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As Tablet Market Heats Up with Apple iPad Mini, Amazon Will Have to Add Fire to Kindle Fire

Amazon CEO Jeff Bezos

Five years ago this fall, Amazon Chief Executive Officer Jeff Bezos gathered the tech press in a New York City hotel and asked, “Can you improve on something as highly evolved and well-suited to its task as the book?” With that, he introduced the very first Kindle, a goofily angular device with a monochrome screen that nevertheless revolutionized the book business, boosted Amazon’s financial performance, and reshaped expectations of what everyone had previously thought was a simple online retailer.

On Thursday, Sept. 6, Bezos will again speak to the media, this time in Santa Monica, Calif., and the stakes will again be sky high. A year ago, to great fanfare (and a cover story in Bloomberg Businessweek) Amazon expanded its Kindle franchise by entering the tablet market with the Kindle Fire. The device, with a 7-inch display and the surprisingly modest price tag of $199, made a commercial splash, carving off a respectable piece of the tablet market from Apple’s iPad, the market leader. But the Kindle Fire was also something of a critical disappointment, with its chunky weight, bland industrial design, and lack of basic features like a camera and volume controls. Lately, Amazon has gamely tried to stoke the Fire’s fire—pointing to the number of five-star reviews on its own website. But if you look at the entirety of those reviews or talk to people who actually own the product, another conclusion is unavoidable: For the first time, many customers bought a device from Amazon and felt they didn’t get much value from it.

Now the tablet landscape has changed and the terrain is even rougher. This summer Google introduced the Nexus 7, a similarly sized and priced device with none of the drawbacks of the first Fire. Taking a page from Bezos and Co., Google has also started to advertise the product on its home page, one of the most well-trafficked on the Web. Even more challenging, Apple will reportedly lay down the gauntlet in the new micro-tablet market with an iPad Mini later this fall. If tablets are to be an important gateway to music, movies, e-books, and games—media products that make up half of Amazon’s overall business—Bezos is going to have to build a much deeper moat.

It’s a battle that highlights the fascinating distinctions between the technology juggernauts of our time. Apple’s advantage is its unsurpassed design prowess and its closed but comprehensive ecosystem, which provides a safe and satisfying digital playground…

Read more: Bloomberg Businessweek


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