Already a hit with consumers, the Kindle Fire has become a mobile profit center for Amazon. Now as Apple is readying the latest version of its own handheld devices next week, Amazon hopes to turn the Kindle into an even bigger player for Hollywood as a platform for entertainment fare.
“We want to make money when people use our devices, not when people buy our devices,” said Amazon founder and CEO Jeff Bezos on Thursday while introducing upgrades to the company’s popular line of Kindle tablets in a presser at Santa Monica Airport’s Barker Hangar.
In doing so, Amazon clearly threw down the gauntlet as it looks to take a bigger piece of the tablet market away from Apple, unveiling sleeker, more advanced versions of its Kindle Fire, a pricier HD version and the Kindle Paperwhite e-book reader.
Bezos sees the tablets as instrumental in helping Amazon sell more books, movies, TV shows, games and music. And that should be music to Hollywood’s ears as studios look to boost digital sales of their content with more consumers accessing entertainment on mobile devices.
The Kindle Fire, which bowed last September, quickly caught on with consumers and now claims 22% of the tablet market. Bezos believes a lower price point on the devices and screens with higher resolution will find their way into even more hands, especially as their rollout is timed before the holiday shopping season.
In addition to the improved tech specs — more memory, faster processors, longer battery life, Dolby sound, dual Wi-Fi antennas — and software that better integrates companies Amazon owns, like IMDB and audio book firm Audible, to cleverly encourage the consumption of more content.
An IMDB-developed “X-Ray for Movies” overlay, for example, provides information on actors when a movie is paused, but also lists other films they’ve appeared in, allowing the pics to be added to a user’s watchlist.
Naturally, that watchlist connects to Amazon’s Prime Instant Video service, which for $79 a year enables members to stream video. But the list of additional movies could also result in the rental or purchase of pics, adding up over time for the studios.
Introduction of “X-Ray” comes as Amazon last week added Epix’s library of films from Lionsgate, MGM and Paramount to Prime, as part of a multi-year deal after the exclusive window on Epix’s pact with Netflix ended. Deal with Epix more than doubles the number of titles available on the Kindle Fire.
And that’s the point: Amazon is hoping the addition of more films to its library will make the Kindle Fire more attractive to consumers who are considering Apple’s iPad — and Google’s new Nexus 7 introduced this week– but also enable Prime to better compete with Netflix, iTunes and Google Play.
Bezos used Lionsgate’s “The Hunger Games” to demonstrate the video quality of films playing on the Kindle Fire HD during his presentation, taking advantage of the Epix deal.
In a new TV spot, conveying what Bezos calls the “spirit” of Amazon, the company called the Kindle its “four-minute mile.” To grow its Kindle biz, Bezos called hardware a critical part of the service. But “invention does not stop with the hardware,” he said.
“People don’t want gadgets anymore,” Bezos said. “They want services. Services that improve.”
That should provide Hollywood with reason to improve their digital distribution businesses, as well.
Bezos turned to Activision’s hit “Skylanders” kids game in a demo that to illustrate how the publisher developed a Kindle Fire-specific version of the title that enables users to easily purchase action figures through Amazon without leaving the game.
Skype and Facebook also created custom apps for the new Kindles.
“Sometimes you invent for customers, sometimes you invent for yourself,” said Bezos who has four kids. “Kids love screens.”
To help parents, Amazon will launch Kindle FreeTime that sets time limits for usage of different apps like games, TV and movies.
On the higher end, the Kindle Fire HD comes with 7- and 8.9-inch displays, with pricing starting at $199 when the smaller device ships Sept. 15. Larger model follows Nov. 20.
Moving up to HD required Amazon to beef up the technology inside its tablet, given that content — whether it’s a magazine or a movie — forces file sizes to be larger than their standard-definition versions. Storage starts at 16 GB.
But Amazon also added dual stereo speakers and Dolby Digital Plus, making the Kindle Fire HD the first tablet to offer the improved sound feature. Device will also boast two antennas and utilize 2.4 Ghz and 5GHz bands for improved Wi-Fi connections. The dual antennas will enable the Kindle Fire HD to offer a 41% faster Wi-Fi connection than Apple’s current iPad.
Amazon will also sell a $499 model that will include 4G LTE wireless connectivity.
The Kindle Fire, reduced to $159 from $199, also is getting an upgrade with new hardware. It’s now 40% faster and includes longer battery life.
Bezos stressed that Amazon wanted to offer “the best tablet at any price” during his presentation.
Amazon also unveiled a thinner, lighter Kindle e-book reader featuring an improved brighter and easier-to-read display with technology it calls Paperwhite.
The Kindle Paperwhite handheld, whose price starts at $119, is thinner than a magazine and lighter than a paperback. Battery life is said to last eight weeks. The Paperwhite technology took four years to develop, Bezos said, and added 62% more pixels and increased contrast by 25%. Its smallest Kindle with improved fonts and 15% faster page turns now starts at $69.