Amazon Revamp Puts Apple On Notice

Amazon announced some excellent new Kindle Fire tablets and phenomenal pricing on Thursday. But make no mistake: Its battle with Apple centers on content services.

Los Angeles was practically built on alternate reality, so in the unfolding moments before Amazon's press conference at the Barker Hangar, one of those faux-retrograde event facilities on the south side of the Santa Monica Airport, it seemed conceivable to some people that the company would finally offer a tablet completely subsidized by content services.

No. Not even if the press conference were held in Hollywood. (The Wild Rice Krispie Treats with Salted Caramel were a nice consolation prize, though.)

Amazon introduced the Kindle Paperwhite, an incredibly juiced up Kindle e-Reader with a front-lit display, enhanced resolution, and unfathomably-good battery life (8 weeks!) for $119, plus an upgraded 7-inch Kindle Fire for $159. Those moves put much pressure on Apple, Samsung, and other tablet rivals, including Microsoft, which has yet to bestow a price on its eagerly-awaited Surface tablet.

Amazon, which claims to have captured 22% of U.S. tablet sales within nine short months of Kindle Fire's existence, also announced the 7-inch Kindle Fire HD, a thin (8.8 mm), light, HD (1280x800) upgrade to the original Kindle Fire, for the equally nice price of $199. An 8.9-inch version of roughly the same tablet with enhanced resolution (1920x1200, 254 pixel per inch screen with a polarizing filter) sells for $299. And since most high end tablets generally run about $499 (according to Bezos, but the prices have started to fall), Amazon stuffed 32 GB of storage and 4G LTE (at $50 per year) into its $499 version.

On Amazon's price comparison chart: iPad 3, 32GB 4G model, $729, plus a 12-month data plan (250 MB per month, 20 GB of cloud storage) at $230 for a grand total of $959; Kindle Fire HD, 32GB 4G model $499, plus a 12-month 4G plan (same limits) at $50, for a total of $549.

The unspoken question: Would you pay $400 more for the latest iPad?

PC Magazine's iPad vs Kindle Fire HD side-by-side comparison is pretty instructive on the features battle. In the sparse time we had to use the Paperwhite and 7-inch Kindle Fire HD, it was awfully hard to make any conclusive performance comparisons, even to the Galaxy Nexus 7.

Into the Enterprise, Like iPad

There wasn't much here for the corporate IT crowd, although Microsoft has created a custom version of Skype, and there is deeper Exchange e-mail integration, Bezos said. There was no talk of Silk Browser--the much-hyped browser Amazon announced with the original Kindle Fire, where much of the processing happened in Amazon's cloud--which met with negative reviews. But buried at the bottom of the press release, Amazon quietly announced a new version of Silk, with an updated core rendering engine and a re-engineered transport layer.

Despite its consumer-oriented appeal, if the Kindle Fire (in all of its forms) continues to give the iPad a run for its money, IT will have to consider how to accommodate the device on its networks, and in the hands of its users.

Perhaps it's a bit of a stretch right now, but IT will also have to consider the plausibility of context-aware services like Amazon's X-Ray (which brings up content related to a character in a book, or a movie actress, for example) and how it might be applied to corporate content and services.

As much as Amazon is encroaching on a space Apple has thoroughly dominated for the past 2.5 years (putting aside the recent success of Google's Nexus 7), Amazon has also done well in the Android tablet market. That's largely thanks to the Kindle Fire's $199 price point and the device's surprisingly perfect size. No other Android tablet manufacturer has managed to compete as effectively as Amazon has.

"People don't want gadgets anymore," Amazon CEO Jeff Bezos declared. "They want services."

Then Bezos momentarily geeked out on the new Paperwhite's front-lit display, with its patented nano-imprinted light guide; the Kindle Fire HD's IPS (in-plane switching) display and its laminated touch sensor to eliminate air gaps, and thus, glare. He revealed that the Kindle Fire HD would have dual-band 2.4 GHz and 5.0 GHz WiFi (like the iPad 3), dual antennas (the iPad 3 and Galaxy Nexus 7 each have one), and support for MIMO (where it stands alone). On this last point, Bezos bragged that only some high-end laptops incorporate MIMO--an intelligent antenna technology that helps increase wireless performance and range--because of the computational power it requires.

Bezos explained the gooey regard for the gadget candy (did we mention Digital Dolby Plus audio and a graphics engine that can provide over 12 billion floating point operations per second?): "Hardware is a critical part of the service," he said, and later dismissed notions that Amazon was interested in the proverbial razor/blade strategy. In other words, hardware is also a critical part of Amazon's business success.

Make no mistake, however, Amazon is in this to create a content consumption experience. Bezos emphasized that Amazon is interested in making money when people use the device, more than when they purchase it.

It's not far-fetched to wonder why Amazon didn't simply build a series of Android or iPad apps, or perhaps work with another manufacturer to deliver the Amazon content experience on any tablet. But just like Apple and Microsoft, Amazon must believe it can only compete effectively by completely controlling all parts of the tablet experience, including the hardware.

All the hullabaloo about better WiFi came down to Amazon's claim that it offered 40% faster downloads and higher speed streaming than anyone else, which is important on devices like these, especially with higher definition content, Bezos said.

Despite the focus on all of the tablets' technical specifications, the most exciting parts of the Amazon announcement actually did revolve around content services, namely the addition of features like Immersion Reading, Whispersync for Voice, Kindle Free Time, and X-Ray. Amazon has been hard at work to capture a lead in the content game.

Bezos continually prattled on about Amazon's treasure trove of content titles, including its "exclusive 180,000" books. Amazon's only real competition for content is Apple, which has the music lead, and arguably also the video lead; it can't touch Amazon on the book front. (PC World does a fair, but still inconclusive comparison of how Amazon and iTunes content stores compare.

Those who have discovered the beauty of reading digital texts, where it's easy to highlight and mark up sections, define words, and share content so elegantly, will be equally impressed with Amazon's new X-Ray technology. When applied to a book, it provides what Amazon terms the "bones" of the text, so you can get even more information about characters and terms. Say you're reading Hilary Mantel's Wolfe Hall/Bring Up The Bodies series, with its myriad of historical characters, many named Thomas (Cromwell, the main protagonist; Cranmer; Boleyn; Howard), and you need to sort them out--turning on the X-Ray feature provides a thumbnail of the character, who he is, and even lets you skip back to other references of him in the book for better reference. My very surface impression of this after very brief use was positive; only time, and more in depth use will determine how useful this feature really is. Also, the user interface is a little--pardon the jab--skeletal.

Amazon VP Jay Marine said that X-Ray doesn't require the book publisher to do anything differently--the burden of work is on Amazon. Behind the scenes, it is using things like Shelfari, Amazon's community-powered book lover encyclopedia, and Wikipedia to build its metadata, and that gets sent as a sidecar of the book, which Marine says "becomes a dictionary of the future."

Amazon is adding features like X-Ray to try to reduce the friction that still exists for those still making a transition away from paper books. The company also added a little timer that shows how long you have left in a chapter, based on its sense of how fast you read. I'm almost convinced, but I'm not sure what I'll do with my bookshelves now--firewood, anyone?

Not that Amazon has failed to drive the digital reading revolution--it showed a chart depicting Kindle book sales outpacing physical book sales (presumably books bought on Amazon) within a year of the original Kindle's arrival. Amazon also provided data that showed Kindle owners increased their reading volume by a factor of 2.56 times in 2008, and that climbed each year to a factor of 4.62 times in 2011.

Amazon is hardly satisfied with that. It also announced WhisperSync for Voice, which lets you listen to audio books (Amazon has added 100,000 new audio books to the Kindle Fire HD), and seamlessly switch to reading mode, and back without losing your place. An Immersion Reading feature highlights words as the audio track plays; Amazon pointed to studies indicating that this method can help enhance reading and retention capability. Amazon is adding the Immersion feature to titles as fast as it can. For now, Amazon says nearly 15,000 Kindle books are available in Immersion mode.

So Amazon's got the digital book market pretty well cornered. If it can continue to pressure Apple on music, movies and TV shows (for purchase, streamed, and otherwise), by being just as inventive, we might have an entertaining, competitive battle. On Thursday, Amazon did announce X-Ray for movies, which is somewhat similar to the service on books. The movie version uses IMDb meta data, but it applies it on a scene-by-scene basis: just touch an actress on your screen (keep it clean, please), and it brings up information about her, including a list of every movie she's been in. Once again, the content creators don't have to do a thing here.

Here's something parents should love: Kindle Free Time. This is basically parental control. You can go into the Kindle Fire and restrict the amount of time that specific device users (like each child) can consume particular types of content. You might choose unrestricted reading, for example, but only an hour of games or movies.

And while Kindle Free Time is intended as a parental tool to govern a child's use of the addictive device of the moment…well, I'm sure you might easily see where this could go in an enterprise setting. But perhaps we're teetering into Hollywood screenwriter territory now.