Bezos: “In The Modern Era Of Consumer Electronics Devices, If You Are Just Building A Device You Are Unlikely To Succeed.”

The Kindle Fire may be poised to win the Android tablet wars, but Amazon CEO Jeff Bezos doesn’t think of it as a tablet. “We think of Kindle Fire as an end-to-end service,” he told me yesterday in an interview after his presentation, picking up on a theme he introduced earlier onstage (see video above). The Kindle Fire is a wrapper for all of Amazon’s digital media products in the cloud. It is designed specifically to consume digital media in all its forms, from books and magazines to movies, games, and apps. Bezos sees the Kindle Fire holistically as a delivery device which will help unleash all the digital media services Amazon offers.

“In the modern era of consumer electronics devices, if you are just building a device you are unlikely to succeed,” he says “Today it is about the software, the software on the device and the software in the cloud. It is a seamless service—this is Kindle greeting you by name when you pull it out of the box. Some of the companies building tablets didn’t build services, they just built tablets.”

There is a reason why no Android tablet has yet taken off to rival the iPad despite there being literally a hundred of them from different manufacturers. Tablets are not about speeds and feeds. They are a window into the cloud. The companies that get this are best positioned in the post-PC world. It is not just about the device, but about the services on the Internet tied to that device. Apple tightly controls the end-to-end experience on the iPad, and will be adding more back-end services with iCloud.

Amazon is also creating an end-to-end experience using its own unique collection of Internet services. That is why the Kindle Fire may become the first serious Android contendor. (I don’t expect it to sell anywhere near the levels of the iPad, but it has a good shot at becoming the best-selling Android tablet by a long shot). Amazon is selling not jut the Kindle Fire tablet, but all the digital media that you can enjoy on it. It is a natural extension of the Kindle brand, which started out more focused as a device to deliver the millions of electronic books in Amazon’s store. But that too is an end-to-end service, as Bezos pointed out at the opening of his presentation which you can watch in the video above. He also answers the Kindle’s early critics who predicted it would fail with a chart showing the exponential growth of Kindle book sales.

When I asked Bezos in our interview which Kindle he thought would sell more, the Fire or the new Touch (which is still purpose-built for reading), he answered, “We are going to sell millions of both and many people are going to buy both.” Bezos himself still prefers reading on the E Ink Kindles. “I believe for long-form reading our electronic ink Kindles are the best there is,” he says. “If you ever run into me on vacation, I will have an e-ink Kindle by the pool.” But books aren’t the only kind of digital media that you will want, and that is where the Fire tablet comes in. From my own experience, I think people will tend to gravitate towards one or the other—time will tell.

Bezos touched upon a few other topics during our interview as well. I asked him if Amazon is out of the bidding for Hulu, but he wouldn’t talk about it. Building a streaming video service with the best TV shows and movies is something he is serious about, however. “We have committed hundreds of millions of dollars to Prime Instant Video licenses,” he notes, referring to the 11,000 TV shows and movies available for streaming to Amazon Prime customers.

What is holding back the mainstream adoption of streaming video? “I think it is happening quickly,” he says. “The thing that needs to continue to happen is to get people to connect their TVs to the Internet. If they have a recent TV, it may have IP capability, but they haven’t hooked it up. They don’t even know that.”

On Amazon Silk, the new mobile browser built specifically for the the Kindle Fire to speed up browsing, Bezos says “it is substantially faster” than Webkit or other mobile browsers. But there is no benchmarking data yet to verify that claim.

The Kindle Fire is built on an earlier version of Android, 2.1, than the current Gingerbread version, 2.3. I asked Bezos about his plans to upgrade, and he indicated that the underlying operating system would not stagnate. “Our goal is to make sure on the developer side that if you develop an Android app, you can put it on a Kindle Fire and on other Android devices. We want developers to be able to develop once.” He understands that apps are media too and he wants to sell as many of them as possible.