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Amazon "defined and dominated" low-end tablet market with 6 million Kindle Fires - Page 2

post #41 of 127
Quote:
Originally Posted by sranger View Post

I have played with a few that friends and family bought. They work as well as the iPad (Screen is a little too small) for most media related things. It seems like a good device for the price. This is the first tablet that should give Apple a little competition...

Apple needs to decide if it will compete in the lower end tablet market or give it away totally. a 5.5" iPod touch for $299 could be a very strong contender since the touch is so much more capable than the Fire and its ilk. (it would also crush Sony's Vita and Nintendo's 3DS).
post #42 of 127
Quote:
Originally Posted by lkrupp View Post

Competition? What planet are you from anyway? Is KIA competing with BMW? Two completely different markets. I really don't grok posts like yours.

What is more interesting is that Amazon has stated that they are working on a next-generation Fire, possibly with a different form factor.

Imagine a 10" Fire for $300.

Now THAT might be competition.

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post #43 of 127
I think the analyst is way off...

At least 10mm KFCs are sold every week and 40% of those are extra crispy
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post #44 of 127
Quote:
Originally Posted by Steven N. View Post

In smartphones it is an Apple/Samsung game.
In tablets it is an Apple/Amazon game.

There will be Amazon phone soon I guess.
post #45 of 127
Quote:
Originally Posted by JONOROM View Post

gprovida: "The disruption that Amazon is pioneering may in the long run effect Apple but they will be a major problem for current Android OEMs and Google in 2012. Facebook just compounds the problem for Google and Android."



Yah, expect for confusing affect and effect...

You can talk - confusing expect for except.
post #46 of 127
Quote:
Originally Posted by cnocbui View Post

Meanwhile, AI seems awfully quiet on Samsung's recently announced profits. Amazing how their margins are so low they hardly make a cent selling phones. Their telecoms division made a quarterly profit of $2.355 B, up 90% yoy.

I can't see how is that relevant to Appleinsider when Apple just reported a killing quarter. Those profit sure ate off other Android vendors rather than Apple?
post #47 of 127
Analyst Jordan Rohan is full of poop! His estimate is a merely wild guess he pulled out of his ear. Amazon never reveals how many Kindle's sell because then dopes like Rohan could figure out how much $ Amazon is losing on Kindle.
post #48 of 127
Quote:
Originally Posted by Wiggin View Post

It worked for MS getting the xBox a foodhold in the console gaming market.

...

Edit: And just by way of another example... low-end ink jet printers are aften sold at/near cost and they make their money selling ink. Just like Amazon hopes to make money selling/renting content.

Yeah, but ink cartridges have MASSIVE margins. That's not the case with content.
Has MS yet made an overall profit on XBox? Their current quarterlies may indicate that, but I still believe they're in the hole over the life of the product.

In any event, I welcome the Fire. Between the Fire sucking the oxygen out of the low end (pun intended) and iPad dominating the high end, I don't see where the Samsungs, HP etc of the world get traction now.
post #49 of 127
If the iPad didn't exist, I'd get the Nook Tablet. A family member got one for Christmas and it is a a very nice low end tablet. Of course one can argue that if there was no iPad there would be no Nook Tablet since iPad inspired a lot of the technology found in it.
post #50 of 127
want one!
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post #51 of 127
Quote:
Originally Posted by JONOROM View Post

What is more interesting is that Amazon has stated that they are working on a next-generation Fire, possibly with a different form factor.

Imagine a 10" Fire for $300.

Now THAT might be competition.

My bet is that you'll see a $349 iPad 2 when the iPad 3 rolls out (or shortly thereafter), and which point a $300 Fire is DOA.
post #52 of 127
Quote:
Originally Posted by ddawson100 View Post

. What the heck does this mean:

"software attach rates for apps and media downloaded to the tablets would correlate inversely with the hardware price"

There must be a plainer way to say this.

"once again I am just talking out of my ass"

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post #53 of 127
This whole thing could play out to Apple's advantage,

Impact to Android tablet makers,

- The $199 price point could knee-cap other Android tablets. At a minimum, it severely de-values non-iPad tablets. Price points and consumer expectations are being re-leveled. The profits these manufacturers hoped to realize may never, ever materialize

- Asian manufacturers have no hope of executing an Amazon content-focused model. They do not have content strategy or services. Including Sony. It's a bit shocking that they found themselves in this predicament in 2012


Impact to Google,

- It completely forks the "Android platform" including app stores. Amazon has taken 2.3 and will do its own development off it. They will likely never add future Google enhancements like ICS. We are seeing fragmentation on the tablet side unlike anything we've seen on Android mobile

- Google makes no money from the Fire. Zero.

- There is substantial risk that the lack of tablet traction could start impacting Google's core mobile business. Consumers will increasingly search out platforms that cut across computer, phone, tablet and TV. No one wants to have to buy games, books, movies, etc.., twice. Everyone wants to have their content synced across all their devices



It could be a positive scenario for Apple for the Fire to gain some (but not a lot) of traction for the next couple of years to cause a collapse of the Android tablet market. And, to use pricing on iPad 2 as a lever to keep the Fire in check.

I expect Apple to take the iPad 2 to $399 as a starting point when they announce the iPad 3. They could take it down to $299 if they wanted to try to kill off the Fire

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post #54 of 127
My girlfriend got a Kindle from her son as a Christmas gift.... she hasn't even opened the box yet... its going back..

What will Amazon do when the new iPad3 comes out and iPad2 drops in price? You can only sell for a loss for so long... and the incremental income (profit) will take a long time to get back to equal... its another zero sum game that won't work over the long-term.

post #55 of 127
Quote:
Originally Posted by Alfiejr View Post

Apple needs to decide if it will compete in the lower end tablet market or give it away totally.

I think they already decided

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post #56 of 127
I have to wonder about Amazon and the Kindle's ecosystem. Although it's a good idea to serve Amazon Prime customers, in the end, catering to cheapskates is not the greatest thing to make money. Cheapskates always remain cheapskates and they're always looking to find ways to save money. Amazon would have to lower prices for everything and then try to move vast amounts of media content just to get a little above break-even returns. They say you can't squeeze blood out of a beet and you can't squeeze much money out of cheapskates. Look at how poorly the financial returns are for the Android ecosystem. Not good at all compared to Apple's ecosystem and mainly because Apple consumers are BIG SPENDERS, not Android pikers.

I understand that there are people that can't afford the best of everything, but let's not put Amazon on a pedestal for catering to the bottom feeders with low-quality hardware. I'm anxious too see how well Jeff Bezos' scrap picker financial strategy works on the long run. It should survive but just barely and Amazon definitely shouldn't have any P/E of 100+. That's just Wall Street's crooked side that allows Amazon to sustain that undeserved multiple. I use Amazon to buy practically everything except clothing and I think it's a great service, but I still don't think it should have gone up against Apple with an iPad competitor (maybe it isn't, but the media is making it out to be by saying it's stealing iPad sales) because I think there are some lines a company shouldn't cross out of common courtesy. I doubt that Jeff Bezos would be happy if Apple started going into online sales of non-Apple products and with Apple's cash reserve, they could sell cheaper products for a short time and really hurt Amazon's bottom line.
post #57 of 127
Quote:
Originally Posted by sranger View Post

I have played with a few that friends and family bought. They work as well as the iPad (Screen is a little too small) for most media related things. It seems like a good device for the price. This is the first tablet that should give Apple a little competition...

Empirically, Apple says that the Fire has not had any impact on iPad sales.

And, frankly, I wouldn't expect it to. The $99 HP Touchpad was a better device in almost every way - yet even it apparently didn't have much impact (if any) on iPad sales. It appears that people who can afford an iPad are not accepting lesser devices instead. People who are buying the Fire, HP TouchPad, etc were not likely to be in the market for an iPad, anyway.

Quote:
Originally Posted by Red Oak View Post

This whole thing could play out to Apple's advantage,

Impact to Android tablet makers,

- The $199 price point could knee-cap other Android tablets. At a minimum, it severely de-values non-iPad tablets. Price points and consumer expectations are being re-leveled. The profits these manufacturers hoped to realize may never, ever materialize

- Asian manufacturers have no hope of executing an Amazon content-focused model. They do not have content strategy or services. Including Sony. It's a bit shocking that they found themselves in this predicament in 2012


Impact to Google,

- It completely forks the "Android platform" including app stores. Amazon has taken 2.3 and will do its own development off it. They will likely never add future Google enhancements like ICS. We are seeing fragmentation on the tablet side unlike anything we've seen on Android mobile

- Google makes no money from the Fire. Zero.

- There is substantial risk that the lack of tablet traction could start impacting Google's core mobile business. Consumers will increasingly search out platforms that cut across computer, phone, tablet and TV. No one wants to have to buy games, books, movies, etc.., twice. Everyone wants to have their content synced across all their devices



It could be a positive scenario for Apple for the Fire to gain some (but not a lot) of traction for the next couple of years to cause a collapse of the Android tablet market. And, to use pricing on iPad 2 as a lever to keep the Fire in check.

I expect Apple to take the iPad 2 to $399 as a starting point when they announce the iPad 3. They could take it down to $299 if they wanted to try to kill off the Fire

The above is pretty much true. Amazon may sell a bunch of Fires, but it doesn't seem to be hurting Apple and doesn't seem to be helping anyone else.
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post #58 of 127
Quote:
Originally Posted by lkrupp View Post

Competition? What planet are you from anyway? Is KIA competing with BMW? Two completely different markets. I really don't grok posts like yours.

There may be a little competition. It is more like a planet that only has BMWs and no other type of car. Then someone comes out with a KIA. I doubt it will have much short term effect on the iPad. Mainly because this is only going to appeal to Kindle users because of limited third party application support. This argument makes more sense when you are talking about Macs. Although with current prices it feels like buying a BMW for the price of a KIA.

Eventually this may be a real competitor. I think Apple has many options if they choose to compete though. They could make a less expensive iPad or a non-retina iPod touch with a double size screen. Of all Apple's products, the Kindle FIre is closest to an iPod Touch. You really need to look at it competing there.
post #59 of 127
In the PC world there are manufacturers who only know hardware, and buy an off the shelf OS. The tablet world is shaping up to be quite different. Apple and Amazon both sell integrated products, not platforms to run whatever OS you want on.

The famous separation between hardware and software that Bill Gates created (his main genius insight) is coming to a close, and we are back in a world of Products.
post #60 of 127
Quote:
Originally Posted by aaarrrgggh View Post

For Amazon... shipped is sold.

I really have trouble believing this is possible. It would mean that 50% of the tablets sold in the US were Kindle Fires. I could guess that 25% is within the realm of possibility based on the few that I have seen in the wild, which should put them under 2MM units. 2MM units also seems more in line with a production ramp-up, although they could have built stock up before launch.

You are right shipped is sold. However, there is a difference between Target buying the Kindles to sell to somebody and a person actually using the Kindle buying it. We don't know how many sold to retailers are sitting on shelves waiting to be sold to actual customers.
post #61 of 127
Quote:
Originally Posted by ArchAngel21x View Post

If the iPad didn't exist, I'd get the Nook Tablet. A family member got one for Christmas and it is a a very nice low end tablet. Of course one can argue that if there was no iPad there would be no Nook Tablet since iPad inspired a lot of the technology found in it.

The Nook is actually a better tablet than then the Fire. The Fire is doing well because of association with Amazon.
post #62 of 127
Quote:
Originally Posted by JONOROM View Post

What is more interesting is that Amazon has stated that they are working on a next-generation Fire, possibly with a different form factor.

Imagine a 10" Fire for $300.

Now THAT might be competition.

The reason others haven't released 10 inch tablets in that price range is Apple has a lock on the supplies. Apple's cash hoard allows it to buy huge volumes of things like LCDs and 1) lock up the supply, and 2) bring the cost down for it.
post #63 of 127
Quote:
Originally Posted by gprovida View Post

Amazon is selling tablets to those who would not have bought an iPad [as noted by Tim Cook based on iPad sales data] that is bringing a new market segment to bear. Whether this will be a threat to Apple iPad is TBD, but to the Android tablet community its a disaster.

Amazon is selling its curated and exclusive environment [with more to come] and they make money NOT on the hardware, but rather on the services. This makes competing very difficult for hardware manufacturers.

So they must compete with Apple at the mid and high range [demonstrably hard to do and make money and/or volume] and at the low end with Amazon, who is selling hardware at a loss or break-even.

Therefore, I think Apple's view that Amazon is going to make the tablet Android market very hard for non-Apple vendors and oh by the way cut Google out of the ad business, just like Facebook is doing.

What happens when Facebook introduces a phone and tablet at near cost or even at a loss and makes money on ads and sales. Again Hardware OEMs and Google are in a tough place.

The disruption that Amazon is pioneering may in the long run effect Apple but they will be a major problem for current Android OEMs and Google in 2012. Facebook just compounds the problem for Google and Android.


Spot on!

Gotta love this if you're an Apple shareholder. On the low end, Android faces a deep-pocket competitor who is happy to sell their hardware at cost, and who has a compelling ecosystem related to their tablet. What would Android bring to the party in the sub-$300 market?

I'm not so sure if there's even going to be a mid-market. If budget is a top priority, you'll tend to go with the Fire. If it's not, and you're comfortable going above a few hundred, it's just not that much of a stretch to go to $500 for an iPad 3 (or possibly somewhat less for an iPad 2).

Now when Android tries to compete with iPad 3 at the high end, since their margins are nowhere near as good as Apples, at an equivalent price-point, they'll have to offer a cheaper device. That, combined with the fact that Apple has an outrageous lead on tablet-specific apps, makes for a very tough slog for Android.

I just don't see Android making it in a substantial way in tablets.

And if Apple becomes to tablets what Microsoft has been in the desktop sphere, that will just enhance the iPhone and iMac and iCloud ecosystem that much more.

Could possibly get ugly if Amazon decided they wanted to go toe-to-toe with Apple in the full-featured 10-inch tablet market. But my guess is that they'll see that as a non-winner. The wild card, I think, is how well iBooks Author does. If Amazon starts feeling like their book empire is under serious threat from Apple, they may have no choice but to fight back.

Well, either way it's hard to see Android doing well here. Microsoft? That's a whole different story. I think their only hope--and it's a long-shot--is to take over in the enterprise market and hope this spills over into consumer. Good luck with that\.
post #64 of 127
Quote:
Originally Posted by charlituna View Post

I think they already decided

well, Jobs may have decided one way two years ago. but one big question for Apple's future is how much the Cook team may do things that Jobs once turned down. and Jobs changed his mind often too, by the way. Apple can't ignore changes as the marketplace evolves either.

the iPod touch very noticeably did not get a hardware update in 2011, just iOS 5 of course, and a 25% price cut. so a major hardware update for the touch is highly likely in 2012.
post #65 of 127
Quote:
Originally Posted by Alfiejr View Post

...

the iPod touch very noticeably did not get a hardware update in 2011, just iOS 5 of course, and a 25% price cut. so a major hardware update for the touch is highly likely in 2012.

You know, its been said before but I may be starting to believe it...
Apple won't do a small iPad, but they could very well release a big (7") iPod touch that is sub $300, and would squash any effort of Amazon to go upscale.

Time will tell.
post #66 of 127
"software attach rates for apps and media downloaded to the tablets would correlate inversely with the hardware price

Do I misunderstand the term attach rate? I thought attach rate didnt mean the total NUMBER of attached downloads (or whatever additional sales), but rather the rate per initial sale: how many paid app/media downloads per each hardware unit sale.

You could say the total number of downloads rises with the total number of sales, and that low prices drive sales. Those are obvious factors, but theyre just specific elements of a much more complex picture. (Are Kindle buyers and iPad buyers equally willing to spend on apps? Just one of many other factors.) You cannot say they people who thought theyd save money by getting a non-iPad are more likely than iPad users to splurge on content! Especially since they include apps, not just media: the Fire has almost none compared to iPad, and nothing like the same quality of apps.

So I dont see app/media download rates correlating inversely with hardware price. Id definitely expect the opposite.
post #67 of 127
I think this is a net positive for Apple. As others have mentioned, this really cuts off other Android Manufacturers. If Amazon is selling their low-end tablets at a loss, others have no incentive to compete. Amazon makes up their money on consumables later on (hopefully). Samsong, et all can't do the same, so there is no incentive to compete there. This takes away an entire revenue stream (look at all the low-cost Android phones that are sold, including BOGO offers). With Android failing to catch on in tablets until now, and Microsoft coming soon, this will really handicap Android going forward. If apple continues to sell ipads, iphones & ipods as iOS devices and Android sells only phones, Apple has a decen shot of staying competitive in device activations far into the future.
post #68 of 127
Quote:
Originally Posted by lkrupp View Post

Competition? What planet are you from anyway? Is KIA competing with BMW? Two completely different markets. I really don't grok posts like yours.

And who overall out of the KIA owners and BMW spent more on the extras... gas, wheels, wipers, after market upgrades etc. When there are 100 KIA owners to one BMW, it works in your favor to build some KIAs. Which is why most premium car mfrs own everyday car brands too.
post #69 of 127
Quote:
Originally Posted by GQB View Post

Yeah, but ink cartridges have MASSIVE margins. That's not the case with content.

True, but then again how often do you replace your ink cartridges? 2-3 times a year, if that? Compared to buying/renting several movies or books every month?
post #70 of 127
Quote:
Originally Posted by AppleInsider View Post

Amazon's estimated 6 million Kindle Fires represent just a fraction of Apple's record 111% rise to 15.3 million iPad 2 shipments during the same time period.

Personally, I see meeting 40% of the Apple shipments as being a _massive_ win for Amazon. Not 'just a fraction'. A big fraction.

Apple is entrenched in this market and for an outsider to come in and be selling close to 50% of the number of devices overnight is an amazing achievement in such a short time. Amazon will be very happy.

And why did they sell so many? As someone who actually has one, they are very neat devices. Sure, the iPad is better. It had better be given the price difference, but the gap is not as large as the price difference.

Personally I hope the iPad 3 is an amazing bit of technology placing Apple clearly back in the lead. The iPhone 4S was a disappointment - not something Apple should be repeating.
post #71 of 127
Quote:
Originally Posted by GQB View Post

My bet is that you'll see a $349 iPad 2 when the iPad 3 rolls out (or shortly thereafter), and which point a $300 Fire is DOA.


Apple really should do this, precisely due to the threat of a 10-inch Fire. If Apple can do this soon enough, maybe they could keep Amazon from even going down that road.

On the other hand, they probably shouldn't complete with Amazon in the 7-inch sphere...unless Amazon goes 10-inch. If Apple preemptively goes 7-inch, they'll be forcing Amazon to compete directly with them; there's no way that Amazon is simply going to cede the entire tablet market to Apple. So why not try to just establish a doupolistic truce, and enjoy watching Android squirm?
post #72 of 127
Quote:
Originally Posted by AppleInsider View Post

[...] "Kindle Fire has staked out an important market position due to its loyal Amazon customer base and attractive (low) device pricing." [...]

That "attractive (low) device pricing" is below Amazon's cost. That's an unsustainable business plan for nearly every other company making pads. (Remember the brief HP Touchpad fire sale?)

Amazon uses the Fire as a mobile sales terminal. They will recoup the money they lose on the Fire hardware many times over as the "loyal Amazon customer base" buys physical and digital goods from Amazon. It's the same thing that Schick and Polaroid did. Schick sold their razors at a loss and their blades at a profit. Polaroid sold their cameras at a loss and their film at a profit. They took a one-time device sale loss and more than made up for it as customers purchased consumable items for the device.

Can RIM do that with PlayBook? No. Not without a robust, successful infrastructure like Amazon's or Apple's. How about Motorola with Xoom? No. Just having an infrastructure isn't enough. It needs to be more than a checkbox. It has to be robust and successful enough to attract and hold that vitally important loyal customer base. Same with the Galaxy Tab etc. They're all starting from scratch, infrastructure-wise. They're presenting an incomplete solution, which isn't the way to build that vitally important customer base. Apple and Amazon have been relentlessly building and refining their infrastructures and customer bases for a decade now. Good luck catching up.

Having said all that, I'm sure Amazon would have loved to sell Kindle Fire at a $100 profit (for about $300 retail) if they were sure they could do it sustainably. They have clearly done their homework, plugged numbers into their spreadsheets, and decided that they couldn't. You get within a few hundred bucks of the base iPad price and you get crushed by iPad's value. You drop your price $300 below iPad and you end up selling your padlet at a loss. Only the latter is viable, and only if you have goods to sell to your loyal customers after they purchase your pad.

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post #73 of 127
Quote:
Originally Posted by RegurgitatedCoprolite View Post

Wow! Six million KFs, each sold at a loss. Impressive.

I'm sure they'll make it up in volume!


Not particularly original, sorry.
post #74 of 127
Come on people, give credit when credit is due. All I'm reading on here is sour grapes. Being able to sell 6,000,000 of anything is impressive. Period.
post #75 of 127
Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

Everybody I know who bought a Kindle Fire returned it and bought an iPad.

Have owned iPads from the start, wouldn't give it up. But have enjoyed a Fire I got as a company gift. Really slick and useful device, will keep using them both. After seeing the Kindle Fire, I also bought one for my 5 year old granddaughter for Christmas. Couldn't have bought her an iPad, but Fire was at the right price point. She loves it and uses it all the time.

If you can afford an iPad, there's no comparison. Otherwise the Fire is a nice highly functional device. Simple matter of $$.
post #76 of 127
Quote:
Originally Posted by Mac-Daddy View Post

Come on people, give credit when credit is due. All I'm reading on here is sour grapes. Being able to sell 6,000,000 of anything is impressive. Period.

When they actually release their real numbers and show us how many they've actually sold, then we can talk about giving credit where it's due.
post #77 of 127
Quote:
Originally Posted by lkrupp View Post

Competition? What planet are you from anyway? Is KIA competing with BMW? Two completely different markets. I really don't grok posts like yours.

To my limited imagination, Kia and BMW are in the exact same business. Selling cars. Your grok-meter must be tuned differently than mine.
post #78 of 127
Quote:
Originally Posted by cnocbui View Post

How many people would that be exactly?



The phrase 'just a fraction' is usually used to denote a very small percentage. I don't call 39% a small percentage.

Meanwhile, AI seems awfully quiet on Samsung's recently announced profits. Amazing how their margins are so low they hardly make a cent selling phones. Their telecoms division made a quarterly profit of $2.355 B, up 90% yoy.

I suspect the Galaxy Note is the one to watch. At $299 on AT&T, I would not be surprised to see it take a chunk out of iPad sales.

That is WITH a 2 year contract.

Is the Note an over-sized phone or an under-sized tablet?

Maybe its a Phablet?
post #79 of 127
Quote:
Originally Posted by Mac-Daddy View Post

Come on people, give credit when credit is due. All I'm reading on here is sour grapes. Being able to ship 6,000,000 of anything is impressive. Period.

There. Fixed that for you.
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post #80 of 127
Quote:
Originally Posted by Alfiejr View Post

well, Jobs may have decided one way two years ago. but one big question for Apple's future is how much the Cook team may do things that Jobs once turned down. and Jobs changed his mind often too, by the way. Apple can't ignore changes as the marketplace evolves either.

the iPod touch very noticeably did not get a hardware update in 2011, just iOS 5 of course, and a 25% price cut. so a major hardware update for the touch is highly likely in 2012.

Apple margin on the iPad is high. Why would they want to get a lower margin on a smaller device?

If anything, the low-end iPad 2 will be discounted by $100-$150 when the next iPad comes out. Right there it'll be about $350-400 and entice potential Kindle owners.

The market place has spoken, the iPad in its current price/form is winning the tablet market. The 5" and 7" tablets have failed to knock Apple from its perch.
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