

Kindle Fire demand surpasses iPad ahead of launch, could be a threat - kemper
http://www.bgr.com/2011/11/09/kindle-fire-demand-surpasses-ipad-ahead-of-launch-could-be-a-threat/

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martingordon
1\. It's a faulty comparison. The iPad survey was taken in February 2010, two
months before the iPad came out and the Fire survey was taken in October 2011,
18 months after the iPad came out. In the 20 months between the surveys the
iPad has validated the market for tablets. Of course more people want/need a
tablet now after seeing all the cool things a tablet (read: iPad) can do over
the past year and a half.

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...](http://martingordon.tumblr.com/post/9049814056/hps-two-problems)):

 _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._

~~~
cwe
Played with a family members new 7" Galaxy tab this weekend, and as a fellow
iPad owner, I have to admit that 7" is a nice size. Big enough to be very
comfortable for most tablet activities, but more manageable in your hands. If
there was a choice between 7" or 10" iPads, I bet a lot of people would go for
7".

~~~
robterrell
I agree -- I bought a 7" Galaxy Tab for cheap on Woot, and I immediately
preferred the size. Now I pretty much use it only for reading books with the
Kindle app. It actually fits some of my coat pockets, but it's too heavy to
haul around all day just as a dedicated book reader (it seems to weigh as much
as the iPad 2). In the end, it sits on my desk mostly unused, and I use the
iPad 2. Still, it has convinced me that a very good 7" tablet could do well.

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.

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sjs
It's not a threat unless people stop buying iPads. How you do you get from
"interest in the Fire" to "lack of interest in the iPad"?

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.

~~~
kemper
I don't agree at all.

"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.

~~~
sjs
Were they really going to buy iPads though? Maybe they wanted an iPad but were
not going to buy one.

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wmeredith
I wouldn't trade my iPad for a Fire ATM, but I would love to see some real
competition in the consumer tablets arena. Amazon vs. Apple means that I win.

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alttag
Would it be okay if we waited for them to appear in the wild before we start
comparisons about whether it's a "threat"?

(Also, never mind the surveys show differences of 1%, which is likely around
one-third of its margin of error.)

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alexwolfe
Apple is going to face some stiff competition in 2012 from the Kindle Fire and
the new Nook. There is no iPad Killer but these are real players in this space
and I don't see them going away anytime soon. Both will have access to an
incredible digital library similar to Apple's eco system. This will be a good
year for consumers looking to buy tablets.

~~~
r00fus
This is a disruptive pricing strategy.

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.

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AdamFernandez
I think both the Kindle line and the iPad will continue to be profitable
because they address slightly different markets. It's not always a zero-sum
game.

~~~
dmazin
I think a big distinction is that the Fire can be a pretty crappy device with
a focus on content (which is Amazon's strongest offering), as evidenced by the
general cheapness of the Kindles, while the iPad's offering is obviously the
quality of the device itself.

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theBobMcCormick
Since the Fire is supposed to come with the Amazon Android Market, and _not_
the Google Android Market, it could be a threat to both Apple and Google.

~~~
r00fus
This is the point I make. Both the Amazon App Store _and_ Amazon Silk are a
huge threat to Google.

Google should be far more worried about Fire than Apple (who shouldn't be lax
about it either).

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gurkendoktor
It will be really interesting to see how the Kindle Fire and iPad compete
_internationally_. Not only have I doubts about raking in profits via eBooks
in countries with less emphasis on copyright, but the Appstore has not even
arrived in central Europe. By the time people outside the US have heard of the
Kindle Fire, it will have to compete against the iPad 3. By comparison, it
takes Apple less and less time to get their products shelved in late markets
like Hong Kong,

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casca
Cancelled my Fire pre-order and ordered a Nook Tablet. The extra $50 is worth
it for the microphone and extra storage.

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.

~~~
ww520
Here's a comparison review on the two. [http://gizmodo.com/5857041/nook-
tablet-vs-kindle-fire-the-di...](http://gizmodo.com/5857041/nook-tablet-vs-
kindle-fire-the-differences-add-up)

~~~
jmelloy
Interesting to compare two products that aren't actually out yet.

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blake8086
The Kindle Fire is going to absolutely destroy the iPad in terms of profit
generated. However, there is room for both devices on the market, and the iPad
won't be "killed" as the press likes to claim.

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.

~~~
btipling
If they're selling the Fire at a loss, how are they going to destroy the iPad
in terms of profit. Mind you I ordered a fire, so I hope to see it succeed.

~~~
wanorris
I don't know that this is a correct analysis but the premise of the argument
presented is that Amazon is taking a small loss up front, but in return they
are effectively shipping you a cash register into which you keep depositing
money for Amazon digital and physical goods.

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.

~~~
jmelloy
My $250 iTunes bill this month suggests Apple is also shipping you a cash
register.

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saturdaysaint
The big question is how _anyone else_ competes with a device that sells at a
loss. This is a problem for Apple, but it's death for anyone else trying to
sell a 7" tablet. Given the economics, it'll take a competitor with serious
content chops - _maybe_ Sony could put together an Amazon Prime/Netflix-like
content package to compete?

~~~
esrauch
I think this type of market dynamic already exists with iPhone and Android.

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RexRollman
I have been considering a Kindle for some time and the Fire does indeed look
interesting to me. I want to wait, however, and see some detailed hands-on
reviews of the final product before ordering one.

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.

~~~
kijin
> The Fire strikes me as being almost totally dedicated to media consumption

Many people said the same thing about the iPad when it first came out. Some
still do.

~~~
ja2ke
There is a difference though - the iPad was built by Apple to be bought as a
piece of multipurpose hardware (once you buy it, Apple is happy, has made a
profit from you) while the Fire was built by Amazon to be a cheap window into
Amazon streaming content (once you buy it, all Amazon wants you to do is
consume media, so they can make their money back).

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vaksel
the kindle is quite a bit cheaper than the iPad, so a lot more people will be
able to afford it

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Tichy
If only they had included a camera in the Kindle. That is a serious omission
in my book.

~~~
mahyarm
A front facing camera would probably be more useful than a back facing one on
a tablet.

~~~
dpark
Neither is especially useful in my experience. The value proposition is pretty
much entirely limited to videochat, which is probably why both cameras on the
iPad 2 suck so much for still photography. However, videochat still isn't all
that common.

~~~
Tichy
I never used videochat, until I had a baby. Now being able to chat with the
tablet would be great.

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...

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junklight
this whole "there is only one product in any category and it has to be killed"
theory of journalism and blogs drives me up the wall.

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"

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ScottMFisher
The tablet market was very different before the iPad was released so I don't
think it's a very fair comparison. Are there figures from the iPad 2 launch?

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billpatrianakos
The key phrase here is "ahead of launch". I doubt the Fire will be as strong
of a competitor as its being made out to be.

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.

~~~
TomOfTTB
I think you're mis-reading this.

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.

~~~
ineedtosleep
Aside from the price, which is already going to be a huge buying pull for most
people, the Fire is going to be considered as the Kindle that does "other
stuff too." If they are happy with the "other stuff" and their screen size, I
don't see what offerings an iPad would give to lure them away when it comes to
just pure content consumption (though I do realize it runs Android apps as
well).

