Way back in August, we wrote that October would likely prove to be a critical moment in the digital market and would give us a better idea of the relative positions of digital’s two biggest players, Amazon and Apple.
Well, it’s October. Amazon has announced its Kindle Fire and 3 new Kindle models, and Apple, after delaying its iPad 3 launch, has announced the iPhone 4S. How did the two digital titans do?
Some stock numbers: Following the Fire’s announcement, Amazon stock went up 3%; yesterday, immediately following the iPhone 4S’s announcement, Apple’s stock fell nearly 5% before largely recovering by the end of the day.
But because the stock market hasn’t exactly been a bastion of reliability recently, let’s take a look at expectations for the Fire and the iPhone 4S, keeping in mind that these two products aren’t competing against each other, but rather using each as a small indicator of its respective company’s position in the digital market.
The iPhone 4S had to weather a lot of not-so-nice comments yesterday, including this:
“It’s kind of unfortunate timing that the first post-Jobs product is not the most exciting in the world,” said Alex Spektor, a wireless analyst at Strategy Analytics, who called the new phone an “incremental” improvement over the iPhone 4. By choosing not to call the device the iPhone 5, he said, “Apple is admitting that it’s basically the same phone but with some souped-up specifications.”
“The iPhone 4S will surely be a blockbuster. Still, Apple is slipping. Last week, I raved about Microsoft’s new Windows Phone. Amazingly, Microsoft’s mobile OS looks simple and fresh compared with Apple’s and Google’s now aging mobile interfaces. Now that I’ve seen the new iPhone, I’ll reiterate my advice, which would’ve been unthinkable even a few months ago: Give Windows a shot. The iPhone is still the king, but there are now plenty of challengers to its throne.”
But some experts are taking the long view, and are far more optimistic:
“Our take is that Apple may be saving the iPhone 5 for a 4G iPhone launch in 2012 when the LTE networks around the world are more fully able to support a 4G device with scale. Essentially, the new name of the iPhone was a clear headline disappointment and led to a rush to judgment around the degree of improvement consumers will receive with the new phone, leading to a knee jerk reaction from the market on fears of a weak upgrade cycle. However, we believe this is nothing more than a superficial analysis and we believe the iPhone 4S should drive a healthy upgrade cycle for Apple. As such, we remain aggressive buyers of Apple stock at current levels.”
And some are asking everyone to look past the 4S’s lack of superficial upgrades and embrace its internal improvements:
“Despite the chilly reaction to the 4S, we believe the stock will like the iPhone 4S somewhat better as time goes on. Based on the new specs, we see no reason why end-users will not upgrade their current iPhone – as we plan to do on/around October 12. Our surveys have consistently shown that speed, battery life, and user experience (s/w) are the parameters upon which the mobile phone industry primarily competes. The iPhone 4S should keep Apple at the head of the class in aggregate. Yes, the gap between iPhone and the competition has narrowed on some levels, but no product yet matches iPhone 4S in total.”
For Amazon’s Fire, the tablet has seen a lot of praise for its design and price, but it has also been criticized for its technical shortcomings when placed alongside the iPad, citing its smaller screen and lower storage space. Also looming are privacy concerns about the Kindle Fire’s Silk web browser, but the issue is not that Amazon isn’t providing “off-cloud” browsing (they are), the issue is that most users won’t read the terms and conditions and will have no idea their browsing information is being stored by Amazon in order to make the experience faster.
And here are some non-stock numbers: more than 250,000 Kindle Fires have already been pre-ordered since its announcement. Apple sold 300,000 iPads, including pre-orders, on their first day.
So, the iPhone 4S is meeting mixed reviews, at best. The Kindle Fire is taking a little bit of flak for its tech shortcomings, but so far it’s created substantial buzz in the digital world, perhaps more than we’ve seen since the iPad debuted. This comparison is nothing but attempting to speculate the fortunes of Amazon and Apple in the moment, using their banner products as barometers Kindle Fire and iPhone 4S as It’s too early to tell (the iPad 3 will have something to say about all this), and the Kindle Fire/iPhone 4S certainly won’t decide the fates of Amazon and Apple, but the last week seems to further favor Amazon.