Home » Amazon, Tablets/Ereaders » Why Amazon keeps making tablets when the market has been struggling

Why Amazon keeps making tablets when the market has been struggling

6 July 2018

From The Washington Post:

The tablet, as a gadget, hasn’t had a great couple of years. The Consumer Technology Association, the tech industry group, expects that sales of tablets will drop 12 percent this year and revenue for those sales will drop 13 percent, extending several quarters of steady decline. The main bright spot in the market has been high-end laptop replacements, such as the Microsoft Surface or iPad Pro, with detachable keyboards. The familiar slate design has all but gone to collect dust in many minds.

That is, except at Amazon.com. There, tablet sales seem to be growing, and the products remain an integral part of the company’s strategies for selling its goods and services to consumers. Amazon ended 2017 as the world’s second-largest tablet maker, behind Apple, having overtaken Samsung during the holiday season, according to International Data Corp., which tracks tablet shipments.

Last week, the online retail giant released a new version of the Amazon Fire, the Kids Edition HD 10, a durable 10-inch tablet aimed at children, for $200. It also released a $40 dock that lets tablet owners put their devices into “Show Mode,” turning them into a screen that acts more like a small television for watching on-demand video, which you can control with your voice.

. . . .

Amazon doesn’t release sales figures, but analysts at IDC said that last year the company’s tablet business grew 50 percent in the holiday quarter,when it makes most of its tablet sales. Compare that with Apple, which IDC estimates saw just 0.6 percent growth at that time, or Samsung, which saw its market share decline by 13 percent from the previous year.

One likely reason behind Amazon’s success is that its tablets are inexpensive. A basic iPad will cost you $329; Amazon’s comparable tablet comes in at $150. Those prices are so relatively low that it may be easier to justify buying one to watch YouTube videos in the kitchen or to hand to the kids as a gadget of their own before buying them something pricier.

. . . .

But a relatively cheap price doesn’t sell a device all on its own. Amazon has also doubled down on pushing tablets as an entertainment experience. Take Show Mode. The feature allows you to watch content on your tablet on an ideal screen. “If you look at the usage on tablets, they’re essentially a television replacement,” Guenveur said.

Tablets also provide an alternative to dedicated Alexa devices, such as the Echo, she said. The Fire HD tablets now have Alexa voice control, allowing you to interact with them as you would with the Echo or Dot.

. . . .

With Amazon tablets, you never have to be without Alexa. And that’s exactly what Amazon likes to hear.

Link to the rest at The Washington Post

PG suspects there may not be a very large overlap between the markets and reasons for a lot of consumers to purchase an iPad and a Kindle.

The Kindle is fine for kids. For one thing, the Amazon Kid’s Tablet – $99/two for $149 – when PG just checked prices) is as close to indestructible as a tablet is likely to get plus it has a two-year warranty in case you back over it with a dump truck. Combining the durability, price point and warranty, it’s a killer deal for parent-regulated video consumption, silence from the back seat, etc. And don’t forget that it comes with internet kid-safeness all ready to go.

Plus, of course, the Kindle is a near-ideal way of teaching children that Amazon is the place where you can buy anything online. The lifetime value of a customer who gets hooked on Amazon at age 7 is huge. Online purchases = Amazon.

iPads are lovely devices, but scratches on the screen or the case show. The Kindle is sort-of splash-proof, but even if your child drops it in the toilet, a parent is going to cringe less if a replacement costs $99 (or maybe free under warranty) instead of $400.

Amazon, Tablets/Ereaders

35 Comments to “Why Amazon keeps making tablets when the market has been struggling”

  1. Felix J. Torres

    Amazon makes tablets because there is money to be made.

    Comparing Fire tablet prices to Apple is a bit disingenuous because Apple is an upmarket brand. Amazon prices are in line with other consumer electronics vendors’ Android or Windows tablets. Say, Lenovo, Asus, Acer. Lower than some, higher than others.

    Their margins might be typically Amazon-thin but they make money on the hardware. And then they make money on music, video, games, ebooks, and *ads*. Amazon is making increasingly significant money off ads, both on the web and on their hardware. And that is a bonus no other tablet vendor can claim.

    If upmarket vendors’ sales are down, it might be for the same reason as BPH ebook sales are down: high pricing in a mature market.

    In every market it is consumers who eventually decide the price the market will bear.

  2. Jonathan Mattson

    I always figured the reason why tablet sales and even the high end phone sales have dropped off a bit was because it seems like technology isn’t advancing as quick as it had been. I remember buying the first fire tablet, the second fire tablet, and then the third fire tablet. There seemed logical reasons to upgrade for features, processing power, and other upgrades.

    How many people who bought an iPad two years ago feel like they need to spend another 400 to get a new version that has…… How many people feel they need to upgrade to a new iPhone at 800-1000 just because……

    I’m still using the same desktop computer at home that I bought over 6 years ago. I don’t see any noticeable lag in performance with simple work processing, spreadsheets, and internet surfing. Yet i remember the computer i bought as a freshman at college was virtually useless by senior year.

    • Jonathan, a few months ago when a new IPhone (IIRC) came out, the UPS man who made a delivery to our house remarked that 95% of his deliveries that day were the new IPhones. Some people really want them. But this IS Apples home turf. (next door to Cupertino, CA.)

      I’ve never understood the Apple fanaticism.

  3. You can totally bet Amazon has thought about on-boarding customers at an early age. Once that kid has had that tablet for awhile and is a bit older, the parent might consider signing up for this…

    https://www.amazon.com/Amazon-Allowance-Gift-Cards/b?ie=UTF8&node=11453461011

  4. It’s still day one. Opportunity knocks and Jeff still answers the door. The way to have people think of you first is by having what they are most likely to want at a price they’ll like.

    Like Jonathan pointed out, things aren’t improving all that much or that fast – and what’s out there is more than powerful enough for most people’s needs.

    Heh, just ordered some hemp oil and uric acid supplements to see if they ease this gout I currently [not] enjoying, funny Amazon was the first place I looked.

  5. Combining the durability, price point and warranty, it’s a killer deal for parent-regulated video consumption, silence from the back seat, etc. And don’t forget that it comes with internet kid-safeness all ready to go.

    All of those reasons are why I bought two for my nephews a couple of Christmases ago. I keep it at my parents’ house, so that when the boys go over there they have something to occupy them during downtime. It’s so easy to use that — and this is the selling point — my parents don’t have to summon me for tech support 🙂

  6. “Why Amazon keeps making tablets when the market has been struggling”

    Uh, because they’re selling boatloads of them?

    (IMHO, iPads, like all Apple products, are ridiculously overpriced, especially compared to the competition. Apple Fanboys and Fangirls take the wallet hits with a smile… a vapid one.)

    • Terrence OBrien

      I actually gleefully smile, knowing how my Apple purchase bothers so many.

      • It doesn’t really bother, more like wondering if old uncle Bob is going to burn his eyebrows off starting the grill again this year. 😛

        • Felix J. Torres

          Uncle Bob should survive if he reads the manual.
          His checking account might not, though. 😉

          Too many people use Apple products for status signalling, most often those that can least afford it. Not Apple’s fault. If anything, they’ve toned down the kewl hype a bit under Cook, focusing more on functionality.

  7. I bought a 10 inch Fire tablet during last Thanksgiving’s Black Friday sale for $130 and it is the most satisfying bit of tech I’ve bought in the last several decades.

    The Kindle Fires are successful because they represent the best balance of cost and capability that can be found in a tablet. They are great for reading and watching videos. Their integration with Amazonspace can’t be beat.

    But what makes them really standout is the presence of features that Apple will not provide because of Steve Job’s personal preferences.

    My Fire came with a microSD slot that I have filled with a $40 128 GB card. Take a look at what Apple charges for an additional 128 GB of storage and you’ll understand why I am a confirmed Fire user. {A 264GB card will go into my Fire once Amazon has one that is certified for operation there.}

    I have more than a TB of technical reports on various space subjects. I am organizing them into libraries on specific subjects – launch vehicle design, lunar mission analysis, etc – that fit onto a single SD card. That way I can have a TB+ library of reports that are available for use on my Fire just by swapping in the correct card.

    But the biggest advantage of the Fire is that it will work with BlueTooth pointing devices. I have a BT keyboard that comes with a trackpad and it works just great with my Fire. I do not have to raise my hand to the screen to move the cursor or tap on something – the touchpad works fine for that. Or I can use a BT mouse. Try doing that with your iPad. The software in the iPad specifically locks out external pointing devices.

    I have a version of Open Office on my Fire and on my iMac. I can seamlessly move files between those devices with nary a problem using the Android file transfer program and a USB cable. My Fire and its BT keyboard make a perfect writing tool that I can carry anywhere and never notice their weight.

    In addition I have a Python interpreter on my Fire so I am able to write code to deal with various orbital mechanics problems without breaking a sweat.

    The Kindle Fire 10 inch is a most wondrous portable computing device and I am hard pressed to think of a reason to use anything else when I am out and about.

    • Felix J. Torres

      Thanks for the tip on Open Office for android, I’ve been waiting to see one. Didn’t know somebody had finally released it. (I use Softmaker Office and it roundtrips through MS ofice and OpenOffice PC beautifully. But it’s commercial so I can’t recommend it to everybody.)

      As for Fire10 storage…

      You should be able to do at least a bit better than 128GB.
      Newer Amazon gadgets (tablets and Fire TV line) support USB OTG adapters. So you can plug in an OTG card reader/USB adapter and plug in full size SD cards, thumb drives or even old stuff like memory sticks.

      Amazon and Monoprice have OTG adapters starting in the $3 range.

      FWIW:

      I just tried plugging in a 4TB external Hard Drive to the Fire10 and the hardware recognized it, launched ES FILE MANAGER, and added the drive to the mounted drives LIST. Unfortunately, the drive is formatted for NTFS and the file manager couldn’t see the contents. This is a known limitation of Android and the FireTV line so I wasn’t surprised.

      If you have an external Fat32 hard drive or thumbdrive around you might want to experiment. Some OTG adapters let you plug in multiple devices simultaneously. Mine has SD, microSd, and three USB ports. It is (optionally) externally powered so hard drives work through it.

      Here is a guide to external storage on the FireTVs:

      http://www.aftvnews.com/everything-you-need-to-know-about-usb-storage-with-the-amazon-fire-tv/

      Since the tablets use the same core OS they should, and seem to, behave the same way. So bigger than 128GB is possible. Even bigger than 1TB in some cases. 1TB flash drives are expensive but the 512GB ones aren’t too painful (~$150).

      Also, some niche flash drives have built-in OTG connectors. Look on Amazon.

      Also, even the cheapest OTG adapters support USB keyboards and mice and the FireTVs are known to work fine with the USB dongles for non-bluetooth wireless mice and keyboards. And Amazon itself sells an OTG wired ethernet adapter.

      The Fire tablets may not directly support the Google Play store (though it can be added easily) but they do just fine without it. The few apps I needed I just downloaded on my phone and moved the apk to the FIRE tablet. Hint: MS EDGE works very well. Might be useful if the MS ebookstore amounts to anything.

  8. I bought a used Fire from Azon for like $45. It’s useless for me. I wanted a tablet for my spinning bike that plays the Peleton App as I was tired of taking my iPhone and iPad out of their holders to fit in the bike bracket. Low and behold the App Store for Kindle doesn’t have that app. Peleton said maybe in the fall they would have their app ready for droid, Azon sounded like a distance third. So the fire’s collecting dust….I’m so use to the vast selection of the ITunes stores that I never stop to think about it for any other platforms.

    • Yeah, the Amazon App store is notoriously limited. It’s one of the major reasons the Fire Phone failed so hard (as I understand it).

  9. ‘With Amazon tablets, you never have to be without Alexa.’

    Gah…never buying a Fire again. This is insane. Why not just run naked down the street and save the peeping toms the trouble?

    • Felix J. Torres

      Some people don’t mind Alexa.
      Some even like it and swear by it, not at it.
      Others (like me) don’t even activate it.
      Different needs, different value systems.

      Just because it is *available* doesn’t mean you have to use it or even turn it on. The same is true of Cortana. Or Command Line Interfaces/shell windows in Windows and Linux. They are all *optional* interfaces made available for those that like or *need* them.

      The point in the article is that people who are merely curious or intrigued by voice interfaces don’t have to buy a purpose-built device to see if Alexa has value for them.

      Me, I don’t use Alexa or Cortana because I use the systems mostly for reading or writing instead of consuming media or for gaming. (I use my consoles for that.) Not out of paranoia.

      Now, when (not if) I can use voice commands in a word processor to supplement a mouse or touch interface I’ll happily turn the voice interface on so I can highlight words, sentences, or paragraphs and say “bold”, “italic”, “chapter title”, “body text”, etc. That would be of immediate value to me.

      Others have different use cases.

      I know of at least one person for whom Alexa and the Echo speaker is a quality of life enabler that allows a bed-ridden person to control lights and thermostats around the house as well as other appliances.

      Running naked down the street is not an option for her.

      Different strokes for different folks.

      • “Running down the street naked…” Well, that is an option for me, but the neighbors would quite rightly object. Not a pretty sight!

        I tried Alexa very briefly – and found that I had to scream at her to get her attention. I yell at my electronics often enough without adding another one (the “stupidphone” being the most usual target).

        OTOH, the elder daughter loves her Siri.

        • Yeah, I tried Alexa and ended up hating it. Not nearly as smart is it claims to be. And I am concerned about the privacy issue as well. Alexa integration in a device is a bug, not a feature, as far as I’m concerned.

      • Actually, I would give my left arm for a smart, voice activated AI. Sadly Alexa ain’t it. We both know how it works. Ditto Cortana and all the other so-called smart assistants currently available. It’s all smoke and mirrors, and even then it’s not that smart.
        As for being paranoid, it’s not paranoid if it’s true. Alexa’s little faux pas whereby it recorded a private conversation and then conveyed the recording to a random person on the user’s contact list happened. To real people. Whether that incident is evidence of a deep flaw in Alexa’s programming, or an exploitable /hole/ in Alexa’s security is irrelevant. It happened, and it can happen again because Alexa is a dumb listening device owned and controlled remotely by Amazon.
        I completely agree with you about one thing though, it is a question of choice, informed choice. Hand on heart, the day the technology improves to the point where we can run our own AIs, from home, under tight security, I’ll be the first in line to buy one. Of course I’ll probably be senile by then, but if I need voice recognition software before then, there are lots of independent assistive technologies available, not just Alexa.

        theor I controlled completelybelonged to , it’s not having 100% control of that AI that makes me, as you so sweetly put it, paranoid.

        • …and that last para will teach me to scroll down before hitting submit.

        • Felix J. Torres

          The incident that spooked you was because a couple were arguing and didn’t hear the various Alexa replies. It was a whole chain of triggers, not a single glitch.

          More operator error than anything.
          (Further checks have been added to the conversational filters.)

          Hanlon’s razor applies: “Don’t assume bad intentions over neglect and misunderstanding.”.

          It is leading edge consumer tech and, as they say, “you can tell the pioneers by the arrows in their back.”

          It is perfectly fine to decide the tech isn’t mature enough for your needs but that doesn’t mean it isn’t useful or even necessary for others.

          And, btw, Alexa and company aren’t AIs. They’re not even “AI”‘s. They are voice interfaces to a cloud-based pseudo AI. Cortana, for one, is usable to launch files and apps without the cloud component (natural language processor). It’s just another system interface like a Shell Window or a GUI. It doesn’t even need a microphone.

          None of this stuff is magic or inherently evil. You just need to know what you’re doing and how you use it. The problem isn’t the tech, it’s the hype.

          Blindly trusting the hype can get you lost in the outback. 😉

          http://www.dailymail.co.uk/sciencetech/article-2245773/Drivers-stranded-Aussie-desert-Apple-glitch-Australian-police-warn-Apple-maps-kill.html

          It always helps to “Read The Fracking Manual”.

          • lol – I enjoyed that article, although perhaps I shouldn’t laugh. As an Aussie I’m aware of the dangers of our bush. I’m also aware of how many tourists are killed every year in a variety of preventable accidents, almost all of them caused by ignorance. That said, I don’t remember the Apple maps incident making it into local, Australian news. Or perhaps I just missed it because I choose not to use geo location.

            And thanks for setting me straight on Cortana. I have Windows 10 on my laptop but use Win 7 on the desktop 99.9% of the time instead. I assumed Cortana was like Alexa because of all the call-home features buried in 10. My mistake.

            Suggesting that I’ve been ‘spooked’, however, seems to imply that I’m fearful of Alexa, or a Luddite who’s fearful of all new technology. I’ll assume that emotive argument slipped in unintentionally. I’m actually rather fond of new, exciting technology, as I’m sure you know.

            Regarding your comment about the Alexa debacle being ‘more operator error than anything’, I confess to being baffled.

            Is it that you don’t see the potential for harm in the technology? Or do you consider that potential harm to be negligible? A small price to pay for the convenience of being able to tell Alexa to turn on the lights or the TV or whatever?

            We are all responsible for our own choices, of course, but choices made in ignorance can backfire in unexpected, and as with the Apple Maps incident, potentially life-threatening ways. As for reading the manual…LMAO!

            • Felix J. Torres

              No, what I see is that the event was a one time glitch involving people who were not paying attention to what the device was telling them.

              The device asked for confirmation three times.
              What else could it do?
              Read their minds?

              The single biggest complaint about Echo devices is the microphones aren’t sensitive enough so when a glitch emerges claiming that it is too sensitive there is something being downplayed: namely that the couple’s “conversation” was way louder than the device’s maximum volume level. Which is plenty high.

              My position if that you adopt a technology, any technology, you should understand how it behaves.

              This case is no different than the stories of people who enable their car’s advanced cruise control/lane keeping feature and then start texting and end up crashing.

              Operator error.

              • I don’t think the Alexa argument example is the same as some idiot thinking cruise control means auto-pilot. The latter involves someone deliberately doing something, thinking it had a different effect than it really did. The former is the device being activated *by accident* and proceeding as if the activation had been intentional. If “user error” can happen so easily by accident, it’s still the device’s fault because things shouldn’t be able to happen by accident that easily. False positives like that are a design flaw. (One of the many straws that caused me to get rid of my Echo was when I was listening to an audiobook on a different speaker, and the Echo heard “echoed Remy” and immediately started spouting nonsense about the Grammy’s. That was a nuisance I didn’t need in my life.)

                • Felix J. Torres

                  And you noticed it right away, right?

                  False positive activations are not unheard of.
                  They are hard to miss.
                  But entire conversations with three levels of confirmation?

                  That has only happened once. And probably won’t happen again since they added a fourth level of error checking.

                  No technology is perfect; it is up to the user to know how it works and use it properly or not use it. The more powerful and more complicated it gets, the more important it is to learn its limits.

                  Not using is a fair and valid choice but using it improperly by ignoring its limits and then expecting miracles isn’t.

                  If nothing else, Darwin awards lie down that road.

              • ‘My position if that you adopt a technology, any technology, you should understand how it behaves’

                I agree. The problem is that most people who own and use Alexa/Echo do not know how the system works, just like they don’t know how their smartphones work, or a light switch or the internal combustion engine. They use the tech without understanding it. To them, Alexa is a magical, sci-fi AI that belongs to them and acts like an unpaid digital servant. And guess what? It’s marketed that way.

                I won’t go so far as to say that Amazon deliberately misleads customers, but it doesn’t bend over backwards to explain exactly how the systems work either.

                There is a world of difference between operator error and operator ignorance, and that couple had no idea that Alexa was even /capable/ of doing what it did.

  10. The toilet? Is this the unfortunate voice of grandparent experience?

  11. If Amazon doesn’t publish sales, how do we know sales are decreasing? Haven’t we been there before or do we need a Tablet Earnings website?

    Take care

    • Felix J. Torres

      Amazon tablet hardware is made by China, Inc to Amazon’s Lab126 specs and OS. So it is possible to know if their *shipments* are growing noticeably. This method revealed, back in early 2010, that the Nook was out-shipping (and presumably outselling) the Kindle 2 which led to the ill-fated four hour price war of June 2010, a most defining moment in ebook history. 🙂

      (Everything is connected!)

      Speaking of “connected”, hardware that connects to the Internet identifies itself and there are ways to measure how much traffic belongs to a hardware platform or app (say, browsers). This is one way (accurate) rumors spring up about upcoming hardware, like the FireTV pendant and FireTV cube, that were first detected last year.

      There is no privacy on the internet for anybody. The moment you connect you start leaving “footprints”.

      So, unlike ebooks, the tablet market is merely translucent and not totally opaque.

      (Mind you, there’s still number gaming going on, like how one Analysis outfit decided that the only tablets that count are seven inches or bigger and so excluded Amazon’s hot selling 6 incher from total numbers.)

      Some truths are truer than others. 😉

  12. i looked at the echo page this week and it looks like they are also adding screens to echo (as well as adding alexa to the tablets)

    interesting.

  13. There’s enough that I don’t like about my Kindle Fire that I don’t use it much at all anymore, but the hardware is not the problem. OTOH, I can’t tell how many people I’ve seen using iPhones or iPads with busted screens.

  14. Gosh, does anyone really this needs to be explained?

    Amazon makes tablets so they can deliver content. It is that simple – and it works, too. I never understood Amazon video until I happened to watch it on my Fire tablet, and really, the only reason I bought any video content from Amazon is that the tablet makes consumption so darned easy. Conversely, I haven’t bought videos elsewhere because consumption is a hassle.

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