Amazon “Fire” Android Tablet Undermines Google

Amazon’s new “Fire” Android tablet is an incredible act of audacity that thumbs its nose at Google, while using Google’s mobile OS in the background. Nowhere does the Google or Android brand appear on the device. Amazon has even created its own browser (“Silk”) for mobile web access.

Fire is an Android tablet without the Android Market or Google branding, though Google-branded apps are going to be available on the device.

Many headlines this morning tout the Fire as an “iPad killer.” The 7-inch device, built by the same folks that built the unsuccessful RIM Playbook, may impact iPad sales at the margins but it definitely won’t “kill” the Apple tablet. By contrast the Kindle Fire may have a profound impact on Android tablet sales by other OEMs.

The Kindle Fire’s price ($199) will mean that other 7-inch Android tablet makers (RIM, HTC, Samsung) will have to match or beat that price. And since Amazon is widely suspected to be subsidizing the Fire that feat will be next to impossible or impossible. However the Fire’s pricing will also affect larger Android tablets as well.

Most 10-inch Android tablets didn’t sell because they were a poor imitation of the iPad. Amazon’s aggressive pricing, content and software, together with its brand strength, will mean that 10-inch Android tablets will have to bring down their pricing to below $350 and more likely below $300 if they hope to survive.

But Samsung, Motorola and others are going to be hard-pressed to take such slim margins on tablets. They don’t have the content and services that Amazon has to recoup what they don’t make on hardware sales. It creates a real dilemma for them.

The forthcoming 7-inch Motorola tablet will now have to be repriced. So will the sub-$400 7-inch Toshiba Thrive. And the 7-inch HTC Flyer is now dead at $499. Neither Motorola nor Toshiba thought they’d have to sell their tablets for $199; but they will have to reprice them or they won’t sell — let alone “thrive.”

In fact, most people aren’t even going to look at other Android tablets now. The no-name Android devices that had been selling for at the low end (e.g., Archos) are now effectively dead because of quality issues and a lack of brand strength. These are strong statements but I suspect I’ll be proven right six months from now.

Only the iPad will be able to charge premium prices and withstand Amazon’s pricing strategy. However, if Amazon comes out with a 10-inch tablet and prices it as aggressively that would affect the iPad and force Apple to lower prices. (You can probably bet that a larger tablet is in the works.)

If Amazon becomes the dominant seller of Android tablets — it probably will now — that creates problems for Google on several levels. Google won’t control the Fire’s browser and apps will be sold or made available through Amazon’s App Store not Google’s Android Market. Microsoft could pay Amazon (speculating here) to make Bing the default search engine on Fire, and so on.

My prediction is that Amazon Fire will destroy all other Android tablets in terms of sales. Google will be forced to respond by building its own tablet, like the Nexus smartphones, and sell it at break even or a loss. Paradoxically, the iPad emerges as a much more “Google-friendly” device than Amazon’s Android tablet.

Related Topics: Channel: Mobile | Features: Analysis | Google: Android | Google: Mobile | Top News

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About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

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  • http://shoreviewpost.com Chris Dohman

    funny, not one word about the nook color, the closest thing to the fire on the market…

  • Craig Ewert

    Greg, the absence of the Google app store will be a hindrance to wide acceptance of the Fire. Using only Amazon’s store, the selection will be much much narrower (they don’t say so, but I’ll bet you my grandmother).

    I tried the B&N Nook with similar results. It’s a fine 7″ android on the face of it, but the first time you try to leave the walled garden, you get thwarted. I returned the device the next week.

    Maybe I’m wrong, and maybe Amazon will have every popular app in their market. Since one of them is a book reader for other book brands, I strongly doubt it.

  • TimmyTime

    “If Amazon becomes the dominant seller of Android tablets — it probably will now — that creates problems for Google on several levels. Google won’t control the Fire’s browser and apps will be sold or made available through Amazon’s App Store not Google’s Android Market. Microsoft could pay Amazon (speculating here) to make Bing the default search engine on Fire, and so on.”

    I knew Google would not like this, but it’s good to get official confirmation. Looks like this Android will also be a total fork, done independently of what Google does.

    But what’s the big deal, isn’t the Android ‘free and open source’? I swear I heard Googlers say that. How do Chrome or G search come in this debate, they are totally unrelated to Android. Google did the world a service with Android and Amazon took them up on their offer.

    Amazon will probably use Bing to avoid paying the Android patent license fee to Microsoft.

    This should make the benevolent Google feel happy, their gift to the world will be used by many more people. Celebrate!

  • http://europeforvisitors.com Durant Imboden

    I’m not sure that the Amazon Fire undermines Google any more than, say, a TV set-top box with Linux hidden in its innards is undermining Linux. It may not be promoting Google or Android, but look at the bright side from Google’s point of view: It isn’t promoting iOS or Windows, either.

  • Duglarri

    The only way Amazon was able to do this was the fact that they lucked onto a completed design that was paid for by Blackberry- who for some insane reason didn’t have a clause in their contract with the manufacturer that said, “You can’t go and sell this design and put someone else’s name on it.” Imagine if Apple made that kind of mistake- if the company that builds the IPad 2 was able to offer it to anyone- just install your own software. Bit of a leg up, wouldn’t you say?

    So unless RIM has paid for a 10-inch version of this for Amazon to lift- there’s not likely a 10-inch tablet in the works.

  • pioter

    The thing I found missing in price comparison is the amount of storage. Toshiba Thrive & HTC Flyer both have 16GB (optional 32GB), Kindle 8GB – in Apple’s terms that would be 100$ difference. Still 100$ to much, but you get Android Market vs Amazon Store in a walled garden.

  • G.T.

    Greg this is another ill thought out article in a long line of stupid group think articles that the Consensus herd has written about Google. Its just plain dumb. Why don’t you sit back for a second and ask yourself why Amazon feels a need to create a media tablet? Might they not feel very threatened by Apple and Google?? Might the move to digital media be a big risk to them? Ask yourself why people signed up for Prime accounts in the first place? Why did they go to Amazon in the first place? Then ask yourself who’s home turf is amazon playing on? They are going to steal android from Google, seriously give me a break. They don’t have the margin structure or the balance sheet to play this game. Oh and they actually need to make money off selling the media content if they are going to lose money on the tablet. Google doesn’t.

  • http://www.facebook.com/dan.baluta Dan B.

    You have trouble with your own SEO?

    Where’s this article? http://bit.ly/ozSlKW

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