New Strategies in the Android Ecosystem: The Amazon Effect

Amazon has recently upgraded its status in the Android ecosystem, transforming from a lowly OEM to a powerful force and one of the most popular manufacturers. They capitalised on a smart business decision that pushed other Android OEMs towards that model. But how did Amazon achieve such greatness while others fell short?


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Amazon’s Strategy

When entering the Android ecosystem, Amazon took a completely different strategy than other companies like Motorola and Samsung. In fact, it was clear that they had to go in a completely different direction if they wanted to stand a chance.

Devices

Amazon started their Android adventure by releasing a tablet designed for a very specific group of people. With the release of the Kindle Fire, Amazon created an incredibly easy way for people who have never owned a tablet before to get into the game. They targeted the crowd who did not want a tablet badly enough to spend a few hundred dollars on something like the iPad or the Galaxy Tabs.

By keeping the price extremely low, Amazon made the original Kindle Fire an impulse buy. This was the first time a high quality tablet had ever been cheap enough to be purchased by people who weren’t necessarily looking for a tablet at that time. In addition, the Kindle brand was already extremely popular and trusted.

Amazon remained the only competition in this small Android tablet market for quite some time. However, Google’s introduction of the Nexus 7 changed everything. All of a sudden, Amazon found their beloved Kindle Fire competing against a tablet that had much higher specs, a full operating system, and the exact same price.

How did Amazon respond? They released the Kindle Fire HD which improved nearly every specification that was on the original Fire. However, none of the new specs were any better than what Google was already offering. The only major advantage to the Fire HD was the battery and audio output. Hence why Amazon had to take a new rout and offer a larger, 8.9″ tablet in addition to the already popular 7″ model.

Amazon’s Kindle Family

This was an odd move by Amazon, not in the introduction of a larger tablet, but in the pricing strategy. Starting at $299, Amazon’s 8.9″ Kindle Fire HD is still cheaper than the iPad, but the price goes significantly higher, topping out at over $600 for the highest end model. This certainly does not jive with the previous business models as it’s no longer an impulse buy. And given that Amazon uses a very restrictive operating system, it seems pretty illogical to spend a large amount of money without getting a full Android experience.

Software

Amazon’s take on software has been rather controversial. The Kindle Fire line uses the Android operating system and can run Android applications. However, Amazon has managed to achieve this by completely side-stepping Google. In fact, a person not familiar with the Android ecosystem could pick up a Kindle Fire and not even realize that the operating system is Android.

For starters, Amazon has created a heavily skinned version of Android 4.0 Ice Cream Sandwich. The reason is they want people to use this device exclusively for content. Multimedia consumption is forefront, whereas almost all productivity and multitasking takes a secondary role.

Amazon’s Kindle Interface

In addition, Amazon uses their own app store to distribute software to Kindle Fire users. While the apps that are sold are technically the same, they will be completely independent of your Google account. This is where open source software can either be fantastic or destructive depending on your point of view. Some may say that Amazon is taking full advantage of the great features of Android’s open source nature by adapting it to their needs and service capabilities. On the other hand, some people think they are reaping all of the benefits from the ecosystem Google has created without giving them any credit.

The Ecosystem’s Response

As with any major change in an ecosystem, other companies are bound to respond. Amazon literally created a new market when they were able to produce a high end device that sells for a budget price. As a result, the demand for high quality, inexpensive devices exploded. The rest of the Android manufacturers had to come up with something to fill the void in the newly created market.

Google

Google was the first company to truly challenge Amazon’s marketing strategy. While other manufacturers had indeed made smaller tablets similar to the Fire, Google was the first one to take a similar business approach. Google liked the idea of marketing a device based on content consumption. By releasing the Nexus 7, they began pushing their multiple Play Stores — Books, Music, Video and Apps — harder than they ever had before.

The reason Google was able to be so successful in this approach, was because they already had an expanding library of content. In reality, the only companies that can actually pull off a release of a content consumption device are those who personally maintain an expansive library. Google and Amazon had success with this business model because they are currently the top two content providers in the Android ecosystem.

Kindle Fire HD vs Nexus 7

Google’s Nexus 7 is currently one of the highest selling Android tablets ever released. That’s bad news for Amazon because it shows that consumers want a complete Android experience, not a watered down version. If other OEMs follow in Google’s path by producing fully-featured Android tablets at a low price, then Amazon’s altered interface is going to look more and more like an inconvenience.

Other OEMs

So where do the other manufacturers come into the mix? In all honesty it isn’t realistic for companies like Samsung, HTC, or Motorola to introduce content consumption devices. They do not provide content of their own and would be relying only on Google’s services, an uninspiring approach because people would be more apt to simply purchase a device straight from Google. However, that doesn’t mean they won’t indeed respond to Amazon in their own way.

Take Samsung for example. Since the growing popularity of devices like the Kindle Fire HD and the Nexus 7, Samsung has been attempting to find their own niche. With their expansion of the Galaxy Note line of devices, Samsung is reaching towards a specific “phablet” and tablet market. While the sizes and prices are vastly different from what Google and Amazon is doing, the Galaxy Notes offer a unique functionality that can’t be found even in high-end tablets.

Samsung’s Galaxy Note Family

Additionally, it is only logical to assume that other manufacturers will attempt to do the same. Motorola, LG, and even Sony will begin exploring the possibilities that can be achieved within a certain price point. I’m sure the types of devices will be quite different, but the overall goal will be the same. What’s currently unfolding is a demand for inexpensive devices and if manufacturers don’t comply, they will struggle to find some ground in this newly created market.

Conclusion

We are in the middle of a very interesting time for the Android ecosystem. It is during this period that we can reap all of the benefits from an open source software model. We are part of a community that is literally pushing out devices with every sort of physical dimension and software adaptation possible. Whether you think some companies are being too harsh with how they handle Google’s services, one thing remains very clear: this type of competition and market shift will do nothing but benefit consumers.


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