Battle Of The Tablet Business Models: Amazon Kindle Fire


We’re looking at the tablet business models of Apple, Amazon, Google, Samsung and Microsoft. Today we focus on the Amazon Kindle Fire.

2.0 Amazon Kindle Fire


When introducing the new Amazon tablets, Jeff Bezos said:

“We want to make money when people use our devices, not when they buy our devices.”

Bezos’s description of the Amazon tablet business model would have been slightly more accurate if he had said:

“We want to make money when people BUY OUR CONTENT OR ACCESS OUR ADVERTISING, not when they buy our devices.”

Not as catchy, perhaps, but a tad more honest.

Bezos also said that he doesn’t believe in the razor/razor blade business model but I don’t know why because that is exactly the business model that the Amazon tablets are using. Amazon is selling their tablets (the razor) at or near cost and they are hoping to make their money from the sale of content and/or advertising (the razor blades).

Of all the tablet makers, Amazon is uniquely situated to make such a strategy work. While tablet makers like Apple, Google and Microsoft are interested in selling tablet owners tablets along with content such as music, books, television shows, movies and apps, Amazon is interested in selling their potential tablet customers EVERYTHING. Amazon has THE largest and most successful online retail store in the world. If Amazon can get you into their store and get you to buy things from their store, they win. To Amazon, the Kindle Fire isn’t so much a tablet as it is a vehicle designed take you to the Amazon store, keep you there and encourage you to spend your money there. It is just another form of advertising, marketing or promotion for the Amazon online store.

One of the brilliant “twists” to the Amazon strategy is that Amazon is saving money on software development by legally “poaching” their Amazon Kindle Fire operating system from Google’s open source Android. Google does all the work to create Android and then Amazon’s software engineers lift it whole and modify it to fit their specific needs. By the time Amazon’s software engineers are done modifying Android, their product barely resembles Android at all. In addition, they strip out all of Google’s money making properties and replace them with their own.

It must be particularly galling for Google to know that as they toil to make the Android operating system better and better, they are also toiling make Amazon’s competing tablet efforts better and better too.


Amazon’s tablet hardware and software is much improved from last year’s offerings but where Amazon really brings value to their tablet customers is in the one-two combo of low tablet prices and an unsurpassed online shopping experience.

Amazon is able to keep their tablet prices low because they don’t intend to make any (or much) money on the initial sale of their devices. They can give their customers more tablet for less because they are making it up in content and advertisement sales. Amazon wants to lure you into their store with their tablet and then keep you there with their service and overall shopping experience.

And while it’s true that Amazon is making money off of you when you shop in their online store, people LIKE to shop at Amazon. Amazon’s selection is world class. Their prices are rock bottom. And their Amazon store software provides customers with one of the finest online shopping experiences anywhere.

A couple of quick analogies to drive home how the Amazon tablet business model works.

— If Amazon were a movie theatre, they would sell the tickets to the movies for cost and make their money on the sale of popcorn, soda and candy.
— If Amazon were in the game console business, they would sell their consoles at cost and make their money on the sale of the games.
— If Amazon were in the clothing business, they would sell T-shirts at cost, but they would put them in the back of their store in the hope that you would buy more of their other merchandise as you went to and fro in their establishment.


The advantage of the Amazon tablet business model is that their tablet prices are very attractive to a very large portion of the population. Further, Amazon doesn’t have to provide their customers with the latest or greatest hardware or software operating system in order to be competitive. Customers will overlook the Kindle Fire’s rough edges because they know that they are acquiring the tablet at bargain basement prices.

However, the Amazon tablet business model has some serious questions and some serious limitations too.

  • Business Model:
  • Does Amazon’s proposed business model even work?

    As we said above, Amazon is using the give away the razor (at cost) and make your money on the sale of razor blades business model. But that model presupposes that the razor blades are being sold at a PREMIUM.

    Famously, Amazon’s margins are razor thin (no pun intended) – as low as four percent. What good does it do Amazon to give away tablets for cost if they’re only making 4% profits on the sale of their content? It makes little sense. Yes, 4% is better than nothing and yes, they’ll make it up in volume but, as we’ll see, giving away tablets at cost is hardly risk free.

  • Who, Where, How and What:
  • WHO

    “The logic of selling a product which has a profit model unrelated to the cost of goods sold is tricky. The incentives are different. The risk is not selling too few but selling too many.” ~ Horace Dedeiu

    Apple, Samsung and Microsoft don’t give a damn about WHO they sell their tablets to. They make their money up front, at the time of the sale. But Amazon has to be terribly careful WHO they sell their tablets to, WHERE their potential customers live, HOW their customers use their tablets and WHAT kind of demographic that potential tablet owner hails from.


    The Amazon store is currently only available in the United States, France, Germany, Italy, Spain, and the U.K. This means that few people outside of those countries would have any interest in purchasing an Amazon Kindle Fire. More importantly, Amazon has no interest at all in selling an Amazon Kindle to customers who don’t reside in those countries. In fact, they have a strong interest in NOT selling their tablets to those who cannot buy their content.

    Remember, the Amazon tablets only make money from the sale of content or advertising. Contrary to the business models of Apple, Samsung and Microsoft, tablet sales numbers do not directly affect Amazon’s bottom line in any way.

    And don’t expect Amazon to suddenly expand their services into other countries any time soon The Apple App Store opened in 2008 and Apple currently sells Apps in some 150 countries. But after a decade of expansion, iTunes still only sells content in 62 countries. Content distribution is hard. If it weren’t, Amazon would already be selling their content in far more countries than they currently are.

    Simply put, Amazon’s geographically limited content distribution means that Amazon tablets can only compete with Apple, Google, Samsung and Microsoft in the United States and France, Germany, Italy, Spain, and the U.K. For those who are predicting that Amazon’s business model will destroy or put a serious dent in the business models of Apple and others, this should serve as a severe reality check. Even if Amazon does well in the geographic areas that they serve, Amazon tablets will do little to damage the overall sales numbers of their competitiors.


    What Amazon tries to do with the brand is ensure that the Fire is in the hands of its most ravenous consumers. ~ Horace Dediu

    Amazon is also interested in HOW their customers use their devices. It you buy an Apple, Samsung or Microsoft tablet and throw it in a drawer and never use it, those companies still make their money. If you take an Amazon tablet and throw it in a drawer, Amazon makes no money. So it’s not enough for Amazon to get their tablets into the hands of consumers, they have to get their tablets into the hands of consumers who will continue to use their tablets and continue to buy Amazon’s other goods and services.

    This is analogous to the newspaper business. Newspapers could have dramatically increased their distribution by giving away their papers for free instead of charging for them. After all, newspapers made their money from the included advertisements and classified ads, not from the sale price of the newspaper. However, if newspapers were free, people who were not really interested in reading the newspaper would acquire them and use them for all sorts of unintended purposes such as lining bird cages or burning them for fuel.

    Newspapers had to charge enough to drive away those who weren’t going to read the newspaper but not charge so much that they drove away their target audience. The Kindle Fire has the same dilemma. It needs to be priced high enough to scare off the cheapskates but low enough to attract the bargain hunters. That’s a very tough, very tricky balancing act.


    Finally, the Amazon model of giving away hardware cheap does not attract the most desirable customers. It does Amazon no good to attract lots of customers if they are money-grubbing, coupon-clippers who refuse to later purchase Amazon’s products or respond to Amazon’s ads. It’s not enough for Amazon to sell their tablets. They have to sell their tablets to people who have money and who are willing to spend that money in the Amazon store.

  • Upgrade Treadmill:
  • During the Amazon Kindle Fire introduction, Bezos also said:

    “We don’t need you to be on the upgrade treadmill. If we made our money when people bought the device, we’d be rolling out programs left and right to try to get you to upgrade. In fact, we’re happy that people are still using Kindle Ones that are five years old.”

    Well, OF COURSE Amazon is happy that people are still using old Amazon Kindles. That’s their business model.

    Amazon makes no money from the sale of their hardware so they’re thrilled to have you continue to use their old hardware. They would like nothing more than for people to use their old hardware for as long as possible so that they don’t have to incur the expense of making and distributing newer hardware. However, this approach has some serious drawbacks and some serious risks.

    First, tablets are a fairly new device category. Tablets based upon Apple’s touch metaphor are only two-and a half years old. Accordingly, the hardware is still rapidly improving.

    While Amazon would like nothing more than to sell you a tablet and have you use it for 7 years — the same way that Microsoft, Sony and Nintendo sold their patrons game consoles and hoped that they would use them for 7 years — Apple, Samsung and Microsoft are following the exact opposite approach. They are iterating their hardware just as fast as they can.

    With tablets, as in smartphones, consumers have shown a willingness to rapidly upgrade their hardware and then sell or pass down their legacy devices to others. Bezos speaks of the “Upgrade Treadmill” as a negative but no one is forcing consumers to buy new tablets. They WANT to buy new tablets in order to take advantage of the latest and greatest hardware and software advances. Although it is in Amazon’s best financial interest to slow down the upgrade cycle, I doubt that consumers are going to stand for that. At this stage in the tablet’s evolution, upgrading is a boon, not a curse.

    Second, while a five year old device may be great for Amazon’s business model it’s terrible for Amazon’s platform efforts. Developers want to develop for a platform using a single operating system. (They never get that wish, but that’s what they want.) They want to provide their customers and potential customers with cutting edge software and they can’t do that if they’re forced to support 5 year old legacy devices. Amazon’s platform efforts are already far, far behind those of their tablet competitors and their business model makes it very unlikely that they will ever be able to catch up.

  • Apps:
  • Amazon may have more content that its rivals, but when it comes to Apps, they are woefully behind. Amazon is upgrading their App portfolio as fast as they can but the total number of apps available to Kindle Fire patrons is still relatively low.

    Further, Amazon has few large screen tablet optimized apps. Smartphone apps may be stretched to work on a 7 inch tablet but as tablet size increases, the need for tablet optimized apps increases too.

    Creating a thriving platform is hard. Ask Amiga in the eighties. Ask Windows Phone 7 now. Developers want to make money and they’re not going to make money if their platform is attracting penny-pinching scrooges who don’t want to buy content but do want to hold on to their tablet hardware for 5 years or more.

  • Limited Appeal:
  • The proposed Amazon tablets will be appealing to many consumers but it will also be unappealing to many more conservative groups. No government, business or scholastic organization is going to want to buy tablets that depend on advertising and which direct their constituents to the Amazon online store. Imagine, for example, legislators, or lawyers or students being given an Amazon tablet. It would be totally inappropriate for their purposes.

    Amazon’s business model lowers the price of its tablets and broadens its appeal to the masses. But Amazon’s business model also precludes it from ever being adopted by organizations. This is a significant limitation that seriously crimps Amazon’s potential overall market penetration.

  • Distribution:
  • Amazon’s distribution channels are extremely limited. Most of their sales comes from their existing online Amazon customers. While this is a large pool, it’s a finite pool and it makes it difficult for Amazon to reach out to new, potential customers.

    Further, Amazon’s distribution opportunities are actually becoming even more limited. Companies like Target and Walmart have recently stopped carrying Kindle devices because of perceived unfair competition.

    Many, many people will buy a tablet unseen, untouched, and online. But the vast majority of people will not. Amazon’s unique distribution channel might be viewed as both a blessing and a curse. But mostly, it’s an impediment to the growth of their tablet sales.


    Jeff Bezos has made it clear that he’s all in with tablets. I admire him as much as anyone in tech and if anyone can make Amazon’s strategy work, he’s the man who can do it. But, as we’ve seen, Amazon’s business model holds more questions than it provides answers. Pundits will gauge Amazon’s efforts by the number of tablets sold but the number of tablets sold is meaningless. The only thing that matters to Amazon is how much content and advertising revenue those tablets generate. And since Amazon is notoriously stingy with its revenue and profit numbers, it may be a long, long time before we know whether the Kindle Fire’s business model was brilliant or just bizarre.

    We’ve now looked at the Apple and Amazon tablet business models. Tomorrow, we look at Google and the Nexus 7.

    With Apps, Size Matters

    Ben Bajarin has written an important article entitled: “Windows 8 Tablet Fragmentation and the App Dilemma“. I highly encourage you to follow the link and read. it.

    His main thesis is so important that I’m re-stating it here in the hope that it will draw even more attention to his article and even more attention to this vital issue.

    “(Apps) are specifically designed for the current … screen size. (E)verything is placed where it is for a reason.” ~ Ben Bajarin

    There is a FUNDAMENTAL DIFFERENCE between an app designed for a smaller (3.5 to 7 inch) screen and an app designed for a 9.7 inch or larger tablet. The pundits don’t get this. Google doesn’t get this. Amazon may not get this. And Microsoft may be ignoring this fundamental truth because they simply have to. Let me explain.

    The Pundits Don’t Get It

    “And this size (7 inches) is useless unless you include sandpaper so users can sand their fingers down to a quarter of their size.” ~ Steve Jobs

    This Steve Jobs quote baffles many tech observers. There are literally hundreds of thousands of useful apps availabe for our phones and our phones are much smaller than a 7 inch tablet. Why then would Steve Jobs say that apps on a 7 inch tablet are useless when apps on the much smaller phone are perfectly usable?

    Steve Jobs wasn’t talking about EXPANDING 3.5 inch phone applications up to fit on a 7 inch screen. He was talking about SHRINKING 9.7 inch tablet applications down to fit on a 7 inch screen.

    You can blow up a phone app and make it run adequately on a 7 inch screen but if you take an iPad app running on a 9.7 inch screen and shrink it down to run on a 7 inch screen (which is only 45% the area of a 9.7 inch screen) it will be virtually unusable. As Steve Jobs said, you would need to sandpaper your fingers down in order to make them thin enough to interact with the app’s interface.

    Google Doesn’t Get It

    “Nonsense,” the critics cry. “Phone apps work perfectly well on tablets. Even Google’s Andy Rubin says so.”

    It’s true that he does say that. When the Nexus 7 was introduced, Andy Rubin made a point of saying that he was sticking with Google’s strategy of encouraging developers to write a single app for both phones and tablets. This same philosophy was reflected in one of his earlier quotes on the subject:

    “I don’t think there should be apps specific to a tablet…if someone makes an ICS app it’s going to run on phones and it’s going to run on tablets.” ~ Andy Rubin

    And there, ladies and gentlemen, is the exact reason why Android’s 10 inch tablet strategy lies in tatters and its partners tablet sales lie moribund. Google doesn’t get it.

    Optimized apps matter.

    iPad Developers Get It

    There are 700,000 apps in the iOS App Store. 250,000 of them – one quarter of a million – are specifically tailored to run on the iPad.

    Developers don’t develop tablet apps for their health and consumers don’t buy tablet apps for no reason. Some phone apps run adequately when blown up to fit on the iPad’s increased screen real estate. However, most phone apps are less than optimal. Some are virtually unusable.

    If you want an optimal phone or tablet experience, you have to tailor the app to the device’s specific screen size.

    Where Does This Leave Android?

    Until Google changes its philosophy on tablet apps, its tablets will merely run oversized phone apps and they will never have any success with the larger screen sizes and they will never seriously compete with any platform that has tablet optimized apps.

    Where Does This Leave Amazon?

    Amazon just introduced larger sized tablets. As smart as Jeff Bezos is, I think that he’s about to find out that there is a huge difference between a 7 inch tablet that can run stretched out phone apps and a larger tablet that demands apps optimized for the increased screen size(s). Without knowing a thing about the new, larger, Kindle Fire devices, I will predict that the larger form sizes will fall flat because they don’t add much in the way of content viewing over that of a 7 inch tablet and their lack of apps devoted to their form factor means that apps won’t add much to their value either.

    Where Does This Leave Microsoft?

    “In essence (developers) are not simply shrinking or expanding their apps to work on smaller or larger screens, they are in essence creating new app experiences for those screen sizes.


    Windows 8 touch based hardware will be so fragmented in screen size that we will see touch based Windows 8 hardware ranging from 10” all the way up to 27. If developers feel the need to optimize their software for a screen that is anywhere from a half-inch and even a 2” difference, what will they do when they have 4, 5, or 6 different screen sizes to target in the Windows 8 touch hardware ecosystem?” ~ Ben Bajarin

    Do you want to know the future of Microsoft’s tablet efforts? Then ask yourself: “How many apps are optimized for each of the various Windows RT and Windows 8 tablet form factors? If the answer is “a few” or “not many”, then that form factor is going to struggle.

    And while Windows 8 tablets run both Metro and desktop apps, what is the point of owning a tablet if the tablet apps are missing in action and it only ends up only serving as a lessor substitute for a notebook? You’d be better off buying a notebook instead.


    Apple’s iOS has 250,000 9.7 inch optimized apps.

    — How many apps are optimized for the various Android large screen tablets?
    — How many apps are optimized for the large screen Amazon Kindle Fire tablets?
    — How many apps are optimized for the various Windows RT and 8 large screen tablets?

    Do you want to know the future of tablets? One of the keys is optimized apps. If you don’t got ’em, you don’t got no future.

    Read Ben’s article and enjoy. Understanding his article is essential if you want to fathom the future of tablets.

    Of Course Amazon Kindle Fire Cannibalizes the Apple iPad

    One way I test and gauge insights is to engage in and monitor social media.  It’s certainly not the only way, but it is one of many ways.  One very interesting discussion I am monitoring is the Amazon Kindle Fire versus Apple iPad.  There are definitely two camps that exist and not a lot in-between.  So what will really happen between these two tablets?

    Different Target Markets, BUTimage

    One thing everyone needs to realize is that there are many different kinds of consumers with very different needs, wants, drivers, and checkbooks.  Sure, our friends and family kind of seem like us, but that’s because its human nature to surround ourselves with people similar to ourselves.  We may think that we are a lot different from our friends, but statistically, we are very similar.  Let me give you just one example….. According to the U.S. Census bureau, the median household income in 2010 was pegged at $49,445.  Do you make a lot more… a lot less?  You get the idea.

    As it relates to the iPad, there are consumers who would have stretched up to buy a $499 iPad 2 who will, instead, buy the $199 Fire.

    Different Needs, BUT

    The Fire and the iPad are also architected to address different needs, but that doesn’t necessarily dictate exactly what a consumer will do with it.  Tech.pinions colleague Tim Bajarin nailed it when imagehe talked about the differences in content creation and consumption on the iPad versus Kindle.  One thing to be careful with however, is what we mean exactly by content creation.  Is creating an email content creation?  Is cropping a photo content creation?  I happen to think it is and I believe that those who buy a Kindle will, in fact, be creating emails and cropping photos.  Why, because it’s the best available device they have to do that with at that moment.

    Here’s the analogy, and it’s a personal one.  My teenagers don’t own a tablet, and therefore they watch videos and read books on their iPhones.  It’s the best device they have at the moment, even though it would be a much more enjoyable experience on the iPad.  Problem is, Dad (me) is too cheap to buy another one.   Those who have a Kindle will be creating light content because it’s the best device they have at that moment.

    It Won’t Matter This Holiday Season

    In the end, none of this discussion is relevant this holiday selling season.  Based on information from my contacts, both Apple and Amazon have been conservative in their production forecasts.  Apple doesn’t want to get stuck with potential inventory before their next iPad and Amazon took a cautious tone given it’s a new product and they barely break even on the gross margin side with an untested video and music upside content model.

    Net-net, for the holidays, both will sell out and we won’t be able to see who will be the finest cannibal.  BUT after the holidays, when inventories are adjusted and there isn’t a line for either, if Apple either doesn’t adjust their pricing, introduce a lite-iPad, a 7″ iPad, or a new kind of subsidized business model, they will lose out in volume to the new class of 7” tablets, not only from Amazon, but also from Barnes and Noble.

    [thumbsup group_id=”4039″ display=”both” orderby=”date” order=”ASC” show_group_title=”0″ show_group_desc=”0″ show_item_desc=”0″ show_item_title=”1″ ]

    A $299 Amazon Kindle Fire- What It Could Be

    Last week the industry was engrossed in the Amazon Kindle Fire launch. There was lots of excitement, speculation and 299kindle2many questions on it. The $199 price point was one of the biggest points of excitement, particularly in that it was less than half the price of the Apple iPad 2. What could a $299 Fire look like? What features and use cases could it support over the $199 version?


    Design Strategy

    Every company needs a focused strategy, particularly in the risky tablet market,  and Amazon surely has one.  Amazon must balance inexpensive tablet “must haves” with ways to monetize their store.  That’s why consumers can buy an inexpensive tablet and Amazon doesn’t need to make 40% gross margins.  Their bet is that Fire consumers will buy their books, movies, TV shows, music, magazines, and maybe even durables.  So everything needs to lead to an Amazon purchase or be a required element.

    Operating System

    Amazon will stick with Android 2.X as their base as it’s the only OS that Google has opened up.  Google has yet to open up Honeycomb, even as Ice Cream Sandwich (ICS) is around the corner.  If Google opens up ICS, they would want to move there for many reasons.  First, they get access to larger screens, 10″ all the way to the TV.  Secondly, they would need to ask less of the developers to modify their apps to work decent on a 10″ display.


    The display would most likely be a 10.1″, 1,280×800, IPS display.  This is where the current cost break-point is right now.  The other possibility is 1,024×600 display, given these are shipped en-masse on netbooks and mini-notebooks.  Amazon could claim “HD” with both, but with x800 it would be “more HD accurate” given it could support real 1,280×720 (720P) movies.  Also at x800 they can claim that the resolution is better than the iPad 2 at 1,024×768.  That is, until the rumored iPad 3 comes out with Retina Display.

    Web Sites versus Apps

    One challenge Amazon will have with a 10.1” display and Android 2.X is the app’s appearance. It’s a stretch for Android 2.X apps to even look good on a 7” display. Many of them are blocky, because they were designed for a maximum of 5” displays. At a minimum, Amazon would need to write custom apps for mail, calendar, and address books. I can see Amazon encouraging users to use web sites via Silk versus apps as well and they would need to beef up Silk’s browser to do this. Today’s tablet browsers have limitations, limitations Amazon’s Silk could remove. One simple issue is tablet browser’s ability to access the file system. The iPad’s browser, for example, is unable to upload photos to Picasa. This is why you need an app for that. Silk could conceivably remove the barrier.

    Processor, Storage and RAM

    While it doesn’t necessarily need more of this for a better experience, the competitive optics demand a bump, particularly on storage. There’s no reason to move beyond the OMAP 4, particularly if the $199 Fire has the TI 4430, which can easily do 1080P HD video.  RAM could very well stay at 512MB, but for the optics, would most likely move to 1GB.  Storage would definitely bump beyond 8GB to at least 16GB.  Apple has made storage the break point for iPad, and Amazon knows they cannot be at a disadvantage, even with Amazon Cloud Storage as the backup.

    Living Room Entertainment with Remote Control

    Here’s where it gets interesting.  The $199 Fire is designed for individual video content.  The step-up $299 could be positioned as the living room alternative to the “over the top” set top box.  By providing a simple HDMI 1.4 port out and a remote control, consumers could watch all the 1080P TV and movies from Amazon Prime and Amazon VOD.  Consumers are always looking for a way to justify that extra $100 and this alone could be the reason.  To accomplish the same this on the iPad, the consumer needs to buy the expensive HDMI connector and have an iPhone, load the “Remote App”, and setup AirPlay.   The other Apple alternative is to buy an Apple TV, and extra $99.  Amazon could have a cost and simplicity message over Apple in the living room.

    Optional Living Room Dock

    Taking the living room video usage to the next level, Amazon could offer an optional $29.99 dock which makes living room video even easier.  Place the $299 Fire into the dock and it gets power, HDMI out to the HDTV, speaker out, and Ethernet.  This would be an easy way to connect the Fire to the TV.  It also provides another justification to buy this over an “expensive” $499 tablet that doesn’t provide this option.

    Camera and Mic Enable “Entertainment Assistant” App

    If the $299 Fire has a front facing camera and microphone, Amazon could “listen” or “watch” the content you are consuming in your living room. This would be user-driven as not to be “creepy”. Think of it as Pandora for all types of content, including TV shows and movies. The user could point the Fire to the TV, press a button and a few seconds, an in-context search result would result. In addition to the news and social media results, it would also show relevant results from the Amazon store.

    All it would take is for Amazon to index what they already have. They have access to 18M pieces of content; TV shows, movies, songs, books, and magazines. With Silk, they will also know every web site you access, where you shop, what you buy and how long you stay there.


    Even without any access to the rich Amazon data, simple Evernote was able to extract “Dallas” from this photo. Google Goggles is able to extract “Fox Sports” too. Now imagine this capability with Amazon’s access to basically all content and wherever you have ever browsed.

    Camera to Improve Shopping

    At $299, consumers will expect a camera, maybe even two.  What’s its primary role?  Shopping, of course.  What?  Yes.  Like I said before, everything needs to lead to the Amazon store.  The camera could serve as an augmented reality try-before-you-buy feature.  Amazon is great at selling physical books, DVDs, electronics, and toys, but what about items that are better sold in a retail store?

    • Clothing: In conjunction with the TV and remote, see what different clothes look like on you and get the perfect fit, too.  The camera is taking videos of you and overlays the clothes on you.  What to change the color or size?  Just use the remote.
    • Jewelry: Watches are interesting.  Will the face be too big on the wrist?  Is it too masculine or feminine?  Use the Fire to see what it looks on you before you buy it.
    • Shoes: Afraid of getting the wrong size or that on you it looks ugly? Print the Amazon Sizing Grid.  Take the picture with the Fire of your feet on the grid.  See how it looks on you; get the right size shoe, including the correct width.  Now that it has this much info, why not now introduce custom show sizes?
    • Home: How will those towels look in your bathroom?  That patio furniture on your patio? That lamp on your end table?
    • You get the idea; use the camera with augmented reality to make the shopping experience more fun and with less risk.

    Camera for Universal Videoconferencing
    What if your parents use Skype and you use Apple Facetime? One of you needs to change programs or you don’t get to communicate with each other. Amazon, with its data center prowess, could become the “universal adapter” for video services, and make money doing it. Skype, FaceTime, Google Video, Yahoo Messenger, it doesn’t matter. If you use Amazon’s service, you can connect to all of them. A stretch? Maybe, but remember, via Silk they know every site you go to and have a login as well. What’s to stop from the “embracing and extending” if they can further lock in customers?

    A Note on Living Room Gaming

    Amazon could relatively easily use the dock above, the included remote to enter living room gaming.  But they have a big issue.  Android 2.X looks horrible on the big screen.  Even Angry Birds.  I have tried racing games, too.  So Amazon would need to further break, or fork, from stock Android to make this happen.  Developers would need to do this, too.  When or if Google opens up Ice Cream Sandwich could be the time this happens.  I cannot imagine Amazon going after living room gaming without ICS, although tempting.


    I have no inside information whatsoever on any future Amazon Kindle Fire.  BUT, it only makes sense for Amazon to introduce a higher-priced, higher-feature tablet to intercept the 10″ competitors.  Also, given Amazon’s business model, these features must drive store revenue, too.  This $299 Fire as I have laid out does all of these things.