y ago
  I, and millions of others, don't think Google when I think content. I, do, however, think Amazon. This is the difference between Google and Amazon.
- Tloewald 14y ago
  Amazon is, like Apple, a "sell people stuff at a price they're willing to pay" company, versus a "free but we will auction slivers of your soul" company. Apple makes most of its money up front, Amazon makes most of its money... um no one is quite sure how or if Amazon makes money. Google "gives" away goods and services and makes money selling ads ... like an old fashioned TV network. Not exactly the same thing at all. Oh, and how much net profit has Android yielded Google?
  - StavrosK 14y ago
    > Oh, and how much net profit has Android yielded Google? Probably a whole lot. When my sister, who would otherwise be in front of a computer at most half an hour a day, can get an android smartphone for 150 euros and idly browse the Web all day, Google makes a shitload of money they wouldn't have if all these people were on cheap nokias.
    - eli 14y ago
      Don't iPhone users make just as many (probably more) Google searches as Android users? Or do you think that without Android, nobody would have put out cheap smartphones by now?
      - ekianjo 14y ago
        Probably more? As far as I know, there are more Android devices in the market than iPhones.
        jccc 14y ago
        Android users are not using their devices the same as iOS users: http://techcrunch.com/2012/04/21/real-time-research-ios-dominates-over-android-when-it-comes-to-usage-says-chitika/ http://techcrunch.com/2012/04/21/real-time-research-ios-domi...
        eli 14y ago
        No doubt, yet iPhone still generates more mobile web traffic than Android.
- ThomPete 14y ago
  Googles strategy with android is to serve ads but they do not have a model to get that to work. Until they do that Android is not a win.
  - notatoad 14y ago
    Google doesn't have a strategy to serve ads on android? sure they do, it's called a web browser. Google has the largest ad network on the internet, and just about every time you view a webpage google gets a cut of it. It doesn't matter whether you use an android device or an iOS device or a windows computer or a potato, google makes money. if google can encourage people to use the internet more by selling smartphones, they win. The point of android is not to cannibalize iOS market share, it's to eliminate the dumbphone. They don't want anybody to ever be without internet.
    - ThomPete 14y ago
      That's not a strategy for mobile. If what you said where true more of their revenue would come from mobile. It doesn't, look it up.
  - trimbo 14y ago
    Android is winning for Google in a massive way once you understand their goal. Google's Android and even Chrome strategies are that _no one_ should win at the OS/platform level. They never want another Windows, or Mac, or IE, or anything that prevents them from leveraging the open web because it's fronted with proprietary code that can block them. The best way to win at that game is to either force the market to adopt the system they can manage ("with Google" approved Android phones and the market) or make the web the only worthwhile source of truth among a hodge-podge of OSes that try to bolt on proprietary components. Even the major commercial forks of Android have not yet proved to derail this from succeeding.
    - rimantas 14y ago
      > that try to bolt on proprietary components I will always prefer something that has no ads bolted on.
- hboon 14y ago
  Amazon makes money from selling digital and physical media content as well as physical goods. Google makes money primarily from search-based advertising — YouTube which is digital content is around the order of 1B revenue whereas total revenue is in the range of 30B. Amazon makes money whenever you buy their content. Google not so much. When you have a strong platform player that have decisive power over how they locate information — in the case of Apple, (1) control over the default search engine in Mobile Safari, (2) control over what web browsers are approved for their App store (3) has their own maps app backed by their own services and partners, which doesn't include Google (4) demonstrated capability and intent to build alternate ways to access information such as Siri (5) demonstrated animosity — I'd say Google doesn't feel like they win if you buy an iPad. So correction, it should be "Google makes money when you use their services".
  - Johngibb 14y ago
    The difference is with Amazon you're the customer, and the device and content are the products. With android, _you_ are the product and the advertisers are the customers. This distinction means that Apple/Amazon's interests are more aligned with consumers than Google's.
    - option_greek 14y ago
      "This distinction means that Apple/Amazon's interests are more aligned with consumers than Google's." Not necessarily. It simply means they have more incentive tying you down to their 'product' and stifle any competition. Google on the other hand couldn't care less about what device you use as long as you use their services.
      - chii 14y ago
        so instead of tying you down to the device, they tie you down to their services. In my eyes, thats not too different. At least with a physical device, you may be able to subvert any ill intentions.
        14y ago
- blinkingled 14y ago
  Talking about amusements - another one is that Android activations are still "activations" for Gruber, long after Jobs and co doubted if Google is truthful with their number. Gruber definitely gets his % numbers wrong though - half percent instead of 5% :)
- schraeds 14y ago
  Google makes more money off iOS users/devices than Android devices, in addition to all the cap ex goog has dropped on the effort.
- batista 14y ago
  >This is exactly google's strategy with android, except that it doesn't involve users buying content. Google makes money when you use the internet. They win whether you use an iPad or a Nexus or a Kindle, Apple only wins if you buy an iPad. Well, it's not the same at all. For one, Google wins a minuscule amount of money if you use the internet. Amazon probably makes more off selling 1 (ONE) Kindle book than Google makes from you using their search engine all year around on their tablet. Second, noone buys those other tablets (apart from iPad/Kindle). The numbers are 1/10 the iPad numbers and less. Third, Google doesn't even win when people use Kindle Fire, despite it being Android. IIRC, Amazon switched the search engine to Bing. >Google makes money when you use the internet. They win whether you use an iPad or a Nexus or a Kindle, Apple only wins if you buy an iPad. And how does that work for Google vs Apple revenue/profits so far?
  - grogglesbegone 14y ago
    The iPad to alternate tablet market is more like 6:4, at worst 7:3, pre-Nexus 7. 1/10th or less is utter nonsense. Google is a $220 billion dollar company with great earnings based upon people "using the internet". Your comment on Google not winning with the Fire makes the assumption that Google only wins if you use their search engine. Not really.
thurn 14y ago
> Amazon is, to my eyes, the only company playing in the same league as Apple I think it's a bit premature to write off all other Android tablets entirely. In 2009, Android phones also seemed like they weren't in the same league, and none of us could imagine living in a world where Android outsold iOS devices 2-to-1, but it happened.
- dave1619 14y ago
  Definitely agree. Android tablets are vastly improved with 4.1 and project butter. Kindle Fire 2 is still choppy and sluggish from the preview videos I've watched. It's too early to dismiss Android tablets.
- danso 14y ago
  But the league isn't just hardware, it's services, content and distribution
  - drivebyacct2 14y ago
    Which Google and Google Play offer plenty of?
    - MatthewPhillips 14y ago
      Amazon wins in media content, even over Apple. They have iTunes and Netflix in one.
  - w1ntermute 14y ago
    Like drivebyacct2 said, you can get content from Google Play. But the really funny thing is, you can get all of that from Amazon on any Android tablet. I don't understand how people don't realize that all the Amazon apps on the Kindle can be installed on any other Android tablet. This is exactly what I did with the Nexus 7 - you can get the Amazon App Store, Kindle app, etc.
    - MatthewPhillips 14y ago
nostromo 14y ago
> I think Bezos’s best line at the event was this one: “We want to make money when people use our devices, not when they buy our devices.” I had the opposite reaction. Hearing this line, hearing about the ads on the lock screen, and seeing this slide (http://www.blogcdn.com/www.engadget.com/media/2012/09/amazonevent0184.jpg http://www.blogcdn.com/www.engadget.com/media/2012/09/amazon...), I immediately knew I wouldn't be switching from an iPad to a Kindle.
- dangoor 14y ago
  Everyone's different, but I have a "Kindle with special offers" from last year, and the sleep screen's ads are actually a feature. They're unobtrusive, informative and have actually saved me money. If the Kindle Fire implementation is similar, I wouldn't hesitate on that count. (There may very well be other reasons not to get one... We'll see when they come out!)
  - cpeterso 14y ago
    What kind of ads or "special offers" does the Kindle display? Are they personalized for your Amazon account? How often are they displayed?
    - guga31bb 14y ago
      They are displayed in two cases: 1) When you turn your Kindle off, there will be a full-screen ad. 2) When browsing books at the main menu, a small horizontal bar across the bottom of the screen will display an ad. You only come to this screen by choice, though -- if you were in the middle of a book when turning off your Kindle, when you turn it back on it will go straight to where you were in the book without showing this menu. Since they never interfere with reading, they are extremely non-intrusive. I think they are personalized but not positive.
      - kpozin 14y ago
        Considering that Amazon knows about most of my online purchases from the past 10 years, the kinds of ads they show indicate that they are not at all targeted. Almost disappointingly so.
cageface 14y ago
The only thing I use my iPad for any more is the browser and the Kindle app so Amazon's pitch makes a lot of sense to me. But if anything I'm thinking of downgrading to an e-ink reader. I spend way too much time looking at backlit screens in a typical day already.
recoiledsnake 14y ago
That's an interesting improvement given Gruber's snarky dismissal of Amazon because of the quarter's earning numbers recently: http://daringfireball.net/linked/2012/07/27/amzn http://daringfireball.net/linked/2012/07/27/amzn http://daringfireball.net/linked/2012/07/27/amzn-profit-correction http://daringfireball.net/linked/2012/07/27/amzn-profit-corr... The whole Apple is superior to Company X because Company X makes far less profit might be what his target audience revel in, but is non-sequitur and gets old fast. How would he have reacted a similar comparison with, say Microsoft when Apple was not doing so well?
- Tloewald 14y ago
  This is hilarious. Do you know what it was like to be an Apple user from, say, 1987 to 2002?
Kylekramer 14y ago
Like Gruber, I really like the "we want to make money when people use our devices, not when they buy our devices" line. I often heard people deriding Kindles as merely vending machines for Amazon and I found myself slightly put off by that. But with that one line, Bezos really flipped a switch in my head to the point where the Amazon method seems much more fair to me as a customer than the one time hardware purchase model.
ippisl 14y ago
I'm not sure: "we want to make money when people use our devices, not when they buy our devices" is true. Amazon does makes a decent margin above the marginal cost of the $299 kindle fire HD and on the kindle fire HD LTE: http://www.eetimes.com/electronics-blogs/other/4395833/BOM-bom-bom-the-Kindle-Fire-refresh--?pageNumber=1 http://www.eetimes.com/electronics-blogs/other/4395833/BOM-b... It's hard to tell if they profit even after including fixed costs, but they might. But pricing it's low end model slightly above it's BOM is a signal to competitors: "we don't care to profit from sales, if you'll compete, you'll lose".
- agscala 14y ago
  I really like the last point you made there. I wonder what Google has planned to fight for the top? Google's Nexus line is their first step into the battle. They're obviously trying to get involved in the media game but they know they're late compared to Amazon and Apple. Surely they will be stepping up their game for the next release. Google can compete on price though, since they make money from the services they offer, just like Amazon.
pyang 14y ago
I think what separates Apple and Amazon from the rest of the pack is their simple but relentless pursuit of their values, and the extent to which they appeal to us customers. It's easy to understand their respective philosophies - Apple in terms of product design and quality, and Amazon in terms of prices and shopping experience. Both are now crossing into each others' territory - Apple with the future iPad mini and Tim Cook's operations knowhow, and Amazon with designing higher quality products. But both approaches are easily understandable by customers and appeal to their own values - innovatively, doggedly competing either on quality or price or both. On the other hand, I don't think it's hard to see that most other manufacturers' philosophies go along the lines of "Let's make everything we can think of and see what sticks." Microsoft, for one, is only starting to turn around from its philosophy of "We want to be everywhere in your life" to focus on customer experience. These approaches are business-centric, and don't present anything that the consumer can trust or grab onto, especially when you think about the various music stores and other half-hearted approaches at retaining consumers who buy their products. Intrinsically, I think customers understand the lack of focus - that these manufacturers are fundamentally focused on gaining a share of the pie rather than making customers really happy with what they just bought. With Apple, it's "Look at all these neat things I can do with all these apps"; with Amazon, it's "Look at all the stuff I can buy and read/listen to/watch." Other companies are only recently coming on board, and as long as they're not focused on giving the customer something to do with their products, they're going to miss out.
ariwilson 14y ago
70k/1.3m = 5%, not 0.5% as claimed by Gruber (re: Android tablets activated as a percentage of total Android devices activated).
chj 14y ago
Can't help thinking, is this a quest for a new god? I am a huge fan of AWS, love the Amazon's "pay what you use" philosophy. However, I bought a Kindle Fire before, and since decided not to buy any more in the future. Not matter at what price. Sometimes you shouldn't be doing what you are not good at.
jiggy2011 14y ago
He says nobody is buying other Android tablets, but what about the Nexus 7? I thought they were being sold faster than they could be manufactured. The Nexus 7 is pretty cheap too, is there any good reason to buy a kindle over one?
- blinkingled 14y ago
  Yeah 8 million Nexus 7s sold is what I heard somewhere. Only reason to buy Kindle Fire over it is if you want the option of a bigger screen and you watch lot of Amazon instant video.
  - recoiledsnake 14y ago
    >Yeah 8 million Nexus 7s sold is what I heard somewhere Not really. Some analyst expects 8 million shipments Nexus 7 by the end of 2012. The guesstimate was based on LCD screen shipments.
    - blinkingled 14y ago
      Schmidt claimed 70K tablets activated everyday. That's 2.1M per month. Given they dont count the Kindles and no one else is buying other Android tablets the Nexus 7 has got to be selling 8M very shortly.
- grecy 14y ago
  > what about the Nexus 7? I thought they were being sold faster than they could be manufactured. The implied statement is compared to iPad, nobody is buying Android tablets. They might be selling faster than they can be manufactured, but it's still a tiny fraction of iPad sales. All of Google's revenue is a tiny fraction of iPad revenue.
  - ariwilson 14y ago
    The last part of your statement isn't true. Q3 2012, Apple iPad revenue: $9.171B on 17M units Q2 2012 (different calendar system), Google revenue: $12.2B.
hcarvalhoalves 14y ago
I like Amazon and the idea behind the original Kindle (the e-ink one), but it bothers me: - They are all over with their tablets trying to compete with iPad or Samsung ones, it doesn't seem to have the same focus of the original: simply a good device to consume digital content. They will lose if they try to compete like that, trying to release full-featured tablets at low margins. - Their event is way too much like Apple's WWDC. I mean, even the slides look like they are done on Keynote. It doesn't give a good impression.
- ebf 14y ago
  - They are all over with their tablets trying to compete with iPad or Samsung ones, it doesn't seem to have the same focus of the original: simply a good device to consume digital content. They will lose if they try to compete like that, trying to release full-featured tablets at low margins. Why would they lose? The Kindle Fire seems like a great device to consume content: movies, music, books, and also many popular Android apps. - Their event is way too much like Apple's WWDC. I mean, even the slides look like they are done on Keynote. It doesn't give a good impression. Doesn't give a good impression to whom? Do you think the average Amazon costumer cares? I don't.
- jonknee 14y ago
  > Their event is way too much like Apple's WWDC. I mean, even the slides look like they are done on Keynote. It doesn't give a good impression. It was nothing like WWDC--there was no developer conference. It was a single presentation. That they possibly used a major presentation application to run a presentation is not very surprising. They probably had coffee in the back of the room too.
- mikeash 14y ago
  Why wouldn't the slides be done on Keynote? Keynote is an excellent presentation app, and it's not like Amazon makes their own presentation software that they ought to be using instead. I can't understand that comment at all.
dasht 14y ago
Amazon's main strategy is to broker transactions between its users and the vendors that supply those users. Amazon is aiming to be everyone's primary retail store for everything. Facebook's strategy is to own everyone's on-line "sharing". Google's strategy is to own everyone's "search" (broadly defined). Amazon wants to own everyone's retail experiences. Amazon would love it if slick devices were cheap enough to just give away -- they'd know instantly how to make huge money off that. Google and Facebook? Not so much.
lazerwalker 14y ago
I'm interested to see what happens with Apple's upcoming releases. A large (albeit not the only) component of Bezos' message is that the Kindle Fire provides an iPad-quality experience at a lower upfront price because Amazon intends to get most of its long-term customer value through media sales; that idea could suddenly become a lot more interesting if a hypothetical iPad Mini / Air is released at the same price point as the Fire. Amazon would still be very well-positioned (as Gruber puts it, "heads we win, tails you lose"), but it would certainly make the hardware sales race more interesting.
parka 14y ago
The latest offering of Kindle Fire might actually give the iPad a serious competition. I'm currently an iPad user. If I don't have the iPad now, I would be torn between buying the two. The Kindle Fire is cheaper. Amazon's customer service is great. But the most compelling reason is they have Amazon Prime. Being able to access all the Amazon Prime free movies and TV shows is a huge draw, at least to me. There will be those who will buy it to install their own Android versions also. Small group though. If I were to recommend either tablets to friends, I'm not sure which one I will recommend. Prior to this release of Kindle Fires, I would have recommended the iPad without much thought.
credo 14y ago
Gruber says "(Eric Schmidt even admitted last week, at Motorola’s Droid event in New York, that only one half of one percent of Android “activations” are for tablets" The source (http://9to5google.com/2012/09/05/eric-schmidt-1-3-million-android-activations-70000-tablets-daily-480-million-total/ http://9to5google.com/2012/09/05/eric-schmidt-1-3-million-an...) says "Google CEO Eric Schmidt announced on stage that 1.3 million Android devices are being activated daily, of which 70,000 are tablets." So tablets account for more than 5% of Android activations (not one half of one percent)
- lloeki 14y ago
  Sounds like someone made a decimal place error (5% vs 0.5%)
  - Ygg2 14y ago
    Well 70 000/1 300 000 * 100% = 5.38%, so it seems Gruber made the error. And yeah someone is wrong. Unless I'm mistaken and 1.3 million is by some weird definition 13 000 000.

226 points by defap 14y ago

> Tech writers have a natural aversion to lock-in, high prices, and dominant market leaders. You mean the same tech writers who have been breathlessly talking about tomorrow's iPhone 5 announcement for months? A device that fits this description exactly?

notatoad 14y ago

>It’s a heads we win, tails you lose strategy. That’s the brilliance... Amazon wins so long as you consume media content from Amazon, no matter if you play it on a Kindle Fire or an iPad. Apple only wins if you buy an iPad. It's amusing that Gruber can see the brilliance when amazon does it, but not when Google does it. This is exactly google's strategy with android, except that it doesn't involve users buying content. Google makes money when you use the internet. They win whether you use an iPad or a Nexus or a Kindle, Apple only wins if you buy an iPad.

dantiberian 14y ago
The key quote from Asymco's analysis of Android's revenue: >It might be hard to see the Android section of the chart so I expanded it below at 400% the original: http://www.asymco.com/2012/05/15/android-revenues-in-perspective/ http://www.asymco.com/2012/05/15/android-revenues-in-perspec...
- majormajor 14y ago
  Isn't that a comparison of hardware revenues vs Google Android ad revenues? And isn't that exactly Google's play—keep the market from being dominated by a single hardware company that could cut them out from those revenues? ('Course, Amazon has forked it to do basically the same thing, in some regards, so while it might work as an anti-Apple-hegemony move, the openness may have been too much, even from a business persepective.) "Android" revenue as a whole to be compared against Apple's hardware revenues would need to include Samsung, HTC, etc. And then I'm sure Apple's margins would still be higher due to their excellent supply chain, but it's not like they aren't spending any money making all that hardware.
  - 2muchcoffeeman 14y ago
    Remember when Apple was making 75% with only 8% market share? http://www.asymco.com/2012/02/03/first-apples-rank-in-mobile-phone-profitability-and-revenues/ http://www.asymco.com/2012/02/03/first-apples-rank-in-mobile... Linking to asymco is getting cliche ...
    - cooldeal 14y ago
      Remember how Microsoft makes >75% of the money and "wins" in the web server market with IIS? Or the majority of profits in the server OS market with Windows Server? Didn't think so, because there's no blog roll pushing that on the blogosphere and then given traction on HN. Asymco does pretty partisan analysis which has previously been debunked earlier. http://news.ycombinator.com/item?id=2471026 http://news.ycombinator.com/item?id=2471026 Wasn't he and Gruber making a lot of predictions and analysis that Android would never overtake the iPhone in sales? When that did happen,iPhone on Verizon was surely going to kill Android's ascendancy. When that failed to stop Android, they moved to the next metric that favors Apple, profit share. It's like, before he writes some articles, he thinks.. okay here are some new numbers, how do I make Apple look good and Android/others look bad with these numbers? The only problem is that some people on HN give the Apple fan blogs too much traction on HN. Hell, Paul Thurrott's http://winsupersite.com http://winsupersite.com is even hellbanned on HN from being submitted for the crime of being a Microsoft watcher site for which the punishment here is flagging to death.
guelo 14y ago
Apple hasn't turned on Amazon yet. As soon as they do Gruber will be the first to tell us how awful Amazon's strategy is.
- timfrietas 14y ago
  I think they've taken shots across the bow. Charging 30% for IAP right as they released iBooks was pretty squarely aimed at Amazon.
- mcav 14y ago
  Apple stopped the Kindle app from linking to the amazon bookstore. That's as close to war as you can get.
  - jcrites 14y ago
    Not really. No apps are allowed to link to places where purchases can be made for that app. The purchases need to happen within the app itself, at which point Apple gets a cut. If the app decides not to allow in-app purchases and cut Apple in, it may not link to other places where purchases can be made.
    - deleted 14y ago
      [deleted]
    - bergie 14y ago
      This may be, in the end, the worst mistake that Apple is doing with their platform. What shape would for instance web shops, or the SaaS market, be in, if the only way to run one was to give 30% of your revenue to Netscape. Netscape could still be alive this way, but web would be way smaller.
      - batista 14y ago
        >Netscape could still be alive this way, but web would be way smaller. Now, think your argument again.
      - 14y ago
insaneirish 14y ago
I, and millions of others, don't think Google when I think content. I, do, however, think Amazon. This is the difference between Google and Amazon.
Tloewald 14y ago
Amazon is, like Apple, a "sell people stuff at a price they're willing to pay" company, versus a "free but we will auction slivers of your soul" company. Apple makes most of its money up front, Amazon makes most of its money... um no one is quite sure how or if Amazon makes money. Google "gives" away goods and services and makes money selling ads ... like an old fashioned TV network. Not exactly the same thing at all. Oh, and how much net profit has Android yielded Google?
- StavrosK 14y ago
  > Oh, and how much net profit has Android yielded Google? Probably a whole lot. When my sister, who would otherwise be in front of a computer at most half an hour a day, can get an android smartphone for 150 euros and idly browse the Web all day, Google makes a shitload of money they wouldn't have if all these people were on cheap nokias.
  - eli 14y ago
    Don't iPhone users make just as many (probably more) Google searches as Android users? Or do you think that without Android, nobody would have put out cheap smartphones by now?
    - ekianjo 14y ago
      Probably more? As far as I know, there are more Android devices in the market than iPhones.
      - jccc 14y ago
        Android users are not using their devices the same as iOS users: http://techcrunch.com/2012/04/21/real-time-research-ios-dominates-over-android-when-it-comes-to-usage-says-chitika/ http://techcrunch.com/2012/04/21/real-time-research-ios-domi...
      - eli 14y ago
        No doubt, yet iPhone still generates more mobile web traffic than Android.
ThomPete 14y ago
Googles strategy with android is to serve ads but they do not have a model to get that to work. Until they do that Android is not a win.
- notatoad 14y ago
  Google doesn't have a strategy to serve ads on android? sure they do, it's called a web browser. Google has the largest ad network on the internet, and just about every time you view a webpage google gets a cut of it. It doesn't matter whether you use an android device or an iOS device or a windows computer or a potato, google makes money. if google can encourage people to use the internet more by selling smartphones, they win. The point of android is not to cannibalize iOS market share, it's to eliminate the dumbphone. They don't want anybody to ever be without internet.
  - ThomPete 14y ago
    That's not a strategy for mobile. If what you said where true more of their revenue would come from mobile. It doesn't, look it up.
- trimbo 14y ago
  Android is winning for Google in a massive way once you understand their goal. Google's Android and even Chrome strategies are that _no one_ should win at the OS/platform level. They never want another Windows, or Mac, or IE, or anything that prevents them from leveraging the open web because it's fronted with proprietary code that can block them. The best way to win at that game is to either force the market to adopt the system they can manage ("with Google" approved Android phones and the market) or make the web the only worthwhile source of truth among a hodge-podge of OSes that try to bolt on proprietary components. Even the major commercial forks of Android have not yet proved to derail this from succeeding.
  - rimantas 14y ago
    > that try to bolt on proprietary components I will always prefer something that has no ads bolted on.
hboon 14y ago
Amazon makes money from selling digital and physical media content as well as physical goods. Google makes money primarily from search-based advertising — YouTube which is digital content is around the order of 1B revenue whereas total revenue is in the range of 30B. Amazon makes money whenever you buy their content. Google not so much. When you have a strong platform player that have decisive power over how they locate information — in the case of Apple, (1) control over the default search engine in Mobile Safari, (2) control over what web browsers are approved for their App store (3) has their own maps app backed by their own services and partners, which doesn't include Google (4) demonstrated capability and intent to build alternate ways to access information such as Siri (5) demonstrated animosity — I'd say Google doesn't feel like they win if you buy an iPad. So correction, it should be "Google makes money when you use their services".
- Johngibb 14y ago
  The difference is with Amazon you're the customer, and the device and content are the products. With android, _you_ are the product and the advertisers are the customers. This distinction means that Apple/Amazon's interests are more aligned with consumers than Google's.
  - option_greek 14y ago
    "This distinction means that Apple/Amazon's interests are more aligned with consumers than Google's." Not necessarily. It simply means they have more incentive tying you down to their 'product' and stifle any competition. Google on the other hand couldn't care less about what device you use as long as you use their services.
    - chii 14y ago
      so instead of tying you down to the device, they tie you down to their services. In my eyes, thats not too different. At least with a physical device, you may be able to subvert any ill intentions.
      - 14y ago
blinkingled 14y ago
Talking about amusements - another one is that Android activations are still "activations" for Gruber, long after Jobs and co doubted if Google is truthful with their number. Gruber definitely gets his % numbers wrong though - half percent instead of 5% :)
schraeds 14y ago
Google makes more money off iOS users/devices than Android devices, in addition to all the cap ex goog has dropped on the effort.
batista 14y ago
>This is exactly google's strategy with android, except that it doesn't involve users buying content. Google makes money when you use the internet. They win whether you use an iPad or a Nexus or a Kindle, Apple only wins if you buy an iPad. Well, it's not the same at all. For one, Google wins a minuscule amount of money if you use the internet. Amazon probably makes more off selling 1 (ONE) Kindle book than Google makes from you using their search engine all year around on their tablet. Second, noone buys those other tablets (apart from iPad/Kindle). The numbers are 1/10 the iPad numbers and less. Third, Google doesn't even win when people use Kindle Fire, despite it being Android. IIRC, Amazon switched the search engine to Bing. >Google makes money when you use the internet. They win whether you use an iPad or a Nexus or a Kindle, Apple only wins if you buy an iPad. And how does that work for Google vs Apple revenue/profits so far?
- grogglesbegone 14y ago
  The iPad to alternate tablet market is more like 6:4, at worst 7:3, pre-Nexus 7. 1/10th or less is utter nonsense. Google is a $220 billion dollar company with great earnings based upon people "using the internet". Your comment on Google not winning with the Fire makes the assumption that Google only wins if you use their search engine. Not really.

thurn 14y ago

> Amazon is, to my eyes, the only company playing in the same league as Apple I think it's a bit premature to write off all other Android tablets entirely. In 2009, Android phones also seemed like they weren't in the same league, and none of us could imagine living in a world where Android outsold iOS devices 2-to-1, but it happened.

dave1619 14y ago
Definitely agree. Android tablets are vastly improved with 4.1 and project butter. Kindle Fire 2 is still choppy and sluggish from the preview videos I've watched. It's too early to dismiss Android tablets.
danso 14y ago
But the league isn't just hardware, it's services, content and distribution
- drivebyacct2 14y ago
  Which Google and Google Play offer plenty of?
  - MatthewPhillips 14y ago
    Amazon wins in media content, even over Apple. They have iTunes and Netflix in one.
- w1ntermute 14y ago
  Like drivebyacct2 said, you can get content from Google Play. But the really funny thing is, you can get all of that from Amazon on any Android tablet. I don't understand how people don't realize that all the Amazon apps on the Kindle can be installed on any other Android tablet. This is exactly what I did with the Nexus 7 - you can get the Amazon App Store, Kindle app, etc.
  - MatthewPhillips 14y ago

nostromo 14y ago

> I think Bezos’s best line at the event was this one: “We want to make money when people use our devices, not when they buy our devices.” I had the opposite reaction. Hearing this line, hearing about the ads on the lock screen, and seeing this slide (http://www.blogcdn.com/www.engadget.com/media/2012/09/amazonevent0184.jpg http://www.blogcdn.com/www.engadget.com/media/2012/09/amazon...), I immediately knew I wouldn't be switching from an iPad to a Kindle.

dangoor 14y ago
Everyone's different, but I have a "Kindle with special offers" from last year, and the sleep screen's ads are actually a feature. They're unobtrusive, informative and have actually saved me money. If the Kindle Fire implementation is similar, I wouldn't hesitate on that count. (There may very well be other reasons not to get one... We'll see when they come out!)
- cpeterso 14y ago
  What kind of ads or "special offers" does the Kindle display? Are they personalized for your Amazon account? How often are they displayed?
  - guga31bb 14y ago
    They are displayed in two cases: 1) When you turn your Kindle off, there will be a full-screen ad. 2) When browsing books at the main menu, a small horizontal bar across the bottom of the screen will display an ad. You only come to this screen by choice, though -- if you were in the middle of a book when turning off your Kindle, when you turn it back on it will go straight to where you were in the book without showing this menu. Since they never interfere with reading, they are extremely non-intrusive. I think they are personalized but not positive.
    - kpozin 14y ago
      Considering that Amazon knows about most of my online purchases from the past 10 years, the kinds of ads they show indicate that they are not at all targeted. Almost disappointingly so.

cageface 14y ago

The only thing I use my iPad for any more is the browser and the Kindle app so Amazon's pitch makes a lot of sense to me. But if anything I'm thinking of downgrading to an e-ink reader. I spend way too much time looking at backlit screens in a typical day already.

recoiledsnake 14y ago

That's an interesting improvement given Gruber's snarky dismissal of Amazon because of the quarter's earning numbers recently: http://daringfireball.net/linked/2012/07/27/amzn http://daringfireball.net/linked/2012/07/27/amzn http://daringfireball.net/linked/2012/07/27/amzn-profit-correction http://daringfireball.net/linked/2012/07/27/amzn-profit-corr... The whole Apple is superior to Company X because Company X makes far less profit might be what his target audience revel in, but is non-sequitur and gets old fast. How would he have reacted a similar comparison with, say Microsoft when Apple was not doing so well?

Tloewald 14y ago
This is hilarious. Do you know what it was like to be an Apple user from, say, 1987 to 2002?

Kylekramer 14y ago

Like Gruber, I really like the "we want to make money when people use our devices, not when they buy our devices" line. I often heard people deriding Kindles as merely vending machines for Amazon and I found myself slightly put off by that. But with that one line, Bezos really flipped a switch in my head to the point where the Amazon method seems much more fair to me as a customer than the one time hardware purchase model.

ippisl 14y ago

I'm not sure: "we want to make money when people use our devices, not when they buy our devices" is true. Amazon does makes a decent margin above the marginal cost of the $299 kindle fire HD and on the kindle fire HD LTE: http://www.eetimes.com/electronics-blogs/other/4395833/BOM-bom-bom-the-Kindle-Fire-refresh--?pageNumber=1 http://www.eetimes.com/electronics-blogs/other/4395833/BOM-b... It's hard to tell if they profit even after including fixed costs, but they might. But pricing it's low end model slightly above it's BOM is a signal to competitors: "we don't care to profit from sales, if you'll compete, you'll lose".

agscala 14y ago
I really like the last point you made there. I wonder what Google has planned to fight for the top? Google's Nexus line is their first step into the battle. They're obviously trying to get involved in the media game but they know they're late compared to Amazon and Apple. Surely they will be stepping up their game for the next release. Google can compete on price though, since they make money from the services they offer, just like Amazon.

pyang 14y ago

I think what separates Apple and Amazon from the rest of the pack is their simple but relentless pursuit of their values, and the extent to which they appeal to us customers. It's easy to understand their respective philosophies - Apple in terms of product design and quality, and Amazon in terms of prices and shopping experience. Both are now crossing into each others' territory - Apple with the future iPad mini and Tim Cook's operations knowhow, and Amazon with designing higher quality products. But both approaches are easily understandable by customers and appeal to their own values - innovatively, doggedly competing either on quality or price or both. On the other hand, I don't think it's hard to see that most other manufacturers' philosophies go along the lines of "Let's make everything we can think of and see what sticks." Microsoft, for one, is only starting to turn around from its philosophy of "We want to be everywhere in your life" to focus on customer experience. These approaches are business-centric, and don't present anything that the consumer can trust or grab onto, especially when you think about the various music stores and other half-hearted approaches at retaining consumers who buy their products. Intrinsically, I think customers understand the lack of focus - that these manufacturers are fundamentally focused on gaining a share of the pie rather than making customers really happy with what they just bought. With Apple, it's "Look at all these neat things I can do with all these apps"; with Amazon, it's "Look at all the stuff I can buy and read/listen to/watch." Other companies are only recently coming on board, and as long as they're not focused on giving the customer something to do with their products, they're going to miss out.

ariwilson 14y ago

70k/1.3m = 5%, not 0.5% as claimed by Gruber (re: Android tablets activated as a percentage of total Android devices activated).

chj 14y ago

Can't help thinking, is this a quest for a new god? I am a huge fan of AWS, love the Amazon's "pay what you use" philosophy. However, I bought a Kindle Fire before, and since decided not to buy any more in the future. Not matter at what price. Sometimes you shouldn't be doing what you are not good at.

jiggy2011 14y ago

He says nobody is buying other Android tablets, but what about the Nexus 7? I thought they were being sold faster than they could be manufactured. The Nexus 7 is pretty cheap too, is there any good reason to buy a kindle over one?

blinkingled 14y ago
Yeah 8 million Nexus 7s sold is what I heard somewhere. Only reason to buy Kindle Fire over it is if you want the option of a bigger screen and you watch lot of Amazon instant video.
- recoiledsnake 14y ago
  >Yeah 8 million Nexus 7s sold is what I heard somewhere Not really. Some analyst expects 8 million shipments Nexus 7 by the end of 2012. The guesstimate was based on LCD screen shipments.
  - blinkingled 14y ago
    Schmidt claimed 70K tablets activated everyday. That's 2.1M per month. Given they dont count the Kindles and no one else is buying other Android tablets the Nexus 7 has got to be selling 8M very shortly.
grecy 14y ago
> what about the Nexus 7? I thought they were being sold faster than they could be manufactured. The implied statement is compared to iPad, nobody is buying Android tablets. They might be selling faster than they can be manufactured, but it's still a tiny fraction of iPad sales. All of Google's revenue is a tiny fraction of iPad revenue.
- ariwilson 14y ago
  The last part of your statement isn't true. Q3 2012, Apple iPad revenue: $9.171B on 17M units Q2 2012 (different calendar system), Google revenue: $12.2B.

hcarvalhoalves 14y ago

I like Amazon and the idea behind the original Kindle (the e-ink one), but it bothers me: - They are all over with their tablets trying to compete with iPad or Samsung ones, it doesn't seem to have the same focus of the original: simply a good device to consume digital content. They will lose if they try to compete like that, trying to release full-featured tablets at low margins. - Their event is way too much like Apple's WWDC. I mean, even the slides look like they are done on Keynote. It doesn't give a good impression.

ebf 14y ago
- They are all over with their tablets trying to compete with iPad or Samsung ones, it doesn't seem to have the same focus of the original: simply a good device to consume digital content. They will lose if they try to compete like that, trying to release full-featured tablets at low margins. Why would they lose? The Kindle Fire seems like a great device to consume content: movies, music, books, and also many popular Android apps. - Their event is way too much like Apple's WWDC. I mean, even the slides look like they are done on Keynote. It doesn't give a good impression. Doesn't give a good impression to whom? Do you think the average Amazon costumer cares? I don't.
jonknee 14y ago
> Their event is way too much like Apple's WWDC. I mean, even the slides look like they are done on Keynote. It doesn't give a good impression. It was nothing like WWDC--there was no developer conference. It was a single presentation. That they possibly used a major presentation application to run a presentation is not very surprising. They probably had coffee in the back of the room too.
mikeash 14y ago
Why wouldn't the slides be done on Keynote? Keynote is an excellent presentation app, and it's not like Amazon makes their own presentation software that they ought to be using instead. I can't understand that comment at all.

dasht 14y ago

Amazon's main strategy is to broker transactions between its users and the vendors that supply those users. Amazon is aiming to be everyone's primary retail store for everything. Facebook's strategy is to own everyone's on-line "sharing". Google's strategy is to own everyone's "search" (broadly defined). Amazon wants to own everyone's retail experiences. Amazon would love it if slick devices were cheap enough to just give away -- they'd know instantly how to make huge money off that. Google and Facebook? Not so much.

lazerwalker 14y ago

I'm interested to see what happens with Apple's upcoming releases. A large (albeit not the only) component of Bezos' message is that the Kindle Fire provides an iPad-quality experience at a lower upfront price because Amazon intends to get most of its long-term customer value through media sales; that idea could suddenly become a lot more interesting if a hypothetical iPad Mini / Air is released at the same price point as the Fire. Amazon would still be very well-positioned (as Gruber puts it, "heads we win, tails you lose"), but it would certainly make the hardware sales race more interesting.

parka 14y ago

The latest offering of Kindle Fire might actually give the iPad a serious competition. I'm currently an iPad user. If I don't have the iPad now, I would be torn between buying the two. The Kindle Fire is cheaper. Amazon's customer service is great. But the most compelling reason is they have Amazon Prime. Being able to access all the Amazon Prime free movies and TV shows is a huge draw, at least to me. There will be those who will buy it to install their own Android versions also. Small group though. If I were to recommend either tablets to friends, I'm not sure which one I will recommend. Prior to this release of Kindle Fires, I would have recommended the iPad without much thought.

credo 14y ago

Gruber says "(Eric Schmidt even admitted last week, at Motorola’s Droid event in New York, that only one half of one percent of Android “activations” are for tablets" The source (http://9to5google.com/2012/09/05/eric-schmidt-1-3-million-android-activations-70000-tablets-daily-480-million-total/ http://9to5google.com/2012/09/05/eric-schmidt-1-3-million-an...) says "Google CEO Eric Schmidt announced on stage that 1.3 million Android devices are being activated daily, of which 70,000 are tablets." So tablets account for more than 5% of Android activations (not one half of one percent)

lloeki 14y ago
Sounds like someone made a decimal place error (5% vs 0.5%)
- Ygg2 14y ago
  Well 70 000/1 300 000 * 100% = 5.38%, so it seems Gruber made the error. And yeah someone is wrong. Unless I'm mistaken and 1.3 million is by some weird definition 13 000 000.