Apple says Amazon Kindle Fire will further fragment Android
Apple Chief Executive Tim Cook and Chief Financial Officer Peter Oppenheimer recently indicated they are not concerned by Amazon's forthcoming $199 Kindle Fire tablet, as they believe it will only serve to fragment the Google Android platform.
Ben Reitzes of Barclays Capital recently met with Cook and Oppenheimer at Apple's Cupertino, Calif. campus. Though they expectedly did not reveal anything about the company's product pipeline, they did express optimism about Apple's current market position.
In particular, they indicated they are not concerned about the Amazon Kindle Fire, a new touchscreen tablet from the online retailer that will be powered by the Android mobile operating system. The Kindle Fire will sell for $199, or less than half the $499 entry price of Apple's iPad lineup, when it launches on Nov. 15.
"While the pricing at $199 looks disruptive for what seems to be the iPad's most important rising challenge, the Amazon Fire -- it is important to note that it could fuel further fragmentation in the tablet market -- given it represents yet another platform," Reitzes wrote. "While compatible with Android, the Apps work with Amazon products.
"The more fragmentation, the better, says Apple, since that could drive more consumers to the stable Apple platform."
Apple's response to the Kindle Fire could be viewed as evidence that the company is not planning any major moves to respond to Amazon's touchscreen tablet. In October, one rumor claimed that Apple was going to counter the Kindle Fire in 2012 with a so-called "iPad mini."
Reitzes believes that Apple will eventually get more aggressive in its iPad pricing and dip below the current $499 entry-level price of the 16GB Wi-Fi-only model. But Apple won't cut the price if it ends up sacrificing the product quality and user experience.
He believes the appeal of the iPad could be extended to more PC users if Apple were to extend keyboard options with touchpads, in addition to the touchscreen interface on the iPad itself.
As for the iPhone, Reitzes believes that Apple "clearly" has room to expand its smartphone sales with new markets and pricing strategies. He said that Cook expressed excitement both about the potential for the iPhone in Asia, as well as user response to the Siri voice recognition software on the newly released iPhone 4S.
Barclays Capital has forecast Apple to sell 30.7 million iPhones in the company's December quarter, a number that Reitzes said is "conservative," considering the rapid international rollout of the new handset. Apple announced this week that Hong Kong, South Korea and 13 more countries will gain access to the iPhone 4S on Nov. 11.
Ben Reitzes of Barclays Capital recently met with Cook and Oppenheimer at Apple's Cupertino, Calif. campus. Though they expectedly did not reveal anything about the company's product pipeline, they did express optimism about Apple's current market position.
In particular, they indicated they are not concerned about the Amazon Kindle Fire, a new touchscreen tablet from the online retailer that will be powered by the Android mobile operating system. The Kindle Fire will sell for $199, or less than half the $499 entry price of Apple's iPad lineup, when it launches on Nov. 15.
"While the pricing at $199 looks disruptive for what seems to be the iPad's most important rising challenge, the Amazon Fire -- it is important to note that it could fuel further fragmentation in the tablet market -- given it represents yet another platform," Reitzes wrote. "While compatible with Android, the Apps work with Amazon products.
"The more fragmentation, the better, says Apple, since that could drive more consumers to the stable Apple platform."
Apple's response to the Kindle Fire could be viewed as evidence that the company is not planning any major moves to respond to Amazon's touchscreen tablet. In October, one rumor claimed that Apple was going to counter the Kindle Fire in 2012 with a so-called "iPad mini."
Reitzes believes that Apple will eventually get more aggressive in its iPad pricing and dip below the current $499 entry-level price of the 16GB Wi-Fi-only model. But Apple won't cut the price if it ends up sacrificing the product quality and user experience.
He believes the appeal of the iPad could be extended to more PC users if Apple were to extend keyboard options with touchpads, in addition to the touchscreen interface on the iPad itself.
As for the iPhone, Reitzes believes that Apple "clearly" has room to expand its smartphone sales with new markets and pricing strategies. He said that Cook expressed excitement both about the potential for the iPhone in Asia, as well as user response to the Siri voice recognition software on the newly released iPhone 4S.
Barclays Capital has forecast Apple to sell 30.7 million iPhones in the company's December quarter, a number that Reitzes said is "conservative," considering the rapid international rollout of the new handset. Apple announced this week that Hong Kong, South Korea and 13 more countries will gain access to the iPhone 4S on Nov. 11.
Comments
It's tiny. It's slightly larger than the large size Android phones. So are Fandroids going to be walking around with a 5" phone and a 7" tablet?
I don't think that something that is smaller than some people's penis size even qualifies to be designated a tablet. 7" is closer to a large phone than to a tablet.
It's locked into Amazon's ecosystem, and the people who buy the tablet because of it's $199 price tag aren't the kind of people that are going to be buying a lot of content.
It's not even real multitouch. It's basically a cheap tablet for people who can't afford anything else. And at it's core, there is the horrible Android running things.
He believes the appeal of the iPad could be extended to more PC users if Apple were to extend keyboard options with touchpads, in addition to the touchscreen interface on the iPad itself.
Enough already with the keyboards, why should Apple take a leap in the past, to please who exactly? The analysts?
Keyboards are a dying breed, just like the users they supposedly would please...
"While the pricing at $199 looks disruptive for what seems to be the iPad's most important rising challenge, the Amazon Fire -- it is important to note that it could fuel further fragmentation in the tablet market -- given it represents yet another platform," Reitzes wrote. "While compatible with Android, the Apps work with Amazon products.
"The more fragmentation, the better, says Apple, since that could drive more consumers to the stable Apple platform."
I'm not sure that the Fire is really in the same category as the iPad or the full-featured ICS tablets (assuming they eventually hit the market).
I think maybe the customers will see it as a limited-use device, and might be content with Amazon's software offerings. Most smartphone buyers don't seem to care about getting lots of various apps, or even OS updates - and it seems likely that buyers of low-priced mini-tablets might be similar.
I'm not even sure that most Fire customers will know that it runs Android under the hood. That would be kind of like customers wondering if the cylinder heads in their subcompact use a hemispherical combustion chamber - very few will care.
Enough already with the keyboards, why should Apple take a leap in the past, to please who exactly? The analysts?
Keyboards are a dying breed, just like the users they supposedly would please...
Reitzes is obviously a pc user. He definitely sounds like someone who went to the Ballmer Business School.
"... it doesn't appeal to business customers because it doesn't even have a keyboard... I like our strategy... we are selling millions and millions and millions of phones every year, Apple is selling zero... "
2) I still say this tablet-esque $199 entry-level device will help iPad sales. IOW, those that want a full-blown tablet or not afaid to spend $500+ on a tablet will be iPad customers, but those unsure of how a tablet will convenience their life might find the Kindle Fire as a feasible purchase for two bills. If they like the overall experience and want a more well-rounded tablet experience they might become iPad customers for their next purchase.
I don't think that something that is smaller than some people's penis size
You should contact Apple's advertising department. They always use practical examples to sell their stuff.
"Want to display a life-sized penis on your tablet? The iPad can do that!"
You should contact Apple's advertising department.
That's ok. I don't think that Apple would be interested in my advertising.
I think that Apple stuff is great, but I already think that too many people use Apple stuff, their stores are crowded and there is too much chaos and scalpers around when they launch new products. I found that out first hand when I went to get my iPad 2 a while ago.
My advertising campaign would consist of insulting billions of people, and I wouldn't want them to switch to Apple. The main goal of the advertising would simply be to insult people and make them mad, so that they would never switch and they could keep on using whatever inferior devices they already use.
So like I said, I doubt that I'll be contacting Apple anytime soon.
Whilst Android based, the Kindle Fire and Amazon Appstore/Ecosystem will emulate exactly what Apple has today.
Is it really that difficult for Tim to grasp what Amazon has on offer?
...
I think maybe the customers will see it as a limited-use device, and might be content with Amazon's software offerings...
What non-limited use do iPad and ICS tablets have that the Kindle Fire doesn't?
Is he dense?
Whilst Android based, the Kindle Fire and Amazon Appstore/Ecosystem will emulate exactly what Apple has today.
Is it really that difficult for Tim to grasp what Amazon has on offer?
I don't think he's dense but I think he may be using fragmentation in a more generalized form. IOW, it'll fragment the ecosystems of the tablet market which in no way helps Android's ecosystem establish itself.
That's ok. I don't think that Apple would be interested in my advertising.
I think that Apple stuff is great, but I already think that too many people use Apple stuff, their stores are crowded and there is too much chaos and scalpers around when they launch new products. I found that out first hand when I went to get my iPad 2 a while ago.
My advertising campaign would consist of insulting billions of people, and I wouldn't want them to switch to Apple. The main goal of the advertising would simply be to insult people and make them mad, so that they would never switch and they could keep on using whatever inferior devices they already use.
So like I said, I doubt that I'll be contacting Apple anytime soon.
I think you may be onto something here...
Apple's response to the Kindle Fire could be viewed as evidence that the company is not planning any major moves to respond to Amazon's touchscreen tablet. In October, one rumor claimed that Apple was going to counter the Kindle Fire in 2012 with a so-called "iPad mini."
Did we need evidence? Did anyone think Apple was going to bring out an iPad mini... at half the price? A made up rumour if I ever heard one.
He believes the appeal of the iPad could be extended to more PC users if Apple were to extend keyboard options with touchpads, in addition to the touchscreen interface on the iPad itself.
Why would Apple feel threatened by any Android tablet? LMAO!
Because at $199 the Fire is going to sell very well.
That's ok. I don't think that Apple would be interested in my advertising.
I think that Apple stuff is great, but I already think that too many people use Apple stuff, their stores are crowded and there is too much chaos and scalpers around when they launch new products. I found that out first hand when I went to get my iPad 2 a while ago.
My advertising campaign would consist of insulting billions of people, and I wouldn't want them to switch to Apple. The main goal of the advertising would simply be to insult people and make them mad, so that they would never switch and they could keep on using whatever inferior devices they already use.
So like I said, I doubt that I'll be contacting Apple anytime soon.
That's all very funny.
"Apple - Unless you are an old-time customer, stay the hell away!"
I love the instant "no threat" attitude some here take. This is a threat to Apple, sure head to head, the iPad is a better device, problem is this thing only costs $199, compared to $499. That alone will draw many, many people to this device. Top that with the Amazon ecosystem and it is a winner. I will never own one, I love my iPad but for Christmas I was considering buying a "family" iPad for my two girls, now I can buy them each a Fire. They are not power users and do not need the full functionality of an iPad. They are like many consumers that are in the market but just do not want to spend $499.
The same way a dumbphone is a threat to smartphones for both vendors and carriers, yet Apple doesn't sell dumbphones because that's not where the profit it is, yet each dumbphone sale means an iPhone that isn't sold if we assume one phone per customer.
We already have reasons to believe Amazon will lose money on each Fire so why would Apple want to enter this market segment? We also know Apple is selling about as many as they can produce with no signs of that slowing down. I think the iPad could even become more profitable than the iPhone segment in a few years.
The Kindle Fire's is likely to help legitimize and popularize the tablet market even further for those not willing to spend $500 on a tablet, which in turn will help sell more iPads as they find the tablet experience useful enough to want a real tablet. Apple could be threatened by Amazon but they'd have to come out with a better competitor that would make people choose the Kindle Fire over the iPad for the same price point. That's the long term threat Apple should be weary of.
"The more fragmentation, the better, says Apple, since that could drive more consumers to the stable Apple platform."
Or it will drive developers to the Web, which may be what Google wants.
(1) Google is all about the web as a platform
(2) Apple comes along and threatens to destroy the web with apps
(3) Google performs an Aikido move. They release a modifiable app platform, knowing over time it will fragment the app space and force people back to the web.
Compare with Microsoft Windows: yes they sold to diverse manufacturers but did *not* let them modify the source code. That is what you do if you want to take over. Google does not want to take over they want to make a mess.