This paper analyzes the Amazon Kindle Fire and the Apple iPad as complementary rather than competing devices. Drawing on trade publications and academic sources from 2009–2011, the paper argues that each device targets a fundamentally different user: the Kindle Fire is optimized for content consumption, while the iPad is designed for content creation. Key differences in screen size, storage, camera hardware, application support, and price point are examined. The paper concludes that rather than cannibalizing each other's sales, both devices will expand the total available market for e-readers and tablets through 2015, with Amazon dominating content consumption and Apple leading digital content creation.
The Amazon Kindle Fire, introduced on September 28, 2011, is positioned to expand the total available market for e-readers and tablet devices rather than simply undercutting the Apple iPad. Rather than the two products competing head-to-head, both will form a powerful market catalyst that broadens hardware, software, and content support for each platform (Romero, 2010). The intent of this analysis is to explain the differences between each device and to argue that both will serve to grow the overall market.
The Amazon Kindle series was initially developed for tablet users who want to consume and curate content, not necessarily create it (Lai & Chang, 2011). Amazon's business model with the Kindle is to move as many books and other forms of content as possible off physical shelves and onto their servers by converting them into e-books and Kindle titles (Kroeker, 2009). The Kindle then becomes the engine of a new business model that Amazon relies on to keep gross margins and profitability increasing (Shields, 2011). The Kindle has been specifically designed for this purpose: it is purely a consumption device, not a tool for producing content the way the iPad is.
The iPad has significantly more functionality and greater application depth than the Kindle Fire, and many reviewers consider it a low-end PC or netbook replacement (Perenson, 2011). The inclusion of a high-resolution camera and application software that enables digital video editing, titling, and seamless integration with YouTube and other video sites makes the iPad a capable portable content creation device (Lai & Chang, 2011). Families are beginning to replace their video cameras with Apple iPads for capturing family photos and videos of children at sporting events and school activities (Perenson, 2011a). Now in its second generation, the Apple iPad 2 has emerged as a viable portable platform, comparable in functionality to smartphones yet offering the features of a full netbook (Drew, 2011).
Each device meets a fundamentally different market need, and the design decisions behind each confirm this. The Kindle Fire features a 7-inch touch screen, only 8 GB of memory, support for the Amazon Cloud, support for Adobe Flash — critically important for e-books — and no camera or applications for content creation. Its price point is $199 (Sinha, 2011; Fox, 2011). The Apple iPad, by contrast, features a 9.7-inch screen, up to 64 GB of native on-device storage, and runs a full version of Apple's iOS operating system, which supported over 150,000 applications as of August 2011 (Perenson, 2011). Its price point begins at $499.
Given the wide variation in how each device has been designed, one will not necessarily cannibalize the sales of the other, as many commentators have suggested (Shields, 2011). Instead, the total available market for e-readers and tablets is expected to grow at a very high double- or triple-digit rate through 2015, with Amazon dominating the content consumption segment and Apple continuing to lead the digital content creation market — just as it has for decades with its PCs and laptops (Perenson, 2011). Apple's ongoing investment in advanced optics will further differentiate the two markets along the axis of digital consumption versus content creation (Leung & Moynihan, 2011).
"Double-digit growth forecast through 2015"
The Amazon Kindle Fire is optimized by design to be a consumer of content; the iPad, to create it. The advantages of the Kindle Fire include native Adobe Flash support, native PDF and DOC format support, a USB 2.0 port, free cloud storage, and a free month of Amazon Prime. The iPad 2 is purpose-built for content creation and publishing, offering up to 64 GB of internal storage, a high-resolution camera, a vast library of applications, and a proven product design with over two million units installed globally. Rather than one device defeating the other, both are likely to coexist and collectively drive the next wave of growth in the tablet and e-reader market.
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