Analyst Corner

Is the Amazon Kindle Fire The Ideal Retail Tablet?

Categories: Uncategorized

It’s the end of the world as we know it…It’s the end of the world as we know it….It’s the end of the world as we know it and..I’m not sure how I feel. (Sorry R.E.M., you bailed before I did.)

Yesterday’s announcement of the Kindle Fire, Amazon’s new multi-media tablet device priced at a low entry price of $199 just may be the ideal device for retail.

Yes, certainly this is a packaged device meant to show off all of the features of Amazon with quick links to the Amazon store, cloud, media, etc., opening up the opportunity for taking more wallet-share from general retail. And much will be written about this and already has.

But at that iPod Touch price point of $200, with a screen more than 2x the size, weighing less than a pound, the Kindle Fire is also the ideal tablet format for the associate to carry around at the store level. Oh, and did I mention the support for Adobe Flash, the technology used on the vast majority of retailer websites but eschewed by Apple? Flash is a BIG deal for retailers.

Tie down the game options and access to the market, and the device will be an ideal form factor and price point for many specialty stores, department stores, and restaurant servers. There has been great debate in every retailer regarding what the ideal size and platform should be for the associate mobile. The iPad is too big for many, the iPod Touch or phone screen too small. The Kindle Fire at 7 might be just right.

The device’s lack of a camera and microphone (they say it was left out for cost reasons and that might be true) actually makes the Kindle Fire even more compelling for retailers as it is less likely that their associates will want to walk off with it.

The missing camera and microphone might also have been them giving in to demands from Best Buy who is already threatened by being a show room for Amazon. Not having a camera makes applications like Red Laser and Amazon’s own application much more difficult to use at store level and without WAN access, the device seems harmless enough, at least as an instore threat. But we still find it odd that Best Buy is going to be selling a device that only makes their largest online competitor considerably stronger and offers a media streaming option that is comparable to the DVDs they offer for sale in the store. There must be more to this than we know right now. But I digress.

We contend that the iPad ushered in a new era for the retail store experience. The $500 price point of the iPad opened an entire category and the speed in which retailers are putting mobile devices into the hands of associates is astounding. This is the subject of our latest research study, Mobility – A Gutenberg Moment for Retail, A Threat to POS released this week.

Tablets and handhelds are becoming ubiquitous in certain segments of retail. They are starting out as a way to get managers out from the back office. The next level is associates having devices to better engage consumers and provide an enhanced customer experience. And the third level, is taking transactions from the devices. In the first couple of years, the net affect will be a lot more devices in the store. However, as retailers look to refresh their POS devices in subsequent years, many segments will choose to install fewer traditional POS.