Amazon’s New $199 Kindle Fire: It’s All About the Price
Early analyst reaction to Amazon’s just-unveiled Kindle Fire tablet is underwhelming. The price is the key feature and as for pressuring Apple, the device may boomerang, coming back to haunt already stressed-out Android tablets.
“The bottom line, it’s not a credible threat to the iPad,” Piper Jaffray analyst Gene Munster told us Tuesday. “The biggest feature of Kindle Fire is its price,” he said prior to the $199 announcement. A recent survey by the analyst found 62 percent of people asked said they’d buy a $249 Amazon tablet versus 21 percent that would opt for a $599 iPad. The results show there is a “high degree of price sensitivity in the tablet market,” Munster adds.
Munster forecasts Amazon will sell 2.5 million Kindle Fires in the December quarter, with the tablet and the Traditional Kindle e-reader accounting for 8 percent revenue worth $5.4 billion in 2012.
Sterne Agee analyst Shaw Wu calls the iPad “a (so far) unbeatable combination of hardware, software, content, pricing and ease-of-use that is tough to match.” Indeed the group most likely to feel the heat from Amazon’s announcement could be non-Apple vendors, such as RIM, Samsung and Motorola.
However, others say Amazon provides the first real rival able to match Apple’s ecosystem. “Like Apple, Amazon has a strong brand, compelling content, sophisticated billing systems, and widespread distribution,” said Neil Mawston, Director at Strategy Analytics.