Kindle v. iPad: Value Positions, and Why Selling Hardware on Specs Alone is Dead
On Monday Amazon premiered a new Kindle commercial during Good Morning America. The ad (above) portrays two individuals trying to read poolside – one on an iPad and one on the new Kindle. The essence of the commercial touts the relative readability of Kindle’s e-ink display in direct sunlight.
Commentary (for example: here and here) on the new ad suggests a Kindle v. iPad strike. But the pundits miss the quintessential goal (and subsequent achievement) of the marketing spot. The Kindle ad isn’t about besting the iPad, it is about showing the consumer a discernible value. In the past brands created a value proposition, but moving forward they will increasingly create what I refer to as a value position…..
In the past manufacturers sold hardware on specs – and to some degree specs alone. At some level manufacturers still do this, and at times even successfully. Consumers have been conditioned to think know a higher number MUST(!) suggest a better product. 1080P must be better than 720P – it is a higher number. 240hz trumps 120hz – again a bigger number. 12 megapixels are better than 10.
Manufacturers even give higher-end models higher model numbers. The XTXS7000 is surely inferior to the XTXS8000. Even with no knowledge of this fictitious product consumers have become conditioned to know that higher model numbers signal better features. In the world of gadget specs, bigger is better.
Theoretically, this simple relationship is true. But we also know that discerning these differences becomes difficult in certain environments. The difference between 1080P v. 720P is mute at screen sizes below 40 inches. 10 megapixels are likely as good as 12 when images are printed or displayed within a certain size range.
But selling hardware on specs alone is dead. Even with growing wallet-share, the gadgetry landscape has become crowded. Numbers will no longer drive the type of unit volume manufacturers seek.
A crowded field doesn’t dictate competition between devices and it doesn’t deteriorate to Armageddon among gadgets. A growing wallet-share suggests consumers have a great proclivity for tech. But to take advantage of this, manufactures have to highlight where their devices fit in amongst all other devices along the spectrum that is consumer tech. Consumers understand the value proposition of tech. Creating a place for a given device to fit-in along the spectrum of devices is creating a value position.
Options are numerous and manufacturers must differentiate their wares– not to best the competition, but to create a value position among the competition. One of the easiest ways to create a value position is to highlight a clear use-case scenario. Outside reading is a simple and clear use-case scenario. It is a value position. On the surface the commercial looks competitive, but at the root the Kindle e-Reader is differentiating in order to occupy this value position. Consumers aren’t going to compare these two devices along specs. Products too diverse can’t compete. They are the proverbial Apple and orange (pun intended).
Being part of a bigger and broader ecosystem has become one of the most impactful value positions. Kindle has created an ecosystem of distribution for digital goods like books, magazines, and newspapers. The Kindle e-Reader is a part of this ecosystem, as is the Kindle for iPad app. The Kindle e-Reader and the Kindle for iPad app have different use-case scenarios. They occupy different value positions. They differentiate without competing.
References to price in the commerical suggest to me not competition along price, but rather highlight that at a relatively low price a consumer can add a node, making their use of Kindle on any device even more meaningful. For a relatively low price the consumer can expand their access to Kindle to another use-case – poolside reading.
A succeeding iPad expands the (potential) Kindle ecosystem – broadening the potential distribution network. We know with more nodes, the value of a network increases. Kindle’s marketing isn’t about competition; it is about creating a series of use-cases that highlight different and diverse value positions.