AWOL From Amazon’s New Kindle Fire Tablet Lineup? That (Mostly) Ad-Supported Model*

* Updated below.

From my Forbes.com blog The New Persuaders:

A few days ago, it looked like an ad-supported (read: cheap) Kindle Fire might be in the lineup introduced this morning at Amazon.com’s debut of new Kindles in Santa Monica.

Sorry, no dice. The company did introduce a lot of other products, of course, including a faster, cheaper, $159 version of the Kindle Fire with longer battery life, as well as new high-definition “HD” models–including, in something of a surprise, one that has a nearly 9-inch screen. The 7-inch version with 16 GB of memory will be $199, the original price of the first Kindle Fire. It will ship Sept. 14. The 8.9-inch version will be $299, $200 less than Apple’s iPad, and will ship Nov. 20.

Amazon CEO Jeff Bezos also pulled an Apple-like “one more thing” move by introducing a $499 8.9-inch Kindle Fire, also shipping Nov. 20, that has 32 GB of memory and much faster 4G data connections, though that service will cost $50 a year for 250 MB a month. That doesn’t seem like much data, at least for video streaming purposes.

On the more traditional e-book front, Amazon also showed a new Kindle called Paperwhite for $119 for a WiFi version and $179 for a free-3G version, as well as a newly named basic non-touchscreen Kindle now called the $69 Kindle. That one, $10 less than the previous version, is the ad-supported Kindle.

But it’s not the cheaper ad-supported Kindle Fire that some folks apparently had expected. * Update: To make it clear, as Amazon did not at the launch event, all of the new Kindle Fire models will have some advertising, or what Amazon calls “special offers” and “sponsored screensavers” that previously were only on the Kindle with Special Offers. So in a sense, the whole line has at least a small ad component that ultimately may have some impact on the price of the devices. But it still looks fairly minimal compared with the potential for a tablet whose cost could be substantially subsidized by ad revenues in a similar way that carriers subsidize cell phones. Although Engadget reported Amazon would soon allow buyers to pay a fee to avoid ads, CNET now reports Amazon has no immediate plans for that.

Why not a much cheaper, largely ad-supported model, given that it would have provided Amazon an additional way to differentiate itself from Google’s, Apple’s, and other tablets? …

Read the complete post at The New Persuaders.

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Flashback to 2001: How Far Can Facebook Shares Fall Before They Can’t Fall Any Lower?

Facebook’s stock performance since May IPO

From my Forbes.com blog The New Persuaders:

I’m having a flashback, and it’s Mark Zuckerberg’s fault. OK, not exactly the fault of Facebook’s cofounder and CEO, but his company’s stock.

The swoon in Facebook’s shares, culminating in a close today at less than half their IPO price, brought back memories of what feels like (but may or may not be) a similar situation I observed a decade or so ago in the wake of the dot-com bust. I was covering Amazon.com during its period of rapid expansion, when it was far from apparent to everyone that it would survive, let alone turn into a blockbuster business.

Amazon.com’s shares–which went public at $18, as it happens the price to which Facebook’s shares fell today–had dipped below $6 a share in late 2001. Amazon had huge costs from building out massive warehouses around the country well ahead of its level of revenues, prompting one analyst to predict that Amazon would go under unless it changed its expansionist ways.

It was the one time I remember wishing that I weren’t prohibited by BusinessWeek rules from buying stocks of companies I wrote about. Having reported on the company for several years and knowing how the economics of its business worked, I was pretty darn sure Amazon wasn’t going under and that founder and CEO Jeff Bezos knew exactly what he was doing.

And he did. Thanks to his vision coupled with a determination to stay the course while adjusting for market changes along the way, Amazon is now trading at $248 a share. A mere 100 shares bought then would have realized 40-fold return for a pre-commission, pretax profit of $24,200.

I don’t yet have the same feeling about Facebook’s stock that I had about Amazon’s back then. …

Read the complete post at The New Persuaders.

Amazon’s Ad-Supported Tablet: What Took So Long?

The current Kindle Fire

From my Forbes.com blog The New Persuaders:

Ever since the first, rather expensive smartphones came out five years ago, I wondered: Why not offer cheaper ones supported by advertising? After all, even if you’d prefer not to see ads, you’re already taking a subsidy from a wireless carrier that often entails (I’m talking to you, Verizon) carrier widgets and interface limitations than are far more onerous than any advertising.

But since then, the only ad-supported portable devices that I can think of, at least that are still around, are Amazon.com’s Kindles with Special Offers. Now, however, the Wall Street Journal says Amazon may debut an ad-supported new 7-inch tablet as a followup to now sold-out Kindle Fires, as a way to offer a lower price in an increasingly competitive tablet market. The tablet could come as part of an expected Amazon launch of new tablets on Sept. 6.

The tablet apparently would display an ad as the device “wakes up.” The story mentioned no specific price break. The Special Offers Kindles offer a $30 to $50 price break, which if applied to the current Kindle Fire price of $199 would come in as low as $149. That would provide a considerable discount from Google’s Nexus 7 tablet, whose key appeal since it debuted in mid-July has been its low price.

Apple also is expected to come out with a similarly sized iPad Mini this fall, that could be priced as low as $249. However, Apple’s brand would still make a higher-priced device appealing to many people.

Assuming the ad-supported Amazon tablet actually launches, what took so long? Well, for one, tablets are still a pretty new category, so perhaps it just took awhile to work out the economics. Also, it’s possible that the ad formats on each tablet have to be so unique that it’s hard to get marketers interested at a more than experimental scale. Not least, a lot of people may figure that if they’re already paying a couple hundred dollars or more for a device, having to watch ads as well is a step too far.

But given that the three key tablet combatants today–Apple, Google, and Amazon–each are already in the ad business to varying degrees, and as it becomes clearer what kinds of ads work best on mobile devices, I wouldn’t be surprised to see more ad-supported models before long.

Why Google’s Nexus 7 Tablet Is Hotter Than Apple’s iPad

Cross-posted with some changes from my Forbes.com blog The New Persuaders:

For once, an Apple product isn’t the hottest piece of hardware on the scene. This week, at least, that highly enviable status goes to Google’s new Nexus 7 tablet.  According to reports, several retailers are sold out of the 7-inch tablet, and even Google’s own online store only has the cheaper, $199 8-GB version. The $249 16-GB version is no longer available anywhere except on eBay for a steep premium.

Of course, you have to remember that selling out doesn’t mean much without knowing how many sold out. This is a classic Apple ploy, though to give Apple credit, it usually turns out later that it sold a ton of whatever sold out. No matter, selling out a product shortly after its release still works great as a marketing tool, as you can see from the coverage gushing about “incredible demand.”

But Google deserves credit for more than just marketing. Now that I’ve tried it for several weeks, with a model provided temporarily by Google at its I/O developer conference, I can tell you why the Nexus 7 is the latest hot gadget:

* It looks and feels, to use the technical term, slick. The fact is, Apple’s products have a look and feel that few can match, and even the Nexus 7 doesn’t quite get there. But it’s pretty damn close. It feels substantial, while substantially lighter, of course, than the iPad. The swiping is very smooth as well.

* The 7-inch size is appealing and convenient. It’s easy to hold it in one hand, while swiping with the other. It also fits in a pants or shorts pocket (or purse, I’m guessing) surprisingly well for temporary transport. So I end up taking it more places than my larger tablet.

* The screen is no Retina like the latest iPad, but it still looks sharp and bright.

* It may not have all the apps, or some of the latest and greatest, that Apple has, but it’s got plenty. And some very nice ones, too, such as Flipboard and my current favorite, The Night Sky.

* Almost forgot–it’s cheap! For $199, it’s less than half the current $399 minimum for an iPad. That makes the Nexus 7 close to an impulse item, or at least a gift that won’t break the bank.

* Uber-reviewers Walt Mossberg of the Wall Street Journal, David Pogue of the New York Times, and even Apple fanboy/Google hater MG Siegler, himself, all like it. So does almost everyone else.

For all that, I can’t help mentioning the downsides. The default screens are a mess of apps, My Library (which features an Esquire cover of Bruce Willis that I really don’t want to see anymore), and recommended apps and magazines I couldn’t care less about (Country Weekly magazine? Really?). You can change the app organization, but at the outset, it’s haphazard, making it hard to find some basic ones at first. In particular, the nondescript icon for Google Play, which seems really key to Google’s ultimate success at mobile devices and apps, doesn’t suggest an app store. And who besides us Google watchers know that “Google Play” is an app store anyway?

As many have noted, there’s not much content in its Google Play store. But that means little to me because I’m a Netflix subscriber and can watch using the Android App. There’s also a Hulu Plus app. (But not Amazon Instant Videos via my Prime subscription, at least not without browser tweaks few will want to bother with; that may be a deal-killer for big Amazon video fans.) The device doesn’t have a rear-facing camera. Since I’m not using a tablet to take photos (partly because, in what is a weird omission, there is no built-in camera app), and since Skype is one of the killer apps as far as I’m concerned, the single front-facing one works fine for me. It’s WiFi only, though again, I wouldn’t pay for another monthly data plan anyway. And with only 8 or 16 GB of storage, you better be comfortable storing most of your stuff in the cloud (I am).

Finally, there’s apparently a problem with the touchscreen, though I haven’t run across it yet, that’s especially a problem for playing games. My own minor complaint about the screen, which I haven’t seen mentioned in reviews I’ve read, is that it’s just a tad too small, or at least the border around the screen is. It’s hard to pick up along the side, because too often I end up touching an icon and launching an app or stopping a video when I don’t want to. The recessed side buttons are a little hard to reach sometimes, too. These are quibbles, though.

Meanwhile, it looks like Apple is readying its own smaller iPad for under $300. That could well steal the Nexus 7’s thunder–especially since it almost certainly will do two or three things better than the Nexus 7 because it’s Apple and because it will be newer.

But for the next few months, at least, Google has a bona fide hit on its hands. And for all the right reasons, not just manufactured scarcity.

Read the original post at The New Persuaders.

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