Amazon sets tablet market on fire — but not in Europe
Oct 3, 2011 4:14 PM
Amazon’s Kindle Fire will not be blazing a trail across Europe just yet.
The only surprise about Amazon’s new Kindle Fire tablet, given all the advance speculation, was that no date has been given for its launch in Europe. Other details were much as expected, including the fact that it builds on the Kindle brand already well established for e-books, and the new focus as a video as well as an e-shopping device. Amazon is playing down the idea that Kindle Fire is an iPad killer, even though analysts are predicting it will quickly seize a substantial chunk of the tablet market. According to Forrester Research, Amazon could sell three to five million tablets in the fourth quarter of 2011 immediately following the launch, compared to 9.25 million iPads sold in the third quarter of 2011.
But, this figure would be boosted by European availability, leaving analysts to ponder why this is not happening yet. The first idea to surface was that it was held back in Europe by data privacy concerns surrounding the new browser and the way content is rendered via Amazon servers that may not be located in the same country. The European Union has rules prohibiting such rendering based on personal data, although member states have interpreted these rules rather differently in their national legislation. This does not explain, though, why the lower-priced Kindle Touch announced at the same time is not available in Europe either.
The actual reason is more likely to relate to the fact that, like the iPad, the Kindle Fire is not just a device but part of an ecosystem, which Amazon is attempting to build around content, particularly video. In the U.S., Amazon will probably break even at best on the device itself, and plan to make money by selling content (particularly movies and TV programming) in a model that could threaten pay TV operators as well as challenge Apple. In the U.S., Amazon has the components of this ecosystem in place. It does not in Europe, however, and without them the Kindle Fire is much less compelling, being almost just another low cost wireless device.
It is true that Amazon does now own the UK-based online movie distributor LoveFilm, which trades in other European countries, and this signals its intent to be a major content player there. It looks likely the Kindle Fire European launch will follow early in 2012, and that the Kindle Touch has been held back until then to avoid confusing the market.
Meanwhile, Kindle Fire could at last bring Google’s Android operating system to life in the market, since this is powering the Kindle Fire. So far, Android devices have failed to make much headway against the iPad in the tablet market.
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