When I show you products like that, with those hardware features, it creates an elephant in the room. This elephant goes by the name of How Are These Prices Possible?
That was Amazon CEO Jeff Bezos at the company's Kindle unveiling in Santa Monica, California last Thursday. He was talking about the new Kindle Fire HD, which is available in a 7″ version for $199 and an 8.9″ one for $299. Both models are rather well-equipped for the price.
Bezos went on to explain that Amazon wants to make money when customers use its products, not when they buy them. Which is another way of saying that it needs to sell plenty of content to people who purchase the Kindle Fire HD.
But for some reason he didn't mention a highly relevant fact: The new models place ads for Amazon offerings and other stuff on their lockscreens and promote related products when you browse through your content libraries. It really wants you to know about other things you might want to buy, every time you use your Kindle HD.
With its Kindle e-readers, Amazon has offered cheaper “Special Offers” versions for a while. With the new Kindle Fires, however, the advertising is standard. And perhaps in part because the Amazon event didn't address this, the discovery led to a flurry of confusion. Some blogs reported that Amazon was saying you could pay it a fee to disable the lockscreen ads. Others said the exact opposite.
It all seemed like an unforced error in an otherwise well-done launch event. (Remarkably, Bezos did the entire presentation himself — demos and all.)
Give Amazon credit, though: It moved quickly to deal with the kerfuffle. On Saturday evening, it announced that it'll let Fire HD buyers disable the Special Offers ads for a one-time $15 fee. (I'm not sure whether there's any way to get rid of the related-product suggestions; I'm checking in with Amazon.)
The company says that very few of the people who have bought its previous Kindles with Special Offers have chosen to opt out. That doesn't startle me. But in the past, you knew you were getting a discount on the device price in exchange for viewing the Special Offers. Presumably, most advertising-phobic folks chose to buy the full-price Kindles in the first place.
The 7″ Kindle Fire HD doesn't ship until September 14, and the 8.9″ model won't show up until November 20. Even with the $15 surcharge to nuke the ads, both have prices which are likely to reshape the entire tablet market. Kudos to Amazon for apparently tamping down a possible PR crisis before it actually impacted any customers.