Jeff Bezos said this at the Kindle Fire event last week:

"We want to make money when people use our devices, not when they buy our devices."

The concern I have with that statement is that if Apple comes out with a iPad mini, I don't think people will be using those devices for much longer (at least the 7-inch tablets). And in the long run, it could mean that people are less likely to buy Amazon's services like books, music, and movies.

Thoughts?

Your forgetting what Gruber mentionned earlier today: "heads we win, tails you lose."

Consumer prefers a competing product? Fine by Amazon, here's a free app that gives you access to all our content anyway.

Besides, if you're already knee deep in Amazon's ecosystem - say a prime subscriber, the Kindle Fire is a compelling device on its own.

I think Gruber's post and my last show cover this fairly well. Amazon's content is a revenue source for them but also a differentiating factor for the product. Even if Apple sells the iPad Mini at a price competitive w/ the KF they are still offering a somewhat differentiated product.

More interesting to me is the different mix of incentives at work between the two companies. Siracusa mentioned X-Ray as a tech apple could've made, but would they? I think a company focused on search and recommendations is more inclined to see X-Ray as valuable than one focused on HW. In the long run, differences in corporate DNA matter. Not (well, not usually, c.f. RIM) release timing.

See: heavy heavy emphasis on recomendations everywhere on the Kindle OS.

Is that really the case though? Sure they don't mind selling through Apple, but they obviously would prefer if people were buying that content on their Kindle. If Apple made a competitively priced iPad mini, would people really buy 7-inch Kindle Fires? I don't think so.

How less likely is it that people would keep buying books, music, and movies from Amazon through the iPad? In the long run, if Amazon is in the business of selling services, don't they need to sell devices to get people to use those services?

Like, how many real everyday people are going to go and download the Google Maps app (when it comes out) when Apple has their own maps built in?

>If Apple made a competitively priced iPad mini, would people really buy 7-inch Kindle Fires? I don't think so.

That's a testable proposition. I suspect you're wrong. But we'll find out either way.

I think some people would buy Kindle Fires, but I think a lot of people would be swayed to buy an iPad. And by a lot, I think most.

Then we're back at Amazon grabbing a large but minority share of the tablet market, which given the margins they have on these tablets is probably fine for them in the short term.

I don't believe that Amazon's ability to sell stuff is dependent on selling its own devices. People will keep shopping there in big enough numbers no matter. Rather, the kindles act (or amazon hopes they do) as a vice on consumers and competing content sources by either locking down consumers already bought into the amazon ecosystem (now lets pump them full of recommendation) and presenting itself as a hardware alternative that can either erode a competitors ability to lock customers into their ecosystems or simply block them out(try buying anything from anyone else on those kindles).

You can probably bet that Amzn being in the game is certainly a factor for everyone in the negotiation rooms.

Worth noting: I can get a 9 inch kindle fire for the same price as an iPod Touch.

amazon.com