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Amazon Appstore an excellent work in progress ... now about that tablet rumor

Updated: March 23, 2011 5:29PM



On Tuesday, Amazon opened the doors on their Appstore, a new digital marketplace for third-party Android software. Just go through a few steps to install a new store app on your phone and then buying and installing apps is about as easy as buying ebooks through the Kindle store. All of your Appstore purchases are made through your existing Amazon.com account.

I caution the reader (and my editor) to restrain yourself from adding a space to those two syllables. It’s not an App Store: it’s an Appstore.

The space is important. Apple owns the trademark to “App Store” and as far as they’re concerned, Amazon can call it an Appstore or an App Store or an App (long, impatient French-waiter sigh) Store or any other duration of hesitation between those two syllables for all the difference it makes: only Apple can use that term to describe a mobile software marketplace.

On the face of it, this move is just an automatic legal maneuver. Apple’s reqiured to defend their trademark. But the moment Amazon made its move, a thought that had been percolating through my and many other observers’ heads for months got promoted from “Interesting speculation” to “Double-Hmm.”

“I bet Amazon is developing their own tablet computer.”

I don’t know that they’re doing this. But I do know that Amazon has all of the required pieces in place and that they — not Google, not Motorola, not HP, RIM, Samsung, or any other tech company who’s shoved their CEO in front of a press audience in the past year with a shaky tablet prototype and an even shakier list of things he’s allowed to say about it — are clearly in the best position to challenge Apple and the iPad.

Here’s what I’m thinking:

1) Apple has proven that content delivery is a key feature for these devices. You can’t just sell someone a $500 tablet and then wish them luck with it; you also need to erect a whole ecosystem of easy-to-buy, easy-to-install content around it.

Apple sells digital downloads of music, movies, TV shows, apps, and books. So does Amazon. Apple’s video library is way stronger; Amazon has the clear edge in books. Plus, unlike Apple, they offer Netflix-style streaming access to a large library of video content for an almost as-cheap-as-free annual subscription fee.

Amazon is also, naturally, an experienced retailer that knows how to deliver a satisfying shopping experience. They’re the only company that has successfully adapted Apple’s iPod strategy. The original Kindle was no great shakes, sure ... but it didn’t have to be. The device was just your access pass to the Kindle Store and its huge library of affordable, easy-to-browse, easy-to-buy content.

2) Last month, Apple made a big deal about how the iTunes Store is conceivably the online retailer with the largest validated customer list. Meaning, active customers with credit card information on file.

To back up their claim, they only compared themselves to one other retailer: Amazon. If a huge active customer base is key to success, then Amazon’s has to be at least as valuable as Apple’s.

3) During the same iPad 2 media event, Apple also made the point that the gold rush for apps is in iOS and the iTunes Store, not Android and the Android Marketplace. That’s very true.

But there’s an escalating gold rush for all kinds of creative content ... not just apps. And Amazon, by forcing independent content producers to go through far fewer hoops to get into its digital store, is in an excellent position to sweep the “everything else” category.

Amanda Hocking, who built a huge fanbase and paying audience without the help of a treeware publisher, probably inspired more authors than all of the Brontë Sisters combined when the story spread that she’d sold just a little under 185,000 Kindle editions in less than a year. There’s so much momentum behind self-publishing today that established treeware novelist Barry Eisler blogged that he’d turned down a $500,000 advance from his publisher for his next books.

iPad users can tap into all of that book content indirectly, through Amazon’s Kindle app. But that doesn’t make Apple into a stronger provider ... and it’s Amazon, not Apple, that gets the commission on each of those purchases.

And it wouldn’t take much for Amazon to legitimize itself as the friend to independent producers of books and music and video. All of those people are eager to partner with a distributor that can give them direct access to the consumer and a much better financial deal than they can get through traditional venues.

It’s not impossible to imagine a future in which great books, music, and video is being produced directly for the Kindle Marketplace. If that should happen, then a Kindle Tablet would reap the same rewards that the iTunes App store bestowed upon the iPad. All of the great mobile apps are written for iOS, without much immediate thought about producing them for other devices. This elevates the stature of the iPad and the iPhone by providing them with with the biggest library of the greatest apps ... and it also keeps a steady stream of thirty-cents-per-dollars flowing into Apple’s pockets.

A Kindle Tablet would gain fast legitimacy if it became the device where much of the best non-app content was appearing, months ahead of anything else. The whole device would certainly make it easy for the user to discover and acquire all of that content, too. Amazon excels at steering customers towards other things they might like to buy.

This is why I raised such alarms when Apple changed their subscription and in-app content terms for its developers. Apple can get away with that right now, because on the whole, it’s still a good deal for the producers. Content providers can either open a store in the megamall, where an operating corporation controls your business, or they’re free to drive into the middle of the desert with a pickup truck full of lumber and try to make money off of people who got lost while trying to get to the big mall. As soon as a new platform arrives that offers a better experience to content providers, Apple starts looking vulnerable.

4) Consumers are still driven to buy new content through the referrals of individuals. Amazon already has an exhaustive infrastructure for helping its customers recommend products to other customers, via whatever social-networking mechanism they like ... and Amazon also allows them to share heavily in the financial rewards.

Apple does have an affiliate link program. But it’s not well-publicized, it’s far from comprehensive, and it isn’t nearly as lucrative for individual users. Amazon credits its link affiliates for all of the Amazon purchases that someone makes after clicking an Associates link. If one of your Twitter followers clicks a link to the Procul Harum track you recommended, listens to the sample on Amazon, and then remembers “Oh, right: wasn’t I going to buy $2000 MacBooks for myself and ten of the people on my Christmas list?” you get a percentage of the $22,000 sale.

(Plus, I think, another nickel for the Procul Harum track that drove the customer there in the first place.)

It’s another “that’s where the gold rush is” metric. It makes a comprehensive Amazon digital store more attractive to bloggers, tweeters, and Facebookers than the iTunes Store. If a Kindle tablet had a “Recommend this thing I’m looking at right now” button as part of its basic infrastructure, that one feature would be a force-multiplier for the commercial impact of the whole platform.

5) Amazon is a company that can definitely produce a superb $349 color tablet computer.

It doesn’t matter who’s building the tablet: you can’t compete with the iPad unless it’s smaller, cheaper, or ideally both. Well, Amazon is the maker of the industry’s No. 2-best-selling tablet computer. It fits in your back pocket and it costs just $139.

In its own way, the $139 Kindle is just as spectacular a feat of design and engineering as the $499 iPad 2. The Kindle engineering team has always had a knack for zeroing in on the critical function of the device and then refusing to get precious about anything that isn’t absolutely necessary to that goal. The Kindle can’t compromise readability, battery life, or portability. Color and a touchscreen would be lovely, yes ... but are they required? No. And what do you win by getting rid of those features? You extend the device’s battery life by several weeks and you can knock one or two hundred dollars off the retail price.

They don’t mind making something that’s a little ugly, so long as it works. They don’t mind if people like me ask “But wouldn’t it be great if it had Feature X?” so long as the people who actually buy these things aren’t likely to ever know, or care, about the omission.

In a nutshell: Amazon keeps the Kindle on message. Although Amazon isn’t in the business of technological innovation, they have a proven track record for making inexpensive devices that people instinctively like.

It’s easy to imagine a review of a Kindle Tablet that wasted several paragraphs talking about things it doesn’t do before concluding that it does 80 percent of the things that 80 percent of potential iPad consumers want to do ... and at 50 percent of the iPad’s price.

6) Amazon has a retail channel that rivals Apple’s. There’s an Apple Store within a short drive of every home in America. Great. The Amazon Store is actually inside every home in America.

And Amazon is a lot less hidebound than Apple is on the “All customers must wear pants” shopping policy.

7) A Kindle Tablet would have an instant clarity with consumers that no other tablet can communicate ... not even the iPad.

There’s a real perceptual problem with tablets. Just what the hell are they, anyway? And how is the average consumer — someone who’s by no means intimidated by new technology, but who’s in no way mesmerized by the shining shininess of its shine, either — meant to know why they would want to have a tablet and their notebook?

Even the iPad suffers from this problem. It’s a brand-new category of computing and the differences are subtle if you’ve never spent time using one. You’ll get a clear picture if you sit next to me on a four-hour flight and ask me an innocent question about this computer on my tray table, but trust me: this solution comes with its own unique set of downsides.

But what’s a Kindle?

“It’s a book reader.” Sold!

The word “Kindle” is as intimately associated with that product category as “iPod” is with music players. Amazon wouldn’t need to describe their new tablet as “magical” when they already have “Kindle.” That one word would get millions of iPad fence-sitters inside the tent. Why should Amazon even care if these folks don’t discover the web browser and the email client after a few days? Or if it’s a couple of weeks before they install their first app?

8) Amazon has plenty of experience in rehabilitating nerdy free software and making it fit for human consumption.

We know that Amazon is hiring up Google Android developers. That’s not a smoking gun for the “they’re building a Kindle Tablet” rumor; other possibilities include “They want a better suite of Amazon apps for Android phones and tablets” (an Amazon Instant Video app for both Android and iOS would be pretty freakin’ sweet, wouldn’t it?) and “The next Kindle will, like Barnes & Noble’s Nook, be a book reader that happens to be based on the Android OS.”

But if Amazon were to build a tablet, it makes sense that they’d use Android as a starting point. If so, they’d do the same things with Android that they did with Linux on the Kindle: they’d humanize it and give it focus.

Finally, Amazon can succeed like Apple and maybe exceed Apple’s success in many places because it has the single greatest asset that any tech company can possibly have:

9) It’s run by a crazy billionaire.

Obviously I’m collapsing about three pages of explanation to two words that convey pretty much the same idea. The Kindle succeeded because Jeff Bezos was able to clearly and firmly put the focus of the whole company behind it. It wasn’t a “hobby” or “an emerging market that the company should consider establishing a presence in.” No: Bezos put everybody at Amazon on notice that they were all in the Kindle business ... despite the fact that ebooks had gained no traction in nearly ten years and that the public showed absolutely no sign of being ready to give up printed books.

This is not the move of a Sensible Billionaire.

Many companies are run by Sensible Billionaires. They’re usually very handsome and/or very pretty and they photograph exceptionally well. But these people are next to useless when it comes to pushing technology forward. Almost any company headed by a Sensible Billionaire will inevitably wind up like either Microsoft (an old-money establishment whose continued wealth derives from interest on capital that was built generations ago) or Google (a company that’s distracted by so many different projects and interests that nothing is ever allowed to succeed or fail enough to make any real impact).

No. Listen to me: Jeff Bezos has his own space program. I never tire of saying that. This is clearly not a man who’s intimidated by the scale of a project or the expense. If there’s a real chance of success, he’s willing to pour in the money, the focus and the motivation that are necessary for his people make it happen.

Amazon Appstore

About the Amazon Appstore itself. The Android Marketplace has always seemed pretty wonky to me, and in desperate need of an ass-kicking from a major retailer. Here’s Amazon lacing up its boot.

I like the Appstore. There are fewer titles to begin with, but that’s actually a feature. A lot of the dross is absent and it’s easy to find the most professionally-produced apps.

Plus, it’s tied in to my Amazon.com account. I don’t need to set up another paid account on another service just to install an arcade game where I shoot the gun by making “pew-pew!!!” noises into the microphone.

And there’s a terrific consumer bonus: a different commercial app will be available for free every day. On Opening Day, it was the 99 cent version of Angry Birds that’s tied to the release of the upcoming “Rio” animated feature. Today, it’s the World Series of Poker (normally $4.99).

Installing the Appstore isn’t particularly easy or difficult on the Android scale of effort. Ping Amazon.com via email or text message for a download link for the Appstore market app. You can download and install it only after enabling your phone to install unsigned software. A few steps and at least one “Wait ... what?” later, you’re ready to get new apps.

Overall, putting the Appstore on your phone is on par with what was required to install Apple’s OS X App Store on my Mac. I had to download an OS update and restart my computer, but it was a one-time thing and afterward, I was left with a much easier way to buy and install software.

It’s the same thing with the Amazon Appstore. I reckon that many new phones will arrive with the Amazon Appstore preinstalled, anyway.

The Appstore is a great new resource for the Android community. It improves a basic function that never worked very well to begin with.

As for this Kindle Tablet thing: I caution that it’s barely a rumor at this point. It’s just something that seems to make sense. Part of this long screen of speculation might just be wishful thinking on my part. I love my iPad, but I’m only a fan of great technology. At the moment, every other tablet maker seems to be focused on the Race to be Second. They seem to be well aware of just how little effort they need to put in if they only have to beat the third-best tablet on the market.

I said something controversial a few weeks ago when I claimed that the iPad has no competition of any kind from the makers who’ve already announced and described their new tablets. I can’t imagine a world in which any of these devices will distract any tablet shopper from the iPad.

An Amazon Tablet? Now there’s something to think about. There are plenty of people for whom the iPad isn’t an attractive choice. And if you’re an iPad lover like me ... would you like to be able to say that you prefer it over something else that’s actually worth having?



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