Kindle Fire and the Compelling Event

No sooner had Jeff Beezos publicly introduced the new Kindle Fire than commentators began dissecting it and making bold predictions.

Some insist that it is an iPad killer based on price point alone. Others believe it has carved out a new space and will succeed by enlarging the tablet market rather than cutting into iPad’s share.

Regardless of how the increasingly competitive tablet market plays out over the coming years, recent developments have revealed some interesting aspects of the tablet market that may be lessons for corporate IT decision makers. Consider that the prices of main-stream mobile devices are dropping. Although Kindle Fire has fewer features than the iPad, it has essential features for quickly viewing a wide range of image, video, and text based information. And at $199, the device is practically disposable.

This downward price trend is also true for high end smartphones. When iPhones first came to market four years ago, they sold for $599 (for the 8Gig of memory model). Within a few years the price point for high end phones settled in to the $200 to $300 range with a contract. However every new smartphone model comes with more computing power (including dual-core processors for the new generation), more memory, and other new features its predecessor did not have. This makes the new phones more serviceable devices for the same price.

Another interesting insight into pricing of mobile devices comes from HP as it lurches forward in search of a vision. When HP announced it was getting out of the tablet business and dropped the price its unpopular TouchPad from $379 to $99, it set off a mind boggling buying frenzy. Some observers noted that price matters.

Jeff Beezos suggests the success of tablet devices depends on the information services behind them (and in an earlier blog, I had made a similar observation, context can be a driving force). The iPad currently dominates the tablet market with a rich applications store and iTunes. Amazon’s Kindle Fire comes to market with books, streaming video, Android’s application marketplace, and a different kind of browsing technology that is supposed to accelerate access to internet based information. Other tablet makers have largely failed because information is not part of the offering. It is the information behind the device that matters perhaps more than the device itself, or as I have said in the past, the compelling event is the app.

One lesson here that is relevant to mobility in business is that the devices themselves are not so important. In fact devices are becoming so cheap and so functional that device adoption decisions are more like non-decisions. What makes these devices valuable is their relationship to corporate information. What applications will they run? What back-end data is available to workers? How can mobile workers use their devices to augment the data everyone on the organization depends upon? These are the real questions.

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