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Amazon expected to cut Kindle Fire orders in half as new iPad looms

post #1 of 54
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Orders for Amazon's new Kindle Fire tablet will reportedly be cut in half to 3 million units in the first quarter of 2012, with slower post-holiday sales and the anticipated launch of Apple's third-generation iPad.

Sources from Amazon's supply chain in the Far East DigiTimes that Kindle Fire orders with original device manufacturers are expected to be just 3 million units this quarter. That's half the 6 million units Amazon reportedly shipped during the holiday quarter of 2011.

Orders for the start of 2012 will top off at a million per month as sales are expected to significantly drop following the holiday shopping season. Suppliers reportedly indicated that the reduction is in line with expectations for companies like TPK Holdings and Wintek.

The Kindle Fire made a splash on the touchscreen tablet market last quarter, when Amazon began selling the device for just $199, or less than half Apple's entry-level $499 price for the iPad 2. One analysis from earlier this month suggested the Kindle Fire took away no more than 2 million iPad sales from Apple over the holiday season.

Amazon announced in late December that it was selling more than a million devices per week from its Kindle family, including the Fire and its traditional e-ink readers. While the online retailer said the Kindle Fire was its best-selling product, it declined to provide any specifics on sales.

Apple, meanwhile, is believed to have just come off its best-ever quarter for iPad sales, with the just-concluded holiday quarter projected to have surpassed the company's previous best of 11.2 million iPads sold in last year's September quarter. Apple will reveal its quarterly earnings, including specific iPad sales figures, in its earnings call next Tuesday.




As Amazon allegedly cuts its Kindle Fire orders and Apple prepares to announce its latest iPad sales, anticipation continues to build for a rumored third-generation iPad. Reports have indicated that production of the next-generation model is already underway, and the device is expected to go on sale in March.

One rumor this week claimed that Apple is planning to hold an event in early February to announce its next iPad before an official launch in March. Such a move would be unusual for Apple, as the company usually begins selling a product very soon after it is announced, but some rumors have suggested that Apple will continue to sell its current iPad 2 at a reduced price to take on cheaper competitors like the Kindle Fire.
post #2 of 54
Any word on the return rate on the Fire since the holiday season?
post #3 of 54
Quote:
Originally Posted by rbonner View Post

Any word on the return rate on the Fire since the holiday season?

They don't even post their sale numbers; do you really think we'll ever know about returns?

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post #4 of 54
Quote:
Originally Posted by rbonner View Post

Any word on the return rate on the Fire since the holiday season?

I doubt it's any higher than before the holidays, considering that the average rating on Amazon has gone up a notch (4.0 stars from 3.9).

With many cheap tablets selling close to $200 (and some even below), I start to think that Amazon may be breaking even on the Kindle Fire... No signs of a price increase despite the reportedly good sales, either...
post #5 of 54
Quote:
Originally Posted by rbonner View Post

Any word on the return rate on the Fire since the holiday season?

Return as in taking back or return as in revenue made in after sales of content?

Content sales are reportedly $136 per unit according to RBC Capital.

http://www.forbes.com/sites/ericsavi...than-expected/

[I would expect that they might cut orders in half but imo there will still be units made in this quarter available next Christmas [imho].)
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post #6 of 54
There's an apparent typo here Katie:

>>Sources from Amazon's supply chain in the Far East no more than 2 million iPad sales from Apple over the holiday season.
post #7 of 54
Quote:
Originally Posted by JBHoule View Post

There's an apparent typo here Katie:

>>Sources from Amazon's supply chain in the Far East no more than 2 million iPad sales from Apple over the holiday season.

You beat me to writing the same thing! Should be Kindle Fire sales from Amazon, I think.

If this is true, Kindle Fire is a flop. I must say I'm surprised - I believed the low price would really expand sales a lot, even for an inferior device. I guess buyers are more discriminating than I thought.

I wonder what content margins are - if sales are $136 per unit, and increasing as people continue buying over time, that seems to vindicate the Fire's break even business model, even as sales must be disappointing.

D
post #8 of 54
I don't understand why people get so offended by any kind of competition in the tablet market. Kindle Fires appeal to different buyers and not everyone wants to be in on the Apple ecosystem despite it being the best in my opinion for most digital content.
post #9 of 54
Quote:
Originally Posted by PBRSTREETG View Post

I don't understand why people get so offended by any kind of competition in the tablet market. Kindle Fires appeal to different buyers and not everyone wants to be in on the Apple ecosystem despite it being the best in my opinion for most digital content.

Offended?

Me thinks you are reading too much into the comments.
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post #10 of 54
The only reason that I could imagine there would be a significant delay (a month vs a week) between and iPad3 announcement and launch, is to allow developers to update their apps to retina specs.

On announcement day they release the beta for iOS5.1, then a month later it goes public upon the release of the iPad3.

Since there was no resolution change between the iPad1 and iPad2, developers didn't need to change their apps for the new hardware.
post #11 of 54
Digitimes is suddenly a reliable source? Perhaps only as long as they aren't writing about Apple products?
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post #12 of 54
Still the best selling tablet on Amazon.com

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post #13 of 54
Quote:
Originally Posted by Gatorguy View Post

Digitimes is suddenly a reliable source? Perhaps only as long as they aren't writing about Apple products?

So you don't agree with the 3 million units figure for this quarter or the 6 million units figure for the holiday quarter?
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post #14 of 54
Quote:
Originally Posted by Aizmov View Post

Still the best selling tablet on Amazon.com

Best selling tablet model on Amazon. It's quite possible that among the 18 models of iPad 2s selling on Amazon that the iPad would outsell the Kindle Fire. Same goes for any product that is split among many models, like the Kindle eReaders.

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post #15 of 54
Quote:
Originally Posted by SolipsismX View Post

Best selling tablet model on Amazon. It's quite possible that among the 18 models of iPad 2s selling on Amazon that the iPad would outsell the Kindle Fire. Same goes for any product that is split among many models, like the Kindle eReaders.

It was a joke post. Plus Amazon doesn't officially sell the iPad, 3rd party sellers do and they charge more than suggested retail price.

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post #16 of 54
Quote:
Originally Posted by island hermit View Post

Return as in taking back or return as in revenue made in after sales of content?

Content sales are reportedly $136 per unit according to RBC Capital.

http://www.forbes.com/sites/ericsavi...than-expected/

[I would expect that they might cut orders in half but imo there will still be units made in this quarter available next Christmas [imho].)

Lifetime content sales are predicted to 136 dollar/unit.
Majority of this content would have been bought from Amazon by other ways if they didn't have a Kindle Fire.

The Kindle fire looses money for Amazon. They can build it for around 200 dollars, but that does not include research, design, warranty and so on. Amazon will post huge losses thanks to this project. Just like the old .com days. Market share by loosing money.

Google post much lower profit then expected last day. Android is just like Fire, a huge money looser for Google. This is the only way Google/Amazon can compete with Apple. If I where a shareholder I would be angry at a strategy that looses money.
post #17 of 54
Not news until they do.

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post #18 of 54
Quote:
Originally Posted by Gatorguy View Post

Digitimes is suddenly a reliable source? Perhaps only as long as they aren't writing about Apple products?

Well I agree with you for once. It's a crap source.
post #19 of 54
Quote:
Originally Posted by PBRSTREETG View Post

I don't understand why people get so offended by any kind of competition in the tablet market. Kindle Fires appeal to different buyers and not everyone wants to be in on the Apple ecosystem despite it being the best in my opinion for most digital content.

It's only the trolls that are offended...by the fact that Apple exists. Look, let us Apple fans have our day will you. For years we have had to endure mockery, denigration, "sheeple" and "lemming" comments, predictions of doom and gloom, and general dismissal by the nerd herd and tech bloggers. Apple is kicking these people in the nuts now. Now it's our turn to call the Fire a failed POS if we want to. What's good for the goose should be good for the gander.
post #20 of 54
Quote:
Originally Posted by island hermit View Post

So you don't agree with the 3 million units figure for this quarter or the 6 million units figure for the holiday quarter?

If Digitimes was the only source indicating that, I wouldn't run with it as probably accurate.
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post #21 of 54
Quote:
Originally Posted by PBRSTREETG View Post

I don't understand why people get so offended by any kind of competition in the tablet market. Kindle Fires appeal to different buyers and not everyone wants to be in on the Apple ecosystem despite it being the best in my opinion for most digital content.

Nobody here cares about the so-called "tablet market" except Android-obsessed DED and The Usual Suspectz. We're all about the iPad market. Have you forgotten that, before 2010, there was effectively no tablet market? Microsoft had been pushing it for decades. Even Eric Schmidt believed that tablets were done and over. Now everyone is running around screaming "omg tablet market!!!" and what has changed? Oh, right: the iPad.

The only people who are "offended" are folks who constantly post stuff about "competition" on these forums. They are irked that Apple has done well and want Apple fans to acknowledge how great the competition is also. They think Apple fans are so stupid for not thinking like them, and they're constantly berating the "iSheep" in these forums. They forget: there would be no "omg tablet market!!!" today if the iPad wasn't a huge success and you know who made the iPad a huge success? The iSheep they hate soooo much. One sale at a time. That's what really irks them. We legitimized the whole "omg tablet market!!!"

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post #22 of 54
Quote:
Originally Posted by 11thIndian View Post

The only reason that I could imagine there would be a significant delay (a month vs a week) between and iPad3 announcement and launch, is to allow developers to update their apps to retina specs.

On announcement day they release the beta for iOS5.1, then a month later it goes public upon the release of the iPad3.

Since there was no resolution change between the iPad1 and iPad2, developers didn't need to change their apps for the new hardware.

The beta for iOS 5.1 is already to beta 3. If you meant iOS 5.2, though, I can see that, though they would probably need to launch 5.1 here in the next couple weeks. Much like iOS 3.2, 4.2, etc., it seems to line up with iPad launches., just like the x.1 updates did early on with iPod touches.
post #23 of 54
Quote:
Originally Posted by 11thIndian View Post

The only reason that I could imagine there would be a significant delay (a month vs a week) between and iPad3 announcement and launch, is to allow developers to update their apps to retina specs.
.

Apple is unlikely to care about such things. Especially since savvy developers should be assuming that a retina ipad could be happening and already have the update in the wings

Anything more than two weeks will likely be due to the FCC or something similar

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post #24 of 54
Quote:
Originally Posted by Gatorguy View Post

If Digitimes was the only source indicating that, I wouldn't run with it as probably accurate.

That wasn't the question.

Are they accurate now or not?
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post #25 of 54
Quote:
Originally Posted by DrDoppio View Post

I doubt it's any higher than before the holidays, considering that the average rating on Amazon has gone up a notch (4.0 stars from 3.9).


Oh yeah, Amazon rating of an Amazon product. Very credible.


Quote:
Originally Posted by DrDoppio View Post

With many cheap tablets selling close to $200 (and some even below), I start to think that Amazon may be breaking even on the Kindle Fire... No signs of a price increase despite the reportedly good sales, either...

Breaking even on the Fire? Not even close. Wait till the next couple of earnings reports. INvestors are going to fleeing.
post #26 of 54
Quote:
Originally Posted by PBRSTREETG View Post

I don't understand why people get so offended by any kind of competition in the tablet market. Kindle Fires appeal to different buyers and not everyone wants to be in on the Apple ecosystem despite it being the best in my opinion for most digital content.

Most of us here are not offended in the least.

We just think it is quite an inferior product.
post #27 of 54
Quote:
Originally Posted by island hermit View Post

That wasn't the question.

Are they accurate now or not?

No?
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post #28 of 54
Quote:
Originally Posted by rbonner View Post

Any word on the return rate on the Fire since the holiday season?

people i know that bought it are happy. who cares about lag when reading which is the major feature of this.

i mostly read on my ipad 2 and the hardware is overkill for most of my usage

amazon just got the cheap tablet market before apple got there
post #29 of 54
Quote:
Originally Posted by Gatorguy View Post

No?

What I'm getting at is that I think the same thing could be said about people who bash Apple... Digitimes is looked at as a good source of info when bashing Apple but a bad source when praising Apple.

So I asked you if you agree with them now or not... but you seem a little indecisive.
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post #30 of 54
Android makers always lie and inflate their figures.

It's like how they always cite shipped numbers instead of what is actually sold to consumers.

I don't trust any sales estimates about the Kindle Fire. And since Amazon doesn't release any figures, I do not acknowledge that the Kindle Fire has sold well. I need to see facts, not speculation, especially when it comes to inferior tablets like the Kindle Fire.
post #31 of 54
Quote:
Originally Posted by al_bundy View Post

people i know that bought it are happy. who cares about lag when reading which is the major feature of this.

i mostly read on my ipad 2 and the hardware is overkill for most of my usage

amazon just got the cheap tablet market before apple got there

I think the Fire has its uses.

My friend bought two for her children ages 4 and 5. Those kids are like a tornado going through the house. They drop, break, throw, step on everything. No way she was going to give them iPads. She has an iPad, MBP, iPhone as does her husband. Sure there are some drawbacks to the Fire but the kids can stay occupied for a while in the car or on a plane ride. The Fires are not meant to be enhanced learning devices like an iPad. Sort of an entry level tablet. Maybe when the kids are a bit older and won't throw them around they will get iPads.

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post #32 of 54
Quote:
Originally Posted by island hermit View Post

What I'm getting at is that I think the same thing could be said about people who bash Apple... Digitimes is looked at as a good source of info when bashing Apple but a bad source when praising Apple.

So I asked you if you agree with them now or not... but you seem a little indecisive.

That might be that I don't consider them reliable.
Just another rumor source to lump in with others. If there's several such sources reporting the same general news, then that might be a bit more reliable. By themselves, not so much IMO.
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post #33 of 54
Seems strange to cut orders when they don't have enough units for an international launch yet.

Unless Amazon are going to hold off the international launch until a 2nd generation Fire is ready.
post #34 of 54
Quote:
Originally Posted by Gatorguy View Post

That might be that I don't consider them reliable.
Just another rumor source to lump in with others. If there's several such sources reporting the same general news, then that might be a bit more reliable. By themselves, not so much IMO.

Sure... but you just had to make a dig at Apple fans while you were at it.
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post #35 of 54
Quote:
Originally Posted by mstone View Post

I think the Fire has its uses.

My friend bought two for her children ages 4 and 5. Those kids are like a tornado going through the house. They drop, break, throw, step on everything. No way she was going to give them iPads. She has an iPad, MBP, iPhone as does her husband. Sure there are some drawbacks to the Fire but the kids can stay occupied for a while in the car or on a plane ride. The Fires are not meant to be enhanced learning devices like an iPad. Sort of an entry level tablet. Maybe when the kids are a bit older and won't throw them around they will get iPads.

amazon has a nice children's book selection for the kindle with nice animation as well. not like apple, but more book like.

one person i know bought the fire for his daughter to read. all the people that bought it that i know had no intention of buying $500 ipads or any tablet in that price range
post #36 of 54
Quote:
Originally Posted by Tallest Skil View Post

They don't even post their sale numbers; do you really think we'll ever know about returns?

I wont matter at earnings. I am expecting that dumping tablets below or at cost is going to affect earnings. I will get a few cheap weekly puts on jan 31. A stock trading at 100 P/E can drop like a bag of patatoes when it miss by a lot. I may even do a straddle depending on premiums.

BTW I just bought a few JUL16 Google calls. :-)
post #37 of 54
Quote:
Originally Posted by island hermit View Post

Sure... but you just had to make a dig at Apple fans while you were at it.

No, I wasn't making any "dig" at Apple fans (which believe it or not I count myself among. Odd that no one has ever asked me.) It might be a "dig" at anyone from either persuasion that treats rumor sites as posting facts when it's convenient to their point of view, and "unsubstantiated trash" when it's not. It happens every day here. In this particular thread it happened to be only pro-Apple posters, but it obviously goes both ways.
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post #38 of 54
Quote:
Originally Posted by island hermit View Post

So you don't agree with the 3 million units figure for this quarter or the 6 million units figure for the holiday quarter?

Actually, I don't buy either of them.

Amazon claimed to be selling 1 million Kindles OF ALL TYPES) in December. The Fire was released on November 15, so there were about 6 weeks of sales. So even if sales in November were the same as December, they only sold 6 million Kindles of all types during that time period. I'm guessing that the Fire was close to half.

So I'm guessing 3 million last quarter and maybe 2 million this quarter (since they'll have 12 weeks instead of 6).

Keep in mind that when iPad sales dropped by 40% last year in the 1st calendar quarter, the analysts went nuts and completely hammered Apple's stock. Yet a 50% drop for Kindle Fire (which is the number being thrown out here) is far worse:
- Apple announced iPad 2 which lead to some decrease in iPad 1 sales in the quarter.
- Apple had a full 13 weeks in each quarter. Amazon only had 6 weeks last quarter and 13 weeks this quarter.
- Apple was already selling globally in the previous quarter. Fire has not been launched yet in many major countries.

If Fire sales drop by 50%, that would be an unmitigated disaster for Amazon.
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post #39 of 54
Quote:
Originally Posted by Suddenly Newton View Post

Nobody here cares about the so-called "tablet market" except Android-obsessed DED and The Usual Suspectz. We're all about the iPad market. Have you forgotten that, before 2010, there was effectively no tablet market? Microsoft had been pushing it for decades. Even Eric Schmidt believed that tablets were done and over. Now everyone is running around screaming "omg tablet market!!!" and what has changed? Oh, right: the iPad.

The only people who are "offended" are folks who constantly post stuff about "competition" on these forums. They are irked that Apple has done well and want Apple fans to acknowledge how great the competition is also. They think Apple fans are so stupid for not thinking like them, and they're constantly berating the "iSheep" in these forums. They forget: there would be no "omg tablet market!!!" today if the iPad wasn't a huge success and you know who made the iPad a huge success? The iSheep they hate soooo much. One sale at a time. That's what really irks them. We legitimized the whole "omg tablet market!!!"

omg, you are so right on! I love the tone of this and how true it is. People forget to give credit where do and have to agree Apple has created this market and everyone is just following. As of yesterday, Apple has just innovative how to teach our schoolers.

I feel like what Apple has done thus far are things I've read as a kid on what the future would be like in year 2000 but it's year 2012 now. hehehe
post #40 of 54
Quote:
Originally Posted by Gatorguy View Post

No, I wasn't making any "dig" at Apple fans (which believe it or not I count myself among. Odd that no one has ever asked me.) It might be a "dig" at anyone from either persuasion that treats rumor sites as posting facts when it's convenient to their point of view, and "unsubstantiated trash" when it's not. It happens every day here. In this particular thread it happened to be only pro-Apple posters, but it obviously goes both ways.

If you really want us to believe that then next time you make a comment like that you might want to leave Apple out of it and just say that people in general tend to choose only the information that agrees with their argument regardless of the quality of the source.
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