Digital Devices

Amazon’s entry into digital devices came in November 2007 with the release of the Kindle, a device that allowed users to download and read books, newspapers, and magazines (see Exhibit 3d). The Kindle was initially priced at $399, and the first run sold out within six hours. By the end of 2008, Amazon had 125,000 digital books available, and by 2009 this had risen to 290,000. Most were priced at or below $9.99, sometimes less than what Amazon paid publishers.
In 2011, Amazon introduced the Kindle Fire, a smart tablet that offered video, gaming, and Internet capabilities, directly competing with Apple’s iPad. After a series of price reductions and spec improvements, the Fire became the most popular item on Amazon.com. A brand study from Consumer Intelligence Research Partners found that Amazon customers who owned a Kindle spent $443 more per year than customers without a Kindle product. In Q1 2019, Kindle accounted for 8% of global tablet sales, behind Apple (27%), Samsung (13%), and Huawei (10%).
Amazon continued to expand its offering, with new devices ranging from the poorly received Fire Phone – a low-priced smart phone – to the Fire TV Stick, which competed with Apple TV, Roku, and Google Chromecast, to Ring, a video-doorbell device. Most notable, however, was the suite of Alexa- enabled devices. Alexa, a digital personal assistant that could answer questions, play music, and help with various other tasks, was first introduced with the voice-command Amazon Echo in November 2014. By 2017, Alexa-enabled devices were some of the best-selling items on Amazon, making the year a record for Amazon hardware sales. Third-party developers had created more than 30,000 skills for Alexa, and customers could control over 4,000 smart home devices using the system. In September 2018, Amazon introduced a suite of upgraded and new Alexa-enabled devices for the home and, for the first time, for the car. Tom Taylor, Senior Vice President, Amazon Alexa, commented, “We want you to have access to Alexa everywhere – in your kitchen, in your living room, in your office, and now in your car or truck.”