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Mercredi, 28 Septembre 2011 17:00

Dynamite the Levees: Amazon's Triple Threat to Undercut the Consumer Biz

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Dynamite the Levees: Amazon's Triple Threat to Undercut the Consumer Biz

Amazon CEO Jeff Bezos introduces a new tablet called the Amazon Fire, at an event in New York, NY, Wednesday September 28, 2011. Photo: Victor J. Blue/

NEW YORK — The advantage traditional paper-based media has always had over electronic media is that the consumer doesn’t have to bear the cost of the technology up front. If you buy a book or a magazine, the technology that enables its production and transmission is already built in.

The cost of the device can turn an electronic media gadget into a prestige device, like Apple’s iPod or iPad. But it’s nevertheless a hurdle for customers. $500 for an iPad or $400 for the first-generation Kindle is a lot of cash to drop for folks who want to read. It’s also a levee bottling up a torrent of content that can be sold and delivered over those devices.

With Amazon’s new $79 Kindle, $99 Kindle Touch, $149 Kindle Touch 3G, and $199 Kindle Fire, Amazon dynamites that levee. The devices aren’t free, but they’re so much cheaper than comparable products on the market that they will likely sell millions of copies and many more millions of books, television shows, movies, music and apps.

The digital divide between haves and have-nots just potentially got a lot smaller.

Amazon CEO Jeff Bezos unveiled the four new devices at a New York press conference on Wednesday morning. He seemed delighted to begin with the surprise new Kindles, and slow-play the long-awaited tablet — which dropped at a price much lower than most analysts earlier this week had guessed.

“Four years ago, we set out to improve upon the book,” Bezos said. The first iteration of the Kindle was greeted with skepticism, Bezos says, even from thoughtful, well-meaning people, who noted that Amazon had to create demand not only for the device, but for the content that fills the device. Unlike Apple — which benefited from Napster and CD ripping to popularize MP3s — Amazon had to make e-books popular, too.

“Kindle is an end-to-end service,” Bezos said. Amazon not only sells books, but delivers them directly to users’ devices and stores them free of charge in the cloud. And it delivers and syncs those books anywhere, not only to Amazon’s own devices, but to software running on computers and phones and tablets, including some of Amazon’s competitors.

Kindle Touch is a new e-Ink device with an infrared touch display, similar to some of the technology used by Barnes & Noble, Sony or Kobo. But it costs a lot less: just $99 for basic model with Wi-Fi, or $149 for the Kindle Touch 3G with free unlimited mobile connectivity. (Kudos to Amazon for keeping unlimited global mobile alive!)

The Kindle Touch also features an in-depth search index called X-Ray. Books include a built-in index — really a kind of mini-encyclopedic side file — that keys in to notable phrases and characters in the book. It’s backed-up by Amazon subsidiary Shelfari, but it doesn’t live within the cloud: it’s stored locally and paired with the e-book file itself.

Don’t worry if you love the old Kindle and don’t care about touchscreens. “We have many customers who expressly tell us they don’t want touch,” Bezos says. So Amazon is also delivering a brand new Kindle — lighter, thinner, with faster guts inside — without a touchscreen, but a five-way navigator and page-turn buttons for $79. This new Kindle (Kindle 4?) is shipping today. Amazon is also pairing this Kindle’s Special Offers ads with Amazon Local, for local deals, not just coupons for stuff to buy at

The Kindle Fire, tablet, though, is the star of this show, because it leverages everything Amazon offers, from its multimedia sales to Amazon Prime streaming video service and free two-day shipping and Amazon’s industry-standard cloud infrastructure.

Quick hardware specs for the Kindle Fire: 14.6 ounces, dual-core processor, 7? multi-touch IPS (i.e. infrared) LCD screen. What it’s missing: camera, GPS, 3G. It also has only 8 gigabytes of storage. But that’s a moot point: It’s a cloud-driven tablet.

Bezos took the opportunity to take a shot at Apple, pointing out the benefits of Amazon’s instant, wireless WhisperSync against a photograph of Apple’s iconic USB cable. WhisperSync now works just like Amazon books (or Netflix’s ability to hold your place); watch a video on the Kindle Fire, and you can pick it up at the same place on your Amazon VOD-enabled TV or set-top box.

Video isn’t the only draw of Kindle Fire over the mainstream e-readers. It also has Silk, a web browser leveraged by Amazon’s EC2 cloud processing power. Bezos calls it “a split browser.” It promises to use that extra computation power to do all of the DNS, TCP/IP, interactions, etc., on the back-end to make Silk much, much faster than competing mobile browsers. It also stores, reformats and compresses common instances of over-sized media designed for the desktop for faster mobile delivery. An Amazon engineer calls it “a limitless cache” to optimize the last-mile delivery between the web and the tablet.

And yes: Silk runs Flash.

Amazon’s unveiled a family of devices that stays true to its mission of bringing digital reading and media devices to as many people as possible. Now we have to see just how this market can grow.


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