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What Amazon should do: Think different. Be more like Apple

<b>analysis</b> Amazon needs to make its products sexier, because it can't just compete on price. Despite throwing a higher-resolution screen and more bells and whistles into the new Kindle Fire HDX, it's still no iPad.

Donna Tam Staff Writer / News
Donna Tam covers Amazon and other fun stuff for CNET News. She is a San Francisco native who enjoys feasting, merrymaking, checking her Gmail and reading her Kindle.
Donna Tam
4 min read
David Carnoy

Amazon's Kindle Fire line can't just rely on price anymore. It needs a little sex appeal.

That's a big reason why the newly unveiled Kindle Fire HDX line features a higher-resolution screen, faster processors, and a buzz-worthy tech support feature called Mayday.

The Kindle Fire HDX devices' debut earlier this week comes as the competition in the tablet business has only grown more intense, particularly with affordable tablets such as the Nexus 7 -- and even, to some extent, the iPad Mini -- taking more of the spotlight. While Amazon essentially pioneered the notion of a budget tablet, it's now trailing in tablet sales compared with other device makers, and can no longer rely solely on price to attract consumers.

Indeed, the latest revamp shows that the e-commerce giant realizes a small price tag is no longer enough to sell the devices that act as a gateway to its goods and services. The new Kindle Fire devices house a 2.2GHz quad-core Qualcomm Snapdragon 800 CPU, an Adreno 330 graphics processor, and a Mayday button inside its settings. Analysts praised Mayday, which connects users to a live Amazon representative who can take over their screens to troubleshoot, as an unprecedented way for tech companies to provide customer service and appeal to mainstream consumers.

"I wouldn't be a bit surprised to see Samsung or someone else do a similar thing," said Maribel Lopez, an analyst at Lopez Research. "If it works, it would be brilliant."

The hype is sorely needed. While the original Kindle Fire burst out of the gatewith its then-unprecedented $200 price tag and was quickly anointed a legitimate iPad rival, the tablet line has certainly cooled off. In November 2011, it captured 17 percent of the market for tablets, and was second only to Apple, according to IDC. The most recent quarterly numbers didn't even have Amazon on the top-five list, which means it had less than 1.4 percent of the market share. CNET contacted Amazon for comment, and we'll update the story if the company responds.

While it's odd to think about Amazon as a device company -- even Amazon itself sees the Kindles as portals to its online marketplace first, and products second -- the truth is it needs to start thinking more like Apple.

Once considered a luxury for the affluent or gadget-obsessed, tablets are becoming mainstream, analysts say. So much so that even cheaper tablets need to be of a certain caliber to interest consumers -- fast processors, beautiful screens and graphics, and no lag.

In addition to focusing on the device's design and function, Amazon will need to heavily market the Mayday feature, much like Apple did when it first unveiled Siri. Amazon wants to control how a consumer experiences its services through a device, but to achieve that it first needs people to want the gadget.

Just look at how Samsung achieved its No. 2 ranking behind Apple. It used the sex appeal of its Galaxy S smartphone line, and extended it to its family of Galaxy tablets. It also didn't hurt that the company made tablets of every size, but its success is grounded in the reputation its brand has gained because of the quality of its products. At this point, even lesser-known companies such as Asus, Lenovo, and Acer are ahead of Amazon.

It's not like Amazon is doomed to failure. The company has a strong brand and the world's biggest digital store front. And it's known for creating convenience.

"Everything Amazon does is about a great shopping experience," said Gartner analyst Carolina Milanesi. "It's about about a great online experience -- not just shopping for books or CDs or whatever, but there's the online streaming capabilities on the content side and the apps. So the hardware needs to be good enough to be competitive, but the hardware is not the hook."

If Amazon can pull it off, Mayday could be that hook. It's more convenient than visiting Apple's Genius Bar, and it zones in on a key part of Amazon's brand -- providing reliable service. Amazon has already started circulating some Apple-like ads for Mayday. It could take another page out of Apple's book and consider other ways to promote its tablet to consumers, including creating some sort of brick-and-mortar presence where people can see and try the device.

Of course, Amazon is no Apple (and Amazon CEO Jeff Bezos probably doesn't like the comparison). While millions of people use the online market daily, there isn't yet that inherent trust in products built by the company -- and it's a long way off from generating the kind of excitement Apple can garner with its product launches.

"They're just a different company. Apple is Apple -- and right now, no one is Apple," Lopez said. "Even the best branded companies in the electronics space have trouble replicating that aspirational feeling Apple's scripted in the marketplace."