Tag Archives: amazon

EU: Apple Is At The Head Of An E-Book ‘Cartel’!

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Did Apple conspire with major publishers to increase e-book prices? The European Commission has launched an antitrust probe of Apple and five publishers amid claims the industry was “terrified” by Amazon’s $9.99 e-book push. At the heart is Apple’s iBookstore and the tech giant’s “agency model” a California lawsuit charges inflated book prices.

The EC earlier tossed the European offices of Harper Collins, Simon & Schuster, Macmillan, Penguin and other publishers under investigation. In a statement, European regulatory agency said it “has concerns, that these practices may breach EU antitrust rules that prohibit cartels and restrictive business practices.”

Seems many of those concerns stem from a last-minute deal Steve Jobs cut in order to get publishers onboard iBookstore, which launched in January 2010 and was largely overtaken by the iPad’s release. A class action lawsuit filed in California calls Jobs “a co-conspirator as terrified [as publishers] were over Amazon’s popularity and pricing structure.”

Not wanting to act alone to push up e-book prices, the publishers and Apple “solved this problem through coordinating between themselves (and Apple) to force Amazon to abandon its pro-consumer pricing,” claims the lawsuit filed by the Hagens Berman litigation group. The legal challenge describes the supposed cartel forcing “the discounting of eBook prices and uniformly raise prices on all first release fiction and nonfiction published” by the bookmakers.

The EC said there is no idea how long the probe will last.

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Apple May Build Another Huge Data Super Center, This Time In Oregon

Apple is expected to join Facebook's data center (above) in Prineville, Oregon. [Photo by Tom Raftery - http://flic.kr/p/9wzMH2)

Apple appears to be in the final stages of deciding to create a second data center. The tech giant is reportedly eyeing 160 acres in Prineville, Oregon for a 31-megawatt facility. The location would make Apple neighbors with Google, Amazon and Facebook, companies also locating data hubs in the Northwest state known for enticing tech firms with lucrative tax breaks.

The option to buy the land expires at the end of December, according to The Oregonian. The decision could hinge on whether the site will have enough electricity transmission and if local legislators can derail a state measure that could tax data centers.

Taxes could also possibly have played a critical role in Apple’s decision to locate its first large data center in North Carolina. The Cupertino, Calif. company received $46 million in state tax incentives along with $21 million in local incentives to locate its $1 billion site for iCloud, iTunes and other data-intensive services. Like in North Carolina, the Prineville, Ore. location is also offering property tax exemption that could save Apple at least “several million dollars,” according to The Oregonian.

North Carolina seems to be a prime location for data centers beyond Apple. Facebook and Google are also establishing data hubs for their cloud-based activities in the state.

While Apple’s growing list of data centers are adding to the tax rolls of local governments, the sites packed with computers and storage are not attracting many new long-term jobs. Although Facebook created 200 construction jobs to build its Prineville, Oregon data center, the site has employed just 55 Prineville residents, according to the report. Crook County, where Prineville is located, has a 15.8 percent unemployment rate, the highest in the state. Likewise, residents of Apple’s North Carolina data center recently told reporters few local jobs resulted from the tech firm coming to town.

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The Race is On: Kindle Fire Outsells 16GB iPad at Best Buy [Report]

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Here comes more evidence Amazon’s $199 Kindle Fire tablet is Apple’s first serious rival in a tablet war so far strewn with the corpses of the iPad’s Android-based victims. In the first skirmish between the two tablets, the Kindle Fire is outselling the 16GB iPad on Best Buy’s website.

At the website, the Kindle Fire sits atop the 16GB Apple tablet when consumers search for the best-selling units. However, Apple iPad remains No. 2, No. 3 and No. 5 out of the electronic giant’s top-five tablets. Still, after the Kindle Fire, Acer’s 8GB Iconia Tablet is the only other Android-based unit on the top-five, placing No. 4 on the Best Buy website.

Why is the Kindle Fire doing so well? Start with the Amazon device being newer than the iPad 2, which has been in the market for more than six months. Then there is the $199 price tag for the Kindle Fire versus $499 for the 16GB iPad 2. Perhaps the strongest selling point is one Apple has profited from already: a ready-made ecosphere where Amazon Fire tablet buyers can easily buy Amazon music, e-books, apps and cloud storage. This tightly-woven interface is unique for an Android device, attracting all of the Kindle e-reader owners, as well as consumers already using Amazon’s other services.

But should Apple be quaking in their boots about this new challenger? Hardly.

“We believe the iPad still stands out as the industry standard in terms of software integration,” writes Barclays analyst Ben Reitzes. Although the Kindle Fire is new, reviews are coming back and they are not all glowing. Other than the low price, reviewers focused on the Kindle Fire’s lack of camera, microphone, GPS, Bluetooth, calendar or even a note pad. Other reviews mentioned the animations on the Kindle Fire were not as slick as the iPad.

Beyond whether the iPad or the Kindle Fire is the top-selling tablet online at one retailer, the potentially more important point is how the Amazon device could change the market. Rather than the iPad swimming in a pool with dozens of tiny pirahnas, the new Android tablet could instead make it a two-way contest between two large sharks.

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iPad or Kindle Fire: Which should you buy?

Amazon’s first foray into the tablet market, the Kindle Fire, is widely perceived as the first real competitor to the iPad. Whether that’s true or not will be discussed later, but for shoppers looking to gift a tablet for the holidays, it can be hard to which is the better gift. That’s why we’re going to compare the two on four points: hardware, software, ecosystem, and price.


The hardware on the Kindle Fire is simple. It’s a half-inch thick slab of black plastic with a rubber back. The feel of the Fire is actually pretty nice considering the materials, and the rubber back makes it easy to grip. It’s not nearly as pretty as the iPad, of course, but its cheaper looks comes with advantages; if I were to drop the Fire, I wouldn’t be as concerned about damaging it.

There are several odd choices Amazon made in the design. First, in portrait orientation the bezel on the bottom of the Fire is actually thicker than on the top, making it asymmetrical. Second, there aren’t any hardware volume controls; you have to use a software slider. Third, the power button and audio jack are on the bottom, making it easier to accidentally turn off and making listening to headphones harder.

One of the big draws of the Fire over the iPad is its seven-inch screen. I can easily wrap my entire hand around the Fire, which I can’t do with the iPad. The smaller form factor also has the advantage of portability; you could easily fit the Fire in a purse or small bag, unlike the iPad. The downside, of course, is that the iPad offers a bigger screen for watching movies or playing games.

The iPad has two cameras, one on the back, and another on the front for FaceTime. The Fire has none. This omission makes sense, both to cut costs, and because most people probably already have a smartphone with a better camera than what Amazon could’ve put in the Fire anyway. But it also means that the Fire can’t do video chat like the iPad.

There’s only 8 GB of space included on the Fire, half of what the cheapest iPad has, and the Fire has no SD card slot to expand that storage. Amazon obviously expects most users to access their media from Amazon’s cloud. It’s a problem for folks with lots of locally-stored media and less purchased through Amazon.


More than anything, the software is what sets the Fire and the iPad apart. The Fire’s home screen is a dark faux-wood bookshelf; a search box is fixed on the top, and a list of media categories is spread out underneath it. Below that, recently used items appear on a “carousel” and take up most of the bookshelf, with the rest reserved for a scrollable “favorites” area, where you can pin apps, books, magazines, websites, videos, and even music. The interface is all about getting to your media quickly; rather than tapping on an app and then drilling down to the media you want, à la iPad, you can just click on the media itself. It’s an interesting concept, and it works well.

Amazon made several odd design choices with the software, as with the hardware. One of the first things I noticed is that the text in the top bar isn’t centered. Another is the distracting, persistent black bar which brings up the navigation buttons when video is being played in the Netflix app. In addition, the Fire’s software is buggy. Not show-stoppingly so, but enough to annoy. These kind of things show an inattention to detail and polish that iOS doesn’t suffer from.

The main navigation buttons on the Fire.

While the Fire runs a heavily modified build of Android 2.3, you can still feel Android when you’re using it, in the jerky scrolling, in the ever-present software Back, Home and Menu buttons, and in the slightly modified notification drawer. The Fire isn’t for people who can’t stand Android.

The browser on the Fire, called Silk, has a feature that’s supposed to accelerate page loading: Popular pages are monitored by Amazon and cached on their servers, so when you browse to one of those sites, it loads faster. The problem is that the service doesn’t seem to work well; Vimeo user Sencha did a video comparison of the Fire’s browser with acceleration turned on and off, and the results showed that Silk doesn’t make much of a difference. For now, the iPad’s browser is just as fast as the Fire’s, but Amazon will likely improve Silk in the future.

The Fire's text-slection tool in action.

Reading on the Fire is a no-frills affair; Amazon simply tweaked the Android Kindle app and put it on the Fire. The page turn animation is a boring slide, which isn’t as nice as iBooks’ realistic animation. Even the iOS Kindle app has an option for realistic animations, so I don’t understand why Amazon excluded them on the Fire.


The Fire is heavily integrated with Amazon’s content ecosystem, as is the iPad with Apple’s. It’s worth pointing out that Amazon develops apps for iOS, most notably Kindle and Amazon Mobile. Apple isn’t likely ever going to do the same for the Fire.


Amazon’s selection of books is as excellent as ever, and while Apple has greatly improved the selection in the iBookstore, it still can’t approach the Amazon store. The prices of Amazon’s e-books also tend to be cheaper. Amazon Prime customers get an extra perk: one free book every week. If your taste in books is broad, that’s a pretty good deal.


Amazon’s video offerings are pretty competitive with iTunes. Movies can be rented in standard definition for 48 hours at around $4, or bought at around $15, depending on if it can be bought. TV shows are $2 a pop. The video quality is about what you’d expect from a stream: watchable, but not great. Since iTunes only allows media to be downloaded, the quality is better, but with the caveat that you have to wait for the download to finish. Prime customers can get some of Amazon’s video content for free, with popular inclusions such as Lost, Firefly, and The Girl With The Dragon Tattoo.

Music can either be streamed using Amazon’s free Cloud Player service, bought directly on the Fire, or transferred via USB. The price of music in Amazon’s store is also competitive with iTunes. The Cloud Player service allows you to upload up to 5 GB of music for free, which automatically shows up on the Fire. The songs buffer quickly, and the audio quality is the same as the uploaded file, which are both nice.


The app ecosystem is the biggest pain point with the Fire. It doesn’t have anything near the quality and selection of the iOS App Store. Most of the apps were designed to run on Android phones, so they get resized to fill the Fire’s bigger screen. Even worse, the Facebook and Twitter apps aren’t apps at all, but just links to the mobile websites.

Developers have been slow to submit their apps to Amazon’s Appstore, so Amazon’s making a bet on the Fire bringing more of them into the fold. But right now, there’s no guarantee that it’ll get better. One bright spot is that the Appstore offers one free app every week, even to non-Prime customers, but that’s little consolation.


My dad summed this up nicely: “If the iPad were $200, I’d have an iPad. But it’s not.” Price is arguably the biggest feature of the Fire; it’s $300 less than the cheapest iPad, so someone could buy two-and-a-half Fires for the price of one iPad, something consumers should keep in mind if they want multiple tablets this year. Even so, with the iPad the adage “you get what you pay for” holds true; the iPad has more polish, better design, and more power than the Fire.


The Kindle Fire isn’t an iPad competitor. It’s a multimedia Kindle that’s tightly integrated with Amazon’s services. While integration with Apple’s services is certainly a big part of the iPad, it’s not its main purpose, which is to run apps. You can see this distinction in how the two tablets and their software are designed. The iPad has a bigger screen so that apps have more room to shine, and iOS at its fundamental level is a grid-based app launcher. The Fire is smaller, so it’s easier to enjoy media like books, and the software is designed for launching media. In short, the iPad is for apps; the Fire is for media, and media mostly sourced from a particular ecosystem.

There’s more, of course. To sum it up, the Fire appeals to people who:

  • Buy most of their content from Amazon.
  • Don’t need to create media.
  • Want a more portable tablet.
  • Can’t afford to spend a lot of money.
  • Don’t mind limited storage.

And the iPad appeals to people who:

  • Buy most of their content from Apple.
  • Want to create media as well as consume it.
  • Don’t mind the iPad’s larger size.
  • Can afford to spend a little more.
  • Need a lot of storage.

Which features of each tablet mean more to you? That’s how you decide.

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Steve Jobs Would Probably Have Hated This E-Book Republishing His Mails To Customers

Over the years, Steve wrote hundreds of mostly terse, often funny, irritable or persnickety emails to Apple customers who wrote him at (sorry, you need Javascript to see this e-mail address). Now a whole book of them is being published.

The book is called Letters to Steve: Inside The E-Mail Inbox of Apple’s Steve Jobs and it is exclusively available as a Kindle e-book. It costs $2.99.

Here’s the official description:

This book is based on interviews with many of the customers and fans Jobs communicated with. These tales reveal the intricacies of how Jobs portrayed himself as likable and accessible through direct interaction with fans. He handled customer-service inquiries himself and carefully revealed hints about upcoming Apple products, guaranteeing headlines on blogs. However, some of these letters, when analyzed, provide a glimpse into his “reality distortion field,” in which he lobs insults, bends the truth and uses misdirection in order to manipulate anyone on the receiving end.

The initial Amazon reviews aren’t exactly positive, and I’m not entirely sure about this concept myself. Steve’s emails were often as short as a sentence, maybe even a few words. I’m not sure how much insight into the “reality distortion field” a book like this could even provide. Then there’s the whole question of what Steve would have thought of it, and the answer there is he thought people republishing his emails was rude. This wouldn’t exactly have gotten his stamp of approval.

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What Apple needs to maintain control of the tablet market

Apple’s iPad makes up 65 percent of customer demand for tablets, according to a new ChangeWave survey that shows interest in tablets overall up 130 percent. But for the first time, another single competitor has emerged to catch a very healthy percentage of shoppers’ attention: the Kindle Fire.

Amazon’s tablet was the device of choice for 22 percent of the 3,043 customers polled by ChangeWave for its latest survey. The next closest device was Samsung’s Galaxy Tab, with just 4 percent of those surveyed expressing a desire to pick up that product. The Kindle Fire’s emergence as a strong second to Apple’s iPad is mostly bad news for other Android-based competitors, and less of an issue for Apple, which currently enjoys around 67-percent market share, but that doesn’t mean it should quietly allow the Fire to dig itself in as the budget-conscious shopper’s tablet of choice.

How Apple can put out the Fire

The easy answer, of course, is to make a cheap iPad, but that’s not something Apple will do easily or without a very specific, measured approach. Apple’s brand cachet and success depend on consumer perception of its products as high quality; just pulling things out until a smaller iPad resembles a Fire in terms of specs but runs iOS isn’t likely an option. That said, Apple also isn’t afraid to take a good idea from the competition and make it better in order to move hardware. That’s what I think it’ll do in this case.

Take away the huge price gap

Amazon’s Fire is really appealing because it provides cheap access to content acquired and stored in Amazon’s extensive ecosystem of music and movies, and its growing AppStore. The hardware is really secondary to those considerations, and likely accounts for why Amazon is willing to sell it so cheaply.

If Apple wants to regain its absolute dominance of the tablet market, it needs to take price off the table, but also to avoid setting itself up for the kind of criticism Amazon and other low-cost tablet makers face because of corner-cutting. It’s a tricky balance to strike, but Apple has a lot of advantages that could make it possible, chief among them being Tim Cook and his masterful control of the component supply chain. And Apple doesn’t need to close the gap entirely. It needs to bring an iPad close enough that the Kindle Fire’s faults seem like unwarranted sacrifices for what you save.

Apple can go cheap with few sacrifices

Amazon is taking a big risk on a relatively unproven market (7-inch tablets), and in doing so, it probably can’t achieve the parts-ordering volumes Apple could manage. That should allow Apple to eke out more profit per device even at a much-reduced price point. Apple is also making great strides in achieving big price breaks by leveraging older hardware; the free (on contract) 3GS is a great example. A smaller iPad would automatically save on display costs, and Apple can also save money using the older A4 processor (or an A5 if it debuts alongside a next-gen A6 for the existing iPad).

It will likely be difficult for Apple to get Kindle-Fire-cheap with a product it can stand behind, but the entry-level iPod touch recently hit the same $199 mark, and a similarly specced, slightly larger device at $249 (same price as the Nook Tablet) or $299 isn’t too much of a stretch to imagine. It would likely mean the death of the iPod touch in terms of cannibalized sales, but Apple is famously willing to release forward-looking products even if they might hurt past top producers.

Ecosystem plus

Apple’s content ecosystem can go toe-to-toe with Amazon’s, especially in international markets where lots of Amazon’s content isn’t available. ICloud and access to past iTunes purchases help make the differences between the two minimal, and despite Amazon’s big advantages with books, Apple still wins in terms of digital movie and music sales. If a smaller, cheaper iPad can provide access to that content, with fewer hardware/software downsides, it’ll win over customers, even with a price disadvantage.

Apple also still has a huge app advantage. That, plus value-add features like AirPlay, iMessage and other things iOS provides that the competition currently doesn’t, will be enough to win back Apple customers just looking for a quality 7-incher to fill out their gadget lineup. In terms of the early adopter crowd, that alone could pay big dividends.


Apple has the elements of a low-end market play in place: the pedigree of the iPod touch, its recent willingness to target mid-market by leveraging older tech, the lessons and supply chain control it has amassed in making the iPad a huge success, and the market-leading content ecosystem that continues to drive and be driven by its hardware device purchases.

Amazon’s ability to win out over other Android devices and take a big chunk of tablet interest by undercutting Apple on price might not even bother Cupertino. If it can’t work out how to make a competing device with a reasonable profit margin, it won’t bother. But if it can, that’s when we’ll see the real sparks fly in the tablet mark

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Kindle Fire Becomes The Second Biggest Tablet, But iPad Has Nothing To Worry About… Yet.

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Described as an “explosive development in the tablet market,” the holiday season could finally see a two-way race for consumers’ attention as the iPad and Amazon’s Kindle Fire vie for nearly 90 percent of sales. In a survey of North Americans intending to buy a tablet, 65 percent said they plan to buy an iPad, while 22 percent said they would pick the Kindle Fire, according to ChangeWave Research results released Monday. Those percentages may look disparate, but the Kindle Fire is still proving to be a shot across the bow of iPad… and it could soon become a full broadside.

For the first time, a tablet powered by Google’s Android operating system reached double-digit consumer popularity. After the Kindle Fire, the Samsung Galaxy Tab registered a distant third-place with just 4 percent of the ChangeWave survey participants. The strong showing by the Kindle Fire is “a shot across the bow at Apple,” according to the research firm.

The Kindle Fire could actually hit its target early next year. An 8.9-inch Amazon device reportedly will begin production during the second quarter of 2012 as Foxconn — which produces Apple’s iPad and iPhone — becomes the second supplier churning out the Kindle Fire.

But that warning shot may be more a threat to fellow Android tablet manufacturers, the majority of which remain in the cellar with no more than 1 percent of tablet demand in North America. Indeed, the researchers term their finding “a silver lining for Apple, by damaging the tablet market hopes of the remaining competitors in the field.”

Apple “continues to show enormous strength in the tablet market,” ChangeWave announces. Some 74 percent of iPad owners report they are “very satisfied” with the device compared to 49 percent for all other tablet makers combined. Some had questioned whether the Kindle Fire’s introduction could hurt iPad demand. Earlier this month, ChangeWave had reported 26 percent of initial consumers buying the Kindle Fire said they would delay getting an iPad.

In the end, however, the strongest Android tablet could actually turn fellow non-iPad devices into discount devices after the holidays. Starting in January 2012, “several waves of price cuts” are expected as the $199 Kindle Fire and the $99 Barnes & Noble Nook control the market for less-expensive tablets. As for Apple, a third-generation iPad is expected to be unveiled around March 2012, a device believed to be even more impressive than its predecessors, boasting a new, high-density Retina Display.

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