Amazon's Kindle Fire: Winners and losers

Discussion in 'Android Tablet News Depot' started by Spider, Sep 28, 2011.

  1. Spider

    Spider Administrator Staff Member

    Mar 24, 2011
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    Amazon's Kindle Fire just nuked the tablet market: Winners and losers By Larry Dignan | September 28, 2011, 7:58am PDT

    Summary: Amazon just split the tablet market with Apple. The Kindle Fire is subsidized because you’ll shop more. Apple will stay high-end. Every tablet maker in the middle is screwed.

    Amazon CEO Jeff Bezos took the stage Wednesday to unveil an arsenal of devices that are going to disrupt rivals like Barnes & Noble as well as Android tablet makers.


    By rolling out the Kindle Touch (starting at $99), a regular Kindle ($79) and a Kindle Fire tablet ($199), Amazon introduced a subsidized model that only Apple can really match (statement). In a nutshell, we’re entering a near disposable e-reader/tablet era that will split the market between Amazon (consumption based profits) and Apple (high end brand profits). Every technology company caught in the middle is going to have some serious problems.

    Here’s a look at the winners and losers in the wake of Amazon’s latest line-up of Kindles:

    • Amazon: This tablet isn’t about hardware. It’s about consumption of Amazon services like music, streaming movies and apps. The Kindle Fire is an extension of Amazon’s store. How can Amazon price at $199 for a Wi-Fi tablet? Because you’ll shop more, consume more and be an Amazon Prime subscriber. The Kindle Touch and Fire equate to a lot more shopping and usage.
    • Android market share: Should Amazon’s heavily customized Android tablet take off it will go a long way to bolstering the operating system’s market position. Today the tablet market is all iPad all the time. Amazon will change that.
    • Apple: Amazon’s tablet isn’t an iPad killer by any stretch. In fact, Amazon’s aggressive pricing creates two tablet markets—high end and near disposable. Apple can hold its pricing. So-called iPad killers won’t be able to hold the market. In other words, Amazon and Apple just split the tablet market. There are $199 tablets (Fire) and $499 tablets (iPad). Anyone in the middle is toast.
    • Android tablets: If HP’s TouchPad fire sale ruined the Android tablet market, Amazon just killed it. A color tablet at $199 will kill pricing for Android tablets. Rest assured, Amazon will cut prices later. In other words, $99 is the new price point in just a few months. It’s going to be ugly for select hardware makers. Here’s a scenario: You can buy a Kindle Touch (starting at $99) and a Kindle Fire tablet for under $300 and still undercut most tablet makers.
    • Barnes & Noble’s color Nook: Yes, Amazon was late to the color tablet/e-reader party. But Barnes & Noble will have to cut its price from $249. That will squeeze margins for Barnes & Noble, which doesn’t have the financial firepower to hang with Amazon. On the e-reader front, the squeeze is still on.
    • Android 3.0 Honeycomb: What does it say when the two bestselling tablets are hybrid e-reader/tablets running on a lesser version of Android. It says Honeycomb isn’t that great.
    • Research in Motion: If Amazon will sell you a PlayBook-like tablet starting at $99, what is RIM going to do. RIM lacks apps—no Angry Birds—scale and pricing. The PlayBook may be over.
    Last edited: Sep 28, 2011
  2. SEMIJim

    SEMIJim Senior Member

    Aug 20, 2011
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    I don't know the tablet market well. For one: I'm not a "market studier" and for two I'm new to the tablet market, anyway. But I think the author is incorrect. The Fire is a very low-end tablet. The iPAD is a pretty high-end tablet. To say there's no room in-between, and no room for competition at each end, seems myopic to me.

    Put another way: I doubt that my friend who's awaiting the 4G Xoom is going to change her mind because of this.

  3. Androidicus

    Androidicus Member

    Sep 4, 2011
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    This article is nothing more than Amazon marketing BS in disguise.

    There will ALWAYS be a broad market because Android has always been for advanced users who know what they want and who also demand high quality components (hardware) to fulfill those needs. Adding a low-end "disposable" tablet that does NOT fit everyone's needs does not mean the market has just been "split in two" as they claim.

    I don't need Amazon.
    I don't need Apple.

    What I "need" is a high-end, dual or quad core tablet with good viewing angles (IPS screen), 3D graphic acceleration and universal expandability options e.g. USB, HDMI, etc. I'm pretty sure there is enough tablet makers who can fill this need who aren't Amazon, or Apple :p

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