If ads on the Kindle Fire Welcome Screen are successful, others will follow
There are a few things which are well known about Amazon’s Kindle Fire. First of all at $199 the company either loses money or at best breaks even depending on which analyst you speak with. We also know the version of Android the device runs is unusual as Amazon has its own proprietary shell around it.
And just like a company can pay to have a promotion on the Amazon PC home page it is being reported that Amazon is considering charging between $600,000 to $1 million for the rights to have ads displayed on the welcome screen.
Will this ad be shown on current Kindle Fires or perhaps a new ad supported model? Well the answer is not known at this point.
This approach is far different than that of Apple who has implemented ground breaking minimalist designs not only on its devices’ home pages but in its retail stores.
But consumers have shown a willingness to be flexible when it comes to saving money. Witness the success of the Kindle Fire as an example.
If Amazon is very successful selling home page advertising and such ads become popular and the consumer likes the model, there is a natural industry progression we can expect.
First off, a question… What company comes to mind when I say Internet ads. OK, I get it – today the answer is Facebook but in general, Google – right? And what company has the market-leading smartphone OS? You guessed it – at least till Facebook develops one, its Google again.
So doesn’t it make sense that Google will want in on the action and will start to integrate ads into the home pages of Android phones allowing consumers, carriers and equipment makers to subsidize the price of the phone with honest to goodness product pitches?
This potential trend is a real possibility and consumers have shown themselves to be very willing to take subsidized devices in exchange for long-term contracts. They also tolerate ads on TV, radio and even their streaming radio courtesy of services like Pandora. Ad supported gadgets may be the next frontier and if Amazon is successful, we may see the market scramble to emulate and/or improve upon its model.