Amazon’s Echo Chamber, Redux (Or What Happens When Pundits Don’t Understand Consumers)

Many_Tablets1A post on Amazon crossed my desk today, and have to take issue with it. It was written by Dustin Curtis of Svbtle, and while it is a good read I think it also shows that Curtis doesn't understand consumers.

Curtis takes issue with Amazon's hardware strategy, and starts his argument with:

I used to give Amazon’s consumer hardware strategy the benefit of the doubt. I liked the original e-ink Kindles, even though they were made out of cheap plastic. I kind of understood the first Kindle Fire tablet, even though it was a piece of junk. But as Amazon has released more and more pieces of junk over the past couple of years, I’ve lost faith. The Fire Phone, for example, is not just bad; it’s so terrible that it’s dishonest of Amazon to sell it to anyone.

Even Amazon has said that the Fire Phone is a flop, so there's no disagreement there, but Curtis believes that Amazon's entire hardware strategy is a flop. Claiming that " Amazon continues to make hardware because it doesn't know that it sucks", Curtis describes the life cycle of Amazon's product thusly:

They make a product, they market the product on Amazon.com, they sell the product to Amazon.com customers, they get a false sense of success, the customer puts the product in a drawer and never uses it, and then Amazon moves on to the next product.

I don't claim to fully understand why consumers choose the gadgets they buy, but based on my observations I don't think Curtis can make the claim that Amazon gadgets are bought and soon abandoned - not without actual data to back it up.

Over the past few months, old hardware has come up as a topic of discussion on this blog that I have come to doubt my standards for what qualifies as a usable device.

  • When the Kindle Voyage launched, one Kindle 2 user called my on my complaints about the Voyage's high price (and he was right to do so, and witty). Several commenters were still using that 5 year old Kindle.
  • Last fall I briefly owned a quad-copter, before selling it to a guy who went on to use it with his original Kindle Fire.
  • Speaking of which, my mother was happy to use an original Kindle Fire - right up until it died. She then upgraded to my Kindle Fire HD, which we both liked.

And it's not just Amazon hardware that is used more than pundits would expect. I've lost count of the times that I've recommended one device over another and had owners of the lesser device show up in the comment section and defend it.

What's more, in the past week I have fielded tech support questions for a 2010-era original black Pandigital Novel tablet and for a 2011-era Panimage tablet. In June I helped someone troubleshoot an original white Pandigital Novel tablet - which he was still using four years after it launched.

I can't tell you what percentage of the cheaper tablets are discarded by dissatisfied consumers, but I wouldn't be so cavalier and dismiss them all so quickly.

Just so we're clear, I'm not listing these examples to show that these consumers don't know that they're using junk; if the consumers are happy then the hardware is by definition not junk. My point is that Curtis's standards for defining this hardware as junk, as well as the standards which I have recently thrown out, are simply wrong.

So far as I can tell, he's using a design aesthetic which does not match up with what consumers actually think about the products they use on a daily basis.

And since it's clear that Curtis is fundamentally wrong on his understanding of consumers, I don't trust his later arguments either:

The media strategy that seems to be driving Jeff Bezos to make mobile consumption devices (with Amazon’s media stores and Prime video/music) is flawed. No one makes money selling media for consumption anymore. That market is quickly and brutally dying.

If there's no money to be made in selling media then how did Netflix make $71 million in profit in the second quarter?

I don't have the data to prove Curtis wrong when it comes to Amazon, but for the sake of an argument I am going to  apply Tyrion's Razor*.

It's safe to assume that Amazon has internal data on how the Fire tablets are used. They don't share it, but they have that data to show how often a Fire tablet owner buys stuff at Amazon. I am betting that this data is what led Amazon to release 4 iterations of Android tablets.

No, I can't prove it, but I think it is safer to assume that Amazon is basing their product decisions on that data than to assume that they made the same mistake 4 times in a row.

Thoughts?

P.S. Tyrion's Razor is a term I coined earlier this year which is basically a corollary to Hanlin’s Razor. Rather than assuming the cause of an action to be  stupidity,Tyrion's Razor states that one should never attribute an action to stupidity which might be explained by asymmetrical information. (In other words people aren't as stupid as we might assume; they’re just working from different data.)

About Nate Hoffelder (11587 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

23 Comments on Amazon’s Echo Chamber, Redux (Or What Happens When Pundits Don’t Understand Consumers)

  1. As maybe the only reader of your site to own a Fire Phone, it’s not a piece of junk. It is the best 99 cents I ever spent . I would not have bought it for two hundred dollars but I really enjoy the phone.

  2. Although not my cup of tea, my wife uses both her kindle Fire and Fire HD daily with no complaints. Having a personal prefence does not make them junk.

  3. I’ve always been a diehard Apple and iPad fan, but I recently got a Kindle Paperwhite (last years model on sale for under $100) and I love it.

    Battery life and screen/size are just terrific for reading, even thought I have a pile of iPad’s sitting nearby (and better used for games and email). I use it every day.

    I never really checked out the old Kindles much, but I think the darker screens wouldn’t have worked for me. Seems like Amazon got it right with this version. So, this is what I think their strategy is:

    1. Jump into new markets as quickly as possible. Sell stuff really cheap and just get it out there to see what flies. (Nothing wrong with that. Some people love cheap gadgets and understand they might not be perfect, but they are fun to play with anyway.)

    2. Refine the stuff that is working, abandon the stuff that doesn’t.

    3. Eventually, the technology curve of cheap/good enough will allow you to directly compete with even the biggest players. Especially since you’ve had years to refine your stuff.

    As tablets, or phones, or whatever, get better an better all the way around, Amazon can make cheap ones that are “good enough” while still being cheaper. Given they have the money and resources, it seems to make sense, particularly so they don’t miss out on the next big thing.

    Now, this is the opposite of Apple’s strategy, which is not to get stuff out too early and (usually) to wait until they can release something really polished and ready. They’re willing to enter a market later. And they care more about design and polish. But… they are also almost always more expensive.

    Seems there’s room for both approaches.

  4. I’ve had my crappy $79 basic Kindle since 2011 and use it every day. It wouldn’t know what the inside of a drawer looked like.

  5. Out in the real world, most people keep on using hardware until it breaks. That some newer, shinier toy might be out there is not going to make them spend money. Just look at all the people still running Windows XP or repurposing old Pentiums as linux boxes.
    If you pay attention on the enthusiast sites you will find people perfectly happy with 4-5 year old devices as well as others who regularly update by selling their older hardware…to people perfectly happy to get it.
    Not everybody can afford to spend hundreds of dollars getting the latest toys every single year and even among those that can, many if not most refuse to do so.

    Now, as go Amazon hardware, it is crass and inaccurate revisionisn to pretend Amazon hardward is cheap junk. Anybody can dig up online reviews of their various devices and find proof that not a single one was seen at launch as anything other than a solid, competitive product both feature and pricewise.

    Whether it be the frumpy Kindle 1 or the sleek state of the art Voyage, Amazon has always priced their hardware comparably to their primary competitor; Sony in 2007, Kobo today.

    When the FireTV came out, they priced it to match Apple TV not the no-name cheapies.
    And the Echo is priced to match other premium bluetooth speakers, not the China inc portables.

    http://www.amazon.com/s/ref=sr_nr_p_36_3?rh=n%3A172282%2Cn%3A%21493964%2Cn%3A172623%2Cn%3A172630%2Cn%3A290438%2Cn%3A689637011%2Cn%3A7073956011%2Cp_36%3A1253506011&bbn=7073956011&sort=price-desc-rank&ie=UTF8&qid=1415378252&rnid=386442011

    Cheap, their toys aren’t. And they wouldn’t be selling by the million, year after year if they were.
    And as for selling to their customers, who else can they sell to?
    At one time or another 250m people have bought from them and 50M buy often enough to make Prime worth the subscription fee.

  6. I love this comment in the article: “If you want to sell hardware, you have to be in fashion, like Samsung was two years ago, or like Apple has always been. Amazon is incapable of understanding fashion, because it has no taste, and its hardware is completely unfashionable and tasteless.”

    Really?

    Apple has always been fashionable, and usually has about a 10 percent market share. It’s currently higher for smartphones and tablets, but their share is shrinking rapidly. Most people don’t buy tech because of fashion, they want functionality and low prices. The last time I bought a computer, I did so sight unseen. My old laptop had croaked, so I checked all the ads, found the best price for the minimum hardware I needed, and ordered it. My only interest was if it could do what I needed, and until I unboxed it, I didn’t even know what color it was.

    Being fashionable gets you attention from tech bloggers, it doesn’t sell a lot of products.

  7. The view that Amazon’s devices are just a means to sell digital media is too narrow. Their devices are intended to sell Prime with digital media on the side. And Prime is intended to sell everything – digital content from Amazon, Amazon devices, and most importantly, physical goods from Amazon’s store. Prime is at the heart of everything. Their devices promote Prime heavily through all the content you could access for free if you subscribe. Any time you use Amazon’s video, books, and music, you see advantages to subscribing to Prime (Prime streaming video, Prime Music, Kindle Lending Library).

    If I quit Prime, I wouldn’t shop at Amazon as much. Amazon’s free super-saver shipping is extremely slow. They wait forever to ship those items. I can do better shopping at Target, using my Target card, getting 5% off, and getting free shipping with the Target card. But because I have Prime, I make those purchases at Amazon and get free 2-day shipping. If I did not have Prime, I would shop elsewhere much more often. Prime memberships sell more physical goods.

    That is the heart of the equation, but it works all ways. Their devices sell their products. Their devices sell their content. Their devices sell Prime memberships. Their content sells their devices. Their content also sells Prime memberships. Prime memberships sell more physical goods. Prime memberships sell digital content. Prime memberships sell devices. Their physical goods store sells Prime memberships.

    The key is that the sales pitch here is giving the customer what they want at low prices in a convenient manner that just works. Those who don’t want what Amazon is selling, don’t want their devices and will only see them as junk. Those who do want those products and services aren’t complaining about the devices that sell them. They have a huge fan base, in fact, in forums like kboards.

    The Fire Phone is a failure because it doesn’t speak to their customer base or to the top of the line device market. Their own customer base is made largely of price conscious shoppers who do not need a top of the line phone just to improve a shopping experience or to access their digital content. The tech gadget lovers don’t want a high-end device that is clearly designed to get you to shop at Amazon. They needed to come out with a phone that had appeal for the masses, not the tech elite.

    Curtis is right when he says “People buy hardware that fits into their lives.” What he fails to see is that Amazon hardware fits seamlessly into the lives of Amazon consumers – those who shop at Amazon, read Amazon books, listen to music acquired or stored by Amazon, watch shows/movies supplied by Amazon. Not everyone is a trendy image-setter. Some people just live their lives and want their entertainment to be simple and do what you need it to do, not to make a statement.

  8. I have 6 Kindle Fires (several of them the original version) and one eInk Kindle on our family account, plus my eInk Kindle on a separate account, and my daughter also has an eInk Kindle on her separate account. We all use them daily. I used my Kindle 2 daily for years before I upgraded because I wanted something smaller that had more space.

    I read most books on my eInk Kindle, it’s easier on my eyes, and read magazines and use apps on my Fire. I buy content every day, we’re also Prime members. Since we eat a specialized diet, I order very frequently from Amazon and we all use Prime via Rokus and PS3s. The only reason we don’t have Fire TV is because we’ve already had Rokus for several years and have no need of it. We had already gotten new Samsung Galaxy S4s a few months before the Fire Phone came out, so don’t need that either (also don’t like the lack of a microSD slot). I have requested an invite for the new Echo.

    I think Amazon has a better finger on the pulse of their customers than some pundit.

    • Geez, except for the special diet, I would have thought you were describing my situation exactly. The issue with the Fire Phone for me was that it was linked to AT&T which has no coverage where I live so I have to get Verizon phones.

  9. I still use my old Kindle Touch and it works just fine, despite being somewhat old (it’s from 2011, I believe). I just got a new cover for it earlier this month, a really nice one, too. Very comfortable in my hands.

    Admittedly, I have been thinking of upgrading to the Voyage, but I don’t really have the money for that right now and, as I said, my Touch still works without any major problems, so until it clunks out on me I’m sticking to it.

    Guess I’m like most people. I don’t upgrade my devices unless I absolutely have no other choice.

  10. I think there’s a huge gap between those of us who primarily use our devices as readers, and the average consumer.

  11. I completely agree with Vonda Z. Amazon, for better or worse, is highly integrated into my life: For reading, viewing, listening (music and audible.com), and purchasing everyday products. This, despite being a 25+-year user of Apple products.

    I still have my original 2011 Kindle G3 with wifi and use it almost daily. Its terrible ‘experimental’ web browser even came to the rescue last week when my iPhone couldn’t hold a signal. I use the iPhone kindle app to search, highlight, and annotate books and magazines, and often switch back to the original kindle for reading. When the original kindle dies, I will immediately replace it with another dedicated kindle with wifi.

  12. have 2 kindle e-readers and 3 fire tablets- a 7″ second generation, an 8.9″ hd and the 7″ hdx. bought the hd and hdx models refurbished from amazon. saved a little money and they come with the same one year warranty as a new device. all are used regularly for reading and watching video. also listen to music from time to time. each generation is a bit improved, but the only difference that matters to me is that the hd and hdx models can be listened to without earbuds/ headphones. am a prime member, but may not renew in the spring. the price is more than fair for the benefits, but have enough content without prime. in addition, read on my boost android moto g phone using the kindle application when out and about.
    apple products are very impressive, but for me personally, amazon devices are good enough.

  13. A lot of you are raging about your old Kindles, but thats what they are: old Kindles. Amazon saw ahead the curve there. But a phone, in a sturated market? Huh? What were they thinking. It has no unique selling point other than its Amazon. And people have long since bought into other brands–buy stuff and books from Amazon and read it on a Kindle, and get my phone from Apple/Samsung/whatever. The amazing thing is Amazon chanced its arm on what was such an obvious fail. They sure didnt read ahead of the curve on that. And they’re ereaders are starting to look less than innovative. Same old UI and no new fonts for you, one year!

    And now the Echo. If Amazon can knock them out for about…$75, all in, then maybe it’ll be a winner. But $200? Nah. They’re offering it at 100 bucks to prime users to test the water. I dont really understand what it doesm. Not a good sign. I predict the Echo will quietly vanish.

    • “A lot of you are raging about your old Kindles”

      raving, not raging

      Kindles “are starting to look less than innovative. Same old UI and no new fonts for you, one year”

      What’s wrong with sticking with a UI that works? I know a thing or two about interface design and the one on the Kindle isn’t bad. And as for the fonts, that is another example of something that the pundit (or rather the typography snobs) care about that users do not.

      the typography on the Voyage looks great, IMO.

  14. Curtis has obviously never visited Best Buy, where Amazon and the retailer have set up their own little kiosk. By the by, I got in on that $119 Kindle Fire HDX (7″) deal last week. Man, such a great little tablet for such low expense – we’ve been watching Alpha House in bed and ESPN in the kitchen. That it also does email, web browse, and give me a larger portal into the Amazon store than my iPhone is bonus. By the by, I trade my mom her half broken Simple Kindle (with physical buttons) for my 2nd gen Paperwhite since she reads more often. And I’m down for at least one Echo if not more – $99 is one many basic Bluetooth speakers go for. So these other functions are effective free and bonus.

  15. I have had my Kindle Fire HD for 2 years and I love it and use it everyday. I am planning on buying my mom & daughter new Kindle HDs for Christmas. I am waiting for my Echo invite to buy mine for $99. I stay with Amazon due to the ease of service, convenience and great customer service.

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