I'm Sorry I Ever Doubted Jeff Bezos
Should I be flattered or embarrassed?
Amazon.com (Nasdsaq: AMZN) CEO Jeff Bezos was introducing the Kindle Fire two months ago, but he began by rubbing some salt into the wounds of the original Kindle's detractors.
He went over a few of the unkind things that were written about the e-reader ahead of its initial November 2007 rollout.
"The Kindle is here, though it may as well be kindling" was the second of the unattributed knocks that Bezos read during the press conference. It's here -- at the 3:38 mark -- if you want to play along at home.
I didn't immediately recognize those words as my own, but The New York Times' David Streitfeld recently brought it to my attention. There is no such thing as a lack of attribution in this age of search engines.
Just my luck. I finally get Bezos -- the ultimate tastemaker in the art and business of literature -- to read my words out loud, and it's a diss.
C'mon, baby, light my Fire
"Amazon's New $400 Paperweight" was the viciously incendiary headline of that article. He chose the opening throwaway line, which in retrospect was one of the kinder things I had to say about the e-reader at the time.
This doesn't mean I'm seeing if I can get free two-day shipping on crow through Amazon Prime. I stand by everything that I wrote in that article. The next three words in that piece -- after the kindling remark -- were spot-on: "priced too high."
If Amazon hadn't budged off that $399 price point, there's no way the Kindle would be a gadget that today is owned and enjoyed by millions.
Maybe it's my fault for not assuming that aggressive price cuts would follow. I certainly didn't think it would be a brick-and-mortar bookseller -- Barnes & Noble (NYS: BKS) -- that would grow to be its most ferocious competitor in a platform that would, and will,neventually put the traditional bookstore out of business.
It was easy to predict that annual refreshes would make the Kindle better. But I don't think anyone figured that an 80% price cut to $79 in four years was possible. Apple (NAS: AAPL) rolled out the iPad at $499 early last year. Raise your hand if you think new ones will be selling for $99 in three years.
I didn't think so.
Giving Bezos his due
I don't want to make this about why I think I was right, because the latest round of price cuts -- and Tuesday's debut of the Kindle Fire -- is about more than that. This is really about how Bezos was ultimately right, and how I was an idiot to doubt him.
I did eventually buy a first-generation Kindle, though I waited a few months until the initial $40 haircut. I didn't wait that long for the Kindle Fire. I kept refreshing the Amazon.com screen while Bezos was talking -- mocking me, I would later find out -- until I was sure to be one of the first to buy in this time around. I have never used my Kindle much. I trust it will be a different story with the Kindle Fire.
Why didn't I realize that it would be Amazon leading the way in e-readers and now entry-level tablets? It was wrong to think that Sony (NYS: SNE) -- the biggest name in e-readers before the Kindle's arrival -- would matter in a high-priced market facing serious resistance from throwback bibliophiles. Google (NAS: GOOG) had its heart in the right place by digitizing books in the years leading up to the Kindle's release, but the company was infuriating book publishers instead of working with them.
Of course it would ultimately be Bezos and Amazon! Who else could it have been?
Let me make my prediction this time perfectly clear: Kindle Fire will be a huge hit. It may eat a little into Apple's iPad 2 momentum, but ultimately this will be about opening the realm of tablets to a wider audience. The Fire is the Camry of tablets, and I mean that in the kindest way possible.
Google's Android has been a hard sell in tablets, but largely because the major brands in this space have chosen to tackle the iPad on spec sheets instead of price tags. Amazon gets it. Bezos has the digital-media ecosystem in place to take a hit on the hardware, making it a winner on the only two fronts that matter -- content and price.
I was wrong, Bezos. And the beauty of this digital age is that I don't even need to physically eat my words.
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At the time this article was published The Motley Fool owns shares of Apple.Motley Fool newsletter serviceshave recommended buying shares of Amazon.com, Google, and Apple and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors.Longtime Fool contributorRick Munarrizowns a first-generation Kindle and will soon own a Kindle Fire. He owns no shares in any of the other stocks in this story and is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Motley Fool has adisclosure policy.
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