Amazon's Kindle Fire Has Business Potential

NEWS ANALYSIS: Amazon's Kindle Fire may be first and foremost a consumer device, but the retailer has shown a willingness to explore new niches before.

Initial reviews of Amazon's Kindle Fire have focused on the tablet's consumer appeal, and no wonder: with a user interface that gives equal weight to streaming video and e-books as it does to apps or document storage, the device is basically a handheld vending machine for bestselling books, television episodes and the latest movies.

Many of the early reviews of the Kindle Fire were equally dismissive of the device's utility for business users. Again, not much of a shock: the tablet supports email, and Amazon's branded app store contains a number of productivity-related apps, but corporate buyers are more likely to gravitate toward a more seasoned option such as Apple's iPad, which since its 2010 release has managed to penetrate an ever-greater percentage of the Fortune 500.

However, the Kindle Fire's consumer focus doesn't preclude Amazon from pursuing a more business-oriented device a few product-cycles down the road. Certainly the foundation is there: hardware more than capable of handling the demands of productivity and business-centric apps, an app store whose shelves could expand to include branded products from enterprise-software companies, and a corporate culture more than willing to experiment in new niches.

Amazon's been down this road before, to a certain extent, with previous versions of the Kindle. In May 2009, the online retailer launched the Kindle DX, a larger-screen version of the popular grayscale Kindle. At the time, that plus-size display was positioned as ideal for certain niche products, including textbooks and diagrams. As a product, it never seemed to receive the same degree of attention as the regular Kindle, but nonetheless there was the sense that Amazon was more than happy to explore new ground-profit or no-in the quest for a new market.

It's precisely that willingness, combined with the existing capabilities of the original Kindle Fire, which opens the franchise to a potential move in an enterprise direction. That being said, when in doubt, Amazon always seems to orient toward the consumer; a Kindle Fire business play will more likely revolve around an augmented app capability and perhaps some added security features, rather than the issuing of a whole new device solely for workers.

In the meantime, Apple remains publicly confident that the Kindle Fire, no matter how many units it sells in its first iteration, won't overcome the iPad's considerable market lead-and some analysts seem to agree.

"If anything, we believe that Apple is not too concerned about the low-priced entrants," Mark Moskowitz, an analyst with J.P. Morgan, wrote in a Dec. 2 research note. "Recall, it has been our view that low-priced, reduced feature-set entrants, such as the Kindle Fire, are soap box derby devices stuck between a tablet and an e-reader."

In other words, he concluded, "we are not concerned much about competitive pressures until the second or third generations."

Once those generations arrive, though, Amazon certainly has the capability to make the Kindle Fire friendlier for those who want to check a spreadsheet or monitor some workflow, as opposed to streaming "Thor" from their online video collection. The only question is whether the retailer will want to make that sort of play.

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