Kindle Fire may force Android tablet makers to cut prices
* Kindle Fire set to disrupt other Android tablet sales-analysts
* Non-iPad tablet makers under pressure to cut prices
* Samsung may lose No.2 tablet position in 2012-analysts
By Miyoung Kim
SEOUL, Sept 29 (Reuters) - Asian technology companies came
under pressure on Thursday to slash prices of their tablet
computers after Amazon.com <AMZN.O> launched its Kindle Fire at
a mass market-friendly $199.
From Samsung Electronics <005930.KS> to Sony Corp <6758.T>,
major Asian tablet makers have ambitious plans to take on Apple
<AAPL.O>, whose iPad is the gold standard in the booming market.
With their me-too type of products priced almost at the same
level as the iPad's starting price of $499, none of them have
however been able to gain any significant market share from
Apple.
So far, Samsung has been seen as the most credible
challenger to the iPad and some analysts suggest it could lose
its No. 2 position to the eagerly anticipated Fire.
The South Korean company's tablet marketing campaign has
also stumbled in recent months due to Apple's legal attempts to
ban Samsung's tablet sales in Australia, the United States and
Germany, over patent infringement, among other claims.
The Kindle Fire, while lacking many of the high-tech bells
and whistles common on tablets from cameras to 3G wireless
connection, may sound the death knell for a raft of devices
based on Google Inc's <GOOG.O> Android operating system.
"The pricing is critical to gain traction in the tablet
market... Rival manufacturers have failed to attract consumers
as they have matched the iPad's price point without matching its
content offering," said Adam Leach, an analyst at research firm
Ovum.
"Amazon's retail-based business model allows the company to
subsidize the device on the premise that consumers will buy more
from Amazon, be that physical goods or its digital content."
Samsung's Galaxy Tab, Sony's S tablet, Motorola's <MMI.N>
Zoom and many others from Acer Inc <2353.TW> and Asustek
Computer Inc <2357.TW> all run on Android, which Amazon's Fire
also uses and combines with its online store.
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By pricing the Fire at less than half the iPad -- yet
stripping out costlier components and features -- the Internet
retailer hopes to get the device into millions of consumers'
hands and then into Amazon books, movies, music and other
content.
TOUGH FOR SAMSUNG
Samsung's new tablet Galaxy 10.1 is priced roughly the same
as the iPad.
Even at that price, a slim profit margin of around
5 percent makes it difficult for Samsung to cut prices sharply,
analysts say.
Worldwide tablet shipments will more than triple to 60
million units this year and surge to 275.3 million units by
2015, research firm IHS iSuppli forecasts.
Apple dominates the North American tablet market, with 80
percent of the 7.5 million units shipped during the second
quarter of 2011, Strategy Analytics says.
Analysts had expected Amazon's tablet to be priced around
$250, roughly half the price of Apple's iPad, which starts at
$499.
Sony vowed in January to become the world's No. 2 tablet
maker -- behind Apple -- by 2012 and Sony executives have since
stuck to that ambitious claim.
"We expect the Amazon tablet to... put pressure on the other
non-iPad competitors as they are unlikely to be able to compete
on price and value," UBS analysts said in a note.
"At the $199, we believe Amazon's tablet has the potential
to be disruptive to the market and, in particular, the non-iPad
market...Other tablet vendors will find it difficult to match
Amazon's price point."
HP's firesale of its TouchPad tablet at $99 just six weeks
after its launch created strong demand for its soon-to-be-killed
product, a sign of just how critical prices are in the sector.
and the pervading theme is simply a tirade against the iPad. Gone are the arguments about the iPad not being a computer and about Apple's walled garden.
