As I've said before, Apple will eventually release a 6-7" iPod touch, and that will be the end of all these other smaller tablets. This was their strategy with the iPod; completely over take high end hard disk based media players, then move into the lower end Flash based players.
The 7" iPod touch won't be able to run iPad applications, but will have a huge library of iPod touch apps right from the start.
As I understand it, piper jaffray is one if those analysts who cops it in the neck on this forum when it comes to anything Apple. Why is his word gospel now?
As I've said before, Apple will eventually release a 6-7" iPod touch, and that will be the end of all these other smaller tablets. This was their strategy with the iPod; completely over take high end hard disk based media players, then move into the lower end Flash based players.
The 7" iPod touch won't be able to run iPad applications, but will have a huge library of iPod touch apps right from the start.
You heard it here first...
iPod touch XL, starting at $249.
Hope they have sandpaper in the box....
In any event, if this move leads to Apple actually releasing a product people want that would be a good thing. Competition is always good for the consumer.
Who will want one of these extremely limited and small tablets? I wouldn't take it if it was free. For real viewing of video content, the screen is too small. If I'm going small, I'll take the new Samsung phone with a 4.3" screen (or is it 4.5"?). A 7" screen is neither here nor there, this nor that. Jobs is exactly right on this point. I see no upside on a 7" screen.
At this price, it will sell OK, but to whom? Probably to young kids who will see it as a "starter iPad" and who may download video and music content, but won't be big spenders and sure won't be buying e-books.
$180 is just BOM probably and doesn't include R&D, licensing, packaging, delivery, among others. So Amazon probably is losing money off of it. But they do that all the time. That's their business model to lose money on one thing and make it up on another.
R&D is a fixed cost (and likely reduced since it leverages the Playbook hardware design and Android software), licensing and packaging are unknown but probably minimal, and distribution is also likely minimal (since logistics is one of Amazon's key strengths).
I find it strange that an analyst doesn't release supporting data, but "$50 per Kindle Fire" is grossly oversimplified and is likely not true after a certain number of devices.
It's unlikely that Amazon would run themselves broke selling the Fire for $199, when a $249 price tag would match the Nook Color for a better device with much better services.
As I understand it, piper jaffray is one if those analysts who cops it in the neck on this forum when it comes to anything Apple. Why is his word gospel now?
Ummmm, you do realize that "Piper Jaffray" is not a person but a firm?
As I've said before, Apple will eventually release a 6-7" iPod touch, and that will be the end of all these other smaller tablets. This was their strategy with the iPod; completely over take high end hard disk based media players, then move into the lower end Flash based players.
The 7" iPod touch won't be able to run iPad applications, but will have a huge library of iPod touch apps right from the start.
You heard it here first...
iPod touch XL, starting at $249.
No, they won't.
Fanboy-ism aside, Steve Jobs was absolutely correct about the 7" form factor... Too big to fit in your pocket, not big enough to accommodate the functionality, usability, and human scale of larger tablets.
Apple doesn't make products because that's what others are making. Apple makes products others wish they made.
The only reasons 7" tablets exist are 1) constrained supply of larger touch panels (mostly thanks to Apple), and 2) to keep costs down. You'll notice neither of these reasons has anything to do with making a better product for the consumer.
If Apple makes a 7" touch product, I will have lost some serious respect for them.
No, they don't make plenty of money on content and, no, they can't afford to lose money on a tablet. They made $1 billion in profit last year on $34 billion in revenue. At $50 loss per tablet, 20 million tablets/year would be $1 billion in losses. If Amazon is smart they're looking at the Kindle as a way to be move up, not as a loss leader for the razor thin margins of online retail.
I thought it went without saying that the $50/device figure is not an exact figure by any means. I was pointing out that Amazon does not need to make money on this device, and indeed, under certain circumstances could afford to lose money on each sold. If that sparks a significant tie-in of new revenue from ebooks, music, and other media (e.g. apps) it will be profitable and, additionally, will help to grow their addressable market. In fact, this alone might justify a more significant loss per device.
If they try to profit too much from the device they'll move closer to the iPad, and competing directly with the iPad would, I think it is reasonable to conclude at this time, would not be as successful. It is an option they might pursue down the road under the right circumstances.
It's your understanding rather than your maths that is off.
What was reported earlier is that an analyst estimated the Fire's bill of materials to be $180. That doesn't mean it costs Amazon $180 to make a Fire, it means if you add up the cost of the components that go into a Fire, it comes to $180. So that $180 doesn't include assembly costs, shipping, support, cost of returns/failures, R&D or overheads. If the BOM really is $180, I'd say it's an optimistic guess that Amazon loses only $50 per sale at $199 retail price.
Munster is just throwing out a figure whose only basis is the three seconds he gave himself to write it down. And AI is quoting it as a real figure, but it's not. Not only is it a total guess on his part, but he doesn't give any reason why it wouldn't be $100 or $1. It's a blogtalk byte, worse than info from a forum.
It is not obvious that Amazon has the capabilities (yet) for managing a supply and retail chain for hardware in the tens of millions. It took Apple decades of experience to get here in terms of such capabilities.
Looks like Munster is belatedly recognizing the same point when he says "..."supply chain, production and distribution capabilities." The other analysts are not quite there yet....
It's very interesting that Amazon chose to come out with this. It's a dangerous chance they're taking. They have no control over the buyers of this. What if they decide to not buy as much as Amazon needs to make a profit? And there's a very big misunderstanding as to what they have to do to make that profit. It won't be as easy as they think.
Who will want one of these extremely limited and small tablets? I wouldn't take it if it was free. For real viewing of video content, the screen is too small. If I'm going small, I'll take the new Samsung phone with a 4.3" screen (or is it 4.5"?). A 7" screen is neither here nor there, this nor that. Jobs is exactly right on this point. I see no upside on a 7" screen.
At this price, it will sell OK, but to whom? Probably to young kids who will see it as a "starter iPad" and who may download video and music content, but won't be big spenders and sure won't be buying e-books.
Why would anyone buy an entire phone dataplan contract when all they wanted was a bigger iPod? The only reason people are crowing about how unwanted a 7" tablet is is because no one has yet put out a decent one. I'd love a good 7" $200 tablet. It would be awesome for me. Not that I have much interest in a forked closed dead end old version of Android, but that just means the Fire won't be it for me.
We've seen already with Android: People who think they need to save 150$ on the device cost -> don't spend money on content !
Android folks rarely buy apps, nor do they buy music or movies, tv shows. If it takes 50$ on content PROFITS (not revenues alone!) to make a Fire profitable, than it takes 250$ on content PROFITS to get on par with a naked iPad. Most Fire buyers will never purchase that much.
The key thing with that tablet stuff is synergy between hardware AND content business. Each of the two parts can, no, SHOULD(!) halo sale the other part. It only makes sense when both parts are profitable, as with iOS. Amazon just wants to propel content business while subsidize hardware where Android subsidizes software and zero cost Google services (content) in order to generate hardware profits for the vendors.
It's like Apple would sell unlocked iPhones for 99$ just to halo Mac and iTunes sales. They don't do because they can afford it. It's like car business: Honda or Mercedes - Your customer segment is everything. Stick to it , can't escape it!
Build hardware for penny savers and want to earn money on luxury lifestyle goods like music, video and apps which you can all have for free somewhere and no one needs for living ? That doesn't make sense in a bigger picture.
Seems the Kindle Fire competes against the iPod Touch - and does it well for someone who wants a similar device with a larger screen- better for reading on.
I don't see this competing with the iPad at all.
I would have to play with one first thou before I make a judgement. Like SJ said about the first iPad; You have to hold one in your hand to understand it.
I don't see it competing with something with a 3.5" screen. It's competing with the Nookcolor, which has been a fair hit.
But I have held 7" tablets on my hand. You can also turn an iPad to horizontal when attempting to read a magazine to see how that smaller screen makes it very difficult. And that's the same with video. Hold the iPad horizontally to see the size of the video on a 7" model. It's very close. So even magazines and video will be better on an iPad. Ironic, in a way. Amazon's own content looks better on an Apple device.
Comments
As I've said before, Apple will eventually release a 6-7" iPod touch, and that will be the end of all these other smaller tablets. This was their strategy with the iPod; completely over take high end hard disk based media players, then move into the lower end Flash based players.
The 7" iPod touch won't be able to run iPad applications, but will have a huge library of iPod touch apps right from the start.
You heard it here first...
iPod touch XL, starting at $249.
Apple could buy a few billion $ of these and dump them...
Very strategic of you...
iPod touch XL, starting at $249.
$199 is the magic number, as the HP Touchpad proved.
Wait for it...
As I've said before, Apple will eventually release a 6-7" iPod touch, and that will be the end of all these other smaller tablets. This was their strategy with the iPod; completely over take high end hard disk based media players, then move into the lower end Flash based players.
The 7" iPod touch won't be able to run iPad applications, but will have a huge library of iPod touch apps right from the start.
You heard it here first...
iPod touch XL, starting at $249.
Hope they have sandpaper in the box....
In any event, if this move leads to Apple actually releasing a product people want that would be a good thing. Competition is always good for the consumer.
For the unabashed fanboys: http://thisismynext.com/2011/09/28/e...dle-fire-ipad/
$199 is the magic number, as the HP Touchpad proved.
Wow. I sure am glad that the iPad met that criterion!
At this price, it will sell OK, but to whom? Probably to young kids who will see it as a "starter iPad" and who may download video and music content, but won't be big spenders and sure won't be buying e-books.
$180 is just BOM probably and doesn't include R&D, licensing, packaging, delivery, among others. So Amazon probably is losing money off of it. But they do that all the time. That's their business model to lose money on one thing and make it up on another.
R&D is a fixed cost (and likely reduced since it leverages the Playbook hardware design and Android software), licensing and packaging are unknown but probably minimal, and distribution is also likely minimal (since logistics is one of Amazon's key strengths).
I find it strange that an analyst doesn't release supporting data, but "$50 per Kindle Fire" is grossly oversimplified and is likely not true after a certain number of devices.
It's unlikely that Amazon would run themselves broke selling the Fire for $199, when a $249 price tag would match the Nook Color for a better device with much better services.
As I understand it, piper jaffray is one if those analysts who cops it in the neck on this forum when it comes to anything Apple. Why is his word gospel now?
Ummmm, you do realize that "Piper Jaffray" is not a person but a firm?
Wait for it...
As I've said before, Apple will eventually release a 6-7" iPod touch, and that will be the end of all these other smaller tablets. This was their strategy with the iPod; completely over take high end hard disk based media players, then move into the lower end Flash based players.
The 7" iPod touch won't be able to run iPad applications, but will have a huge library of iPod touch apps right from the start.
You heard it here first...
iPod touch XL, starting at $249.
No, they won't.
Fanboy-ism aside, Steve Jobs was absolutely correct about the 7" form factor... Too big to fit in your pocket, not big enough to accommodate the functionality, usability, and human scale of larger tablets.
Apple doesn't make products because that's what others are making. Apple makes products others wish they made.
The only reasons 7" tablets exist are 1) constrained supply of larger touch panels (mostly thanks to Apple), and 2) to keep costs down. You'll notice neither of these reasons has anything to do with making a better product for the consumer.
If Apple makes a 7" touch product, I will have lost some serious respect for them.
Ummmm, you do realize that "Piper Jaffray" is not a person but a firm?
Is it all relevant to the point I am making?
No, they don't make plenty of money on content and, no, they can't afford to lose money on a tablet. They made $1 billion in profit last year on $34 billion in revenue. At $50 loss per tablet, 20 million tablets/year would be $1 billion in losses. If Amazon is smart they're looking at the Kindle as a way to be move up, not as a loss leader for the razor thin margins of online retail.
I thought it went without saying that the $50/device figure is not an exact figure by any means. I was pointing out that Amazon does not need to make money on this device, and indeed, under certain circumstances could afford to lose money on each sold. If that sparks a significant tie-in of new revenue from ebooks, music, and other media (e.g. apps) it will be profitable and, additionally, will help to grow their addressable market. In fact, this alone might justify a more significant loss per device.
If they try to profit too much from the device they'll move closer to the iPad, and competing directly with the iPad would, I think it is reasonable to conclude at this time, would not be as successful. It is an option they might pursue down the road under the right circumstances.
It's your understanding rather than your maths that is off.
What was reported earlier is that an analyst estimated the Fire's bill of materials to be $180. That doesn't mean it costs Amazon $180 to make a Fire, it means if you add up the cost of the components that go into a Fire, it comes to $180. So that $180 doesn't include assembly costs, shipping, support, cost of returns/failures, R&D or overheads. If the BOM really is $180, I'd say it's an optimistic guess that Amazon loses only $50 per sale at $199 retail price.
Munster is just throwing out a figure whose only basis is the three seconds he gave himself to write it down. And AI is quoting it as a real figure, but it's not. Not only is it a total guess on his part, but he doesn't give any reason why it wouldn't be $100 or $1. It's a blogtalk byte, worse than info from a forum.
It is not obvious that Amazon has the capabilities (yet) for managing a supply and retail chain for hardware in the tens of millions. It took Apple decades of experience to get here in terms of such capabilities.
Looks like Munster is belatedly recognizing the same point when he says "..."supply chain, production and distribution capabilities." The other analysts are not quite there yet....
It's very interesting that Amazon chose to come out with this. It's a dangerous chance they're taking. They have no control over the buyers of this. What if they decide to not buy as much as Amazon needs to make a profit? And there's a very big misunderstanding as to what they have to do to make that profit. It won't be as easy as they think.
Who will want one of these extremely limited and small tablets? I wouldn't take it if it was free. For real viewing of video content, the screen is too small. If I'm going small, I'll take the new Samsung phone with a 4.3" screen (or is it 4.5"?). A 7" screen is neither here nor there, this nor that. Jobs is exactly right on this point. I see no upside on a 7" screen.
At this price, it will sell OK, but to whom? Probably to young kids who will see it as a "starter iPad" and who may download video and music content, but won't be big spenders and sure won't be buying e-books.
Why would anyone buy an entire phone dataplan contract when all they wanted was a bigger iPod? The only reason people are crowing about how unwanted a 7" tablet is is because no one has yet put out a decent one. I'd love a good 7" $200 tablet. It would be awesome for me. Not that I have much interest in a forked closed dead end old version of Android, but that just means the Fire won't be it for me.
Android folks rarely buy apps, nor do they buy music or movies, tv shows. If it takes 50$ on content PROFITS (not revenues alone!) to make a Fire profitable, than it takes 250$ on content PROFITS to get on par with a naked iPad. Most Fire buyers will never purchase that much.
The key thing with that tablet stuff is synergy between hardware AND content business. Each of the two parts can, no, SHOULD(!) halo sale the other part. It only makes sense when both parts are profitable, as with iOS. Amazon just wants to propel content business while subsidize hardware where Android subsidizes software and zero cost Google services (content) in order to generate hardware profits for the vendors.
It's like Apple would sell unlocked iPhones for 99$ just to halo Mac and iTunes sales. They don't do because they can afford it. It's like car business: Honda or Mercedes - Your customer segment is everything. Stick to it , can't escape it!
Build hardware for penny savers and want to earn money on luxury lifestyle goods like music, video and apps which you can all have for free somewhere and no one needs for living ? That doesn't make sense in a bigger picture.
Seems the Kindle Fire competes against the iPod Touch - and does it well for someone who wants a similar device with a larger screen- better for reading on.
I don't see this competing with the iPad at all.
I would have to play with one first thou before I make a judgement. Like SJ said about the first iPad; You have to hold one in your hand to understand it.
I don't see it competing with something with a 3.5" screen. It's competing with the Nookcolor, which has been a fair hit.
But I have held 7" tablets on my hand. You can also turn an iPad to horizontal when attempting to read a magazine to see how that smaller screen makes it very difficult. And that's the same with video. Hold the iPad horizontally to see the size of the video on a 7" model. It's very close. So even magazines and video will be better on an iPad. Ironic, in a way. Amazon's own content looks better on an Apple device.