Why I will not buy new Kindle Paperwhite

I like my Kindle – it is simple to use and Wispernet sync is fabulous. I like that it connects to Wikipedia and dictionary. Archiving is nice. It is not perfect for me however. I would have liked to have color screen. I would have liked to scroll though pages and chapters. Books suggestions are not relevant to my interests and my language.

The new Kindle has scrolling feature I’ve been waiting for however not color screen. If you read an illustrated book, especially one that requires you visually see things, such as Da Vinci Code, it is hard to do on black and white. New Kindle has several features that encourage children to read. Color screen would attract kids as much as if not more than those features.

Amazon Kindle Fire cools off?

When Kindle File went on sale about 6 months ago devices shipped totaled 4.8 million in Q4 of 2011. Analysts estimated strong sales numbers on par with Apple iPad which was also selling about 1 million devices per week and about 15 million total.

Now, number of online articles report that Kindle Fire fell off the cliff. Research firm IDC reports Amazon's share plummeted from about 17% in the fourth quarter of last year to just 4% in this year's opening quarter. IDC’s Tom Mainelli points to targeting and positioning difference of the two tablet products as a reason: "Apple's move to position the iPad as an all-purpose tablet, instead of just a content consumption device, is resonating with consumers as well as educational and commercial buyers." Bloomberg reports “Fatigue is starting to kick in about six months after a product has launched.” Apple sold 24% less iPads in the Q1, but somehow managed to increase market share to 68% from 55%.

However, this may be misleading. The main question to ask is how market share is defined here? IDC measures market share as devices gets shipped, not sold. I assume that Amazon shipped close to 5 million devices in Q4 for the holiday season and some did not sell and as demand seasonally weakened, resulting in Amazon shipping fewer devices for Q1. I assume that some devices shipped in Q4 were sold in Q1. Amazon has yet to disclose any numbers on Kindle sales. There is a definite seasonal effect in sales and shipments of the tablet devices but I have strong reasons to assume Kindle sales did not collapse as shipments indicate. If you look at comScore report showing global digital device usage (not shipments or sales), Kindle Fire commands more than half (54.4%) of Android tablet market, which trumps runner up Samsung Galaxy by more than 3 times.

How sales of Kindle Fire can further increase? There are 4 basic strategies:

1.       Increase promotion: advertising and incentives

2.       Increase channels

3.       Increase volume at the time of purchase

4.       Manage seasonal inventory 

Amazon usually does not have substantial marketing budgets and uses price as main incentive to stimulate sales. On the number two, news such as Target and some other retailers will stop selling Kindles may mean weaker devices sales. In addition, Kindle Fire today is US domestic product leaving international markets untapped. Taking Kindle Fire to the markets outside the USA can provide strong competitive response and boost sales. On the number 3 promoting a family purchase plan may increase sales. Finally, the holiday season is one of the best times to take advantage of opportunistic shoppers buying gifts.

Developers make more money on Amazon Appstore than on Android Market

For quite some time developers knew that iPhone user is more likely to pay for an app and they can enjoy higher revenues publishing with Apple. There are more free apps on Android Market and average price also lower than on iPhone app store.

Kindle Fire case is rather interesting. Expectations of success of a branched store should be low. A recent article reported that Amazon Appstore, which has selected apps from Android Market as well as Amazon-only, have their developers enjoy higher revenues than Android. In addition Amazon Appstore customers are more likely to buy an app than Android customers. Same article reports that over 60% of Amazon Appstore apps are paid compared to less than 35% on Android Market.

I am not surprised. Amazon customer are buyers – go to Amazon to make purchases. Google evolves around concept of free.

B&N is about to commit suicide: to spin off its Nook business

Kodak has been major player in photography for over the 100 years. Until it invented 13 pound camera that could record images digitally. The evolution of such digital camera and inability of Kodak to change with the consumer and the market will force the company into bankruptcy soon.

Barnes and Noble was founded about the same era with Kodak – late 19^th century. Unlike Kodak it did not invent digital book reader but did introduce its own Nook in October 2009. No sober analyst predicted the Nook to make a dent in Amazon’s Kindle business but you would need to empty several drinks before an idea of selling Nook arm (instead of brick and mortar arm) would come to mind.

“We see substantial value in what we’ve built with our Nook business in only two years, and we believe it’s the right time to investigate our options to unlock that value,” William Lynch, Barnes & Noble CEO, said in a statement.

If you are B&N shareholder the message is clear: Lynch is about to raise white flag above the headquarters. Value of B&N without digital is same as value of a gift’s wrapping paper.

Kindle pre-sales are on Fire

Blog Cult of Android reported leak info that Kindle Fire orders are getting in at the rate of 2,000 hour and 50,000 day. This is beating iPad and iPad2 upside the head silly with projected 2.5 million orders before the launch. iPad initially sold 300k units at the launch day. iPad2 sold 2.5 million only after the 1 month on the market.
We do not need to wait long.