Kindle Fire demand surpasses iPad ahead of launch, could be a threat
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2. Apple has a healthy margin on iPads whereas Amazon is reportedly selling the Fire at or below cost. If tablets turn out like phones, then I'd rather be Apple with 5% of the market and 50% of the profit than like Android with more market share and thinner margins.
All that said, as an iPad owner, I did pre-order a Fire since I'm curious to see how a 7" tablet fits into my life. This is what I wrote regarding HP's troubles in the tablet market and is probably why Amazon will success where others have failed (http://martingordon.tumblr.com/post/9049814056/hps-two-probl...):
There’s a glut of 10” tablets on the market. The iPad dominates the market and the ten or so 10” Android tablets do nothing to help HP’s situation there. 7” tablets are completely different when it comes to portability, there isn’t as much competition at this screen size, and Apple has stated that they have no intentions to build a 7” tablet (which means that it’s coming, but it’s not here yet and doesn’t have 80-95% market share like the 10” iPad does). A $250-$300 7” tablet has the opportunity to give HP a nice foothold into the market, and once they do, they can go back and fight for 2nd place in the 10” market. Building 7” marketshare and building consumer mindshare to eliminate also-ran status is the only way HP (or anyone else for that matter) will have a fighting chance in the tablet space.
If I'm Amazon I'd be afraid that, in January, Apple introduces an iPad 3 and drops the iPad 2 to the Fire's price.
On an upright iPad I can just read/browse A4 documents, most web sites and 80 chars wide code.
I've asked others that liked 7". For reading literature, 7" is be equally good. Maybe for video, too. (Really young (/near sighted) people can probably read documents, too...)
Anyway, more competition is good here.
Just like with movies and TV shows, music, books, and
magazines, Kindle Fire offers a fully-integrated Android
apps and games experience - purchase or register for an
app or game once, enjoy it on your Kindle Fire and other
Android-based devices - and all apps and games are backed
up in the Amazon Cloud for re-download anytime
They don't compete on price. They're not really even the same class of device. This is just another pointless and content-free "ZOMG <foo> KILLER IS ON THE WAY!!1" article.
"The more interesting stat, perhaps, is that more than a quarter of respondents in ChangeWave’s survey who confirmed an imminent Kindle Fire purchase said they would buy the Amazon tablet in place of an iPad."
The correlation between the intentions of respondents in this survey and the general tablet-buying public is not clear, as is the case with any survey, but in this context the Kindle Fire is clearly a threat to the iPad. 26% - that's a huge threat.
(Also, never mind the surveys show differences of 1%, which is likely around one-third of its margin of error.)
If Fire/Nook do 80% of what the iPad does (and with 50% of the screen size) but cost half the price, it can disrupt iPad sales. Apple is wise to head this off.
Google should be far more worried about Fire than Apple (who shouldn't be lax about it either).
Amazon is selling a product (at a discount on cost) that is aimed to lock you into the Amazon experience. While I like the Amazon experience, I also like to give my older technology away and the microphone (Skype/VOIP) and extra storage will be much more valuable in a few years.
Combine that with the basic 7" premise of a small, light reading device and it seems like an all-around win for users with that particular set of needs.
But Amazon has essentially built a magic portal that can instantly swap your money for anything they sell. Do you realize how much money someone can spend in 1 minute while sitting in a comfy chair with the Kindle? There's a huge list of "things people want" in Amazon's electronic goods inventory, even more in their real goods inventory, and they already have your credit card info ready for you to use.
Have you thought about what pages gain the most from the Silk browser? That's right, Amazon detail pages. You'll be able to browse amazon.com faster than ever before, and buy even more things.
Disclaimer: I worked at Amazon until October (and hold stock), but I am not revealing (or aware of) any confidential information regarding the Fire.
If this proves to be correct, then the Fire would be increasing Amazon's sales on other high-margin goods, and the money lost on the device could simply be considered a form of customer acquisition cost.
As for being a threat to the iPad, I am not so sure. The Fire strikes me as being almost totally dedicated to media consumption, where the iPad seems to be more of a general computing device.
Keep in mind that eInk Kindles are very different from LCD tablets. The former are fantastic for reading, and not that good at much else. The latter are more general purpose, but have much shorter battery life, and are probably not so good for reading, depending on how well you like reading an LCD screen.
Many people said the same thing about the iPad when it first came out. Some still do.
Apparently Skype is supposed to work with my Galaxy Tab since yesterday, can't wait to try it out.
Giving a camera-free Kindle to someone from my family for Christmass would be kind of pointless, because then we wouldn't be able to chat...
Go outside and look in the road. Can you see more than one make of car?
competition is good. This story should read - "at long last some decent competition in the 'pad' market place"
There's a difference between an iPad and tablets. That difference is something you just can't define. If you go by a dictionary or consensus definition then they're the same but talk to anyone who's used an iPad and they'll tell you it's an iPad, not a tablet.
The post says nothing about why the demand is high and reads like advertising hype. I see nothing special about this Kindle beyond the color screen and Silk, which by the way is nothing more than a glorified browser serving cached content.
I see the iPad and the rest as serving different markets. The Kindle and it's ilk are for book lovers mainly. iPads are for apple fanatics and web content consumers, and the rest are for people who want iPad knockoffs for their cheap price or don't know the difference. I know that sounds really harsh, maybe even ignorant but I don't meant it that way at all.
Seems like whenever a new tablet comes out everyone jumps on the "this-is-the-ultimate,ate-iPad-competitor" bandwagon. Tablet makers seem to be largely copying the iPad as well instead of offering something different. I'd gladly she'll out the extra $400 for the real thing over a sub-par knockoff anyway. These tablet makers need to quit comparing themselves to something they are not (the iPad) and sell their devices on value they offer. Amazon so far has done the best job of this of anyone I've seen but the others need to sell on value offered, not just price. You do get what you pay for.
My views are based on experience and observation. Maybe others have some more solid evidence to validate or detract from mine.
I work around "real" people and I've been shocked at how many of them have ordered Kindle Fire's both for themselves and as Christmas presents. These are people who have never owned a tablet and in the case of presents they're buying for other people who have never owned a tablet. When I ask why they're buying them the answer is universally the same thing...
"I could never justify buying an iPad because I don't know what I'd use it for but for $199 I figured what the heck"
A lot of these people are influenced by the original Kindle and its reputation but most are looking for Tablet functionality. When I ask what they plan to use it for the first answer is always "browse the web"
I do agree its a different market from the iPad. But the question I have is whether these people will go for a higher end purchase further down the line. And if so what they'll buy. Because these people will be tied to Amazon by their media in the same way I'm tied to Apple.
It can easily be defined, and it is branding.
And branding is why the Fire is so likely to provide strong competition. Amazon has been establishing their brand for nearly two decades, has pretty much set the standard for online customer service (Zappos) and price efficiency, and in the slate market has a long standing reputation [in internet years] for functionality and quality with the Kindle.
Furthermore Amazon clearly understands the killer app for slates is books, and that readers are a larger and more loyal demographic than gadgeteers and fanboys. Yes, the iPad is a true Scotsman, but most people don't care about what's under the kilt.
[Edit] Amazon is likely to sell a lot of Fire tablets because they are offering a clear value proposition in accordance with their brand, rather than higher priced "Magic."
There's the same difference between iPhone and Android, no? Last quarter, Android surged from 40 to 43% market share. iPhone held at 28% (still healthy growth, mind you-- the whole market is growing).
The ~$200 price point is a huge differentiator. Before this, non-iPads really didn't have any differentiator (prices were comparable and, as you say, iPads were just better). The Fire is going to be a big deal.
With the ~$200 price point and the Kindle and Amazon brand, this could be real competition for the iPad.
This has only been said twice, with any degree of seriousness, the Xoom and Galaxy. But it became clear very shortly that they were too expensive for what you were getting.
The Fire is cheap, great brand, and appears to have a good set of apps at launch.