JP Morgan: Kindle Fire is 'noise,' won't compete with Apple's iPad 2

Posted:
in iPad edited January 2014
Amazon's new Kindle Fire won't compete with Apple's iPad 2, and isn't even a lock to become the second-most-popular tablet on the market, one Wall Street analyst believes.



In a note issued to investors on Wednesday, Mark Moskowitz with J.P. Morgan said any claims that the Amazon will become the world's No. 2 tablet-maker are simply "noise." He said he's "not impressed" with the Kindle Fire, which was unveiled with a $199 price point on Wednesday.



Moskowitz said that he still doesn't see a major competitor to Apple's iPad in the tablet marketplace, as he feels Amazon's new color touchscreen tablet is a stepping stone "at best."



"Until we see how the Kindle Fire evolves, we are comfortable stating that the emergence of a major two tablet vendor remains elusive," the analyst wrote.



Moskowitz said he believes users have come to expect certain features in a tablet, and Amazon's device may not meet those expectations. He feels the Kindle Fire is more of a hybrid device than a true tablet.



"It is our view that for tablet vendors to win customers, a feature-rich, user-friendly tablet is a key requisite," he said.



The Amazon tablet has three main features that could win consumers: Amazon's proprietary user interface built around Android, content from Amazon Prime, and a low price point. However, Moskowitz said he doesn't feel that any of those are a game changers.



On the Fire's $199 price point, Moskowitz said it may attract early adopters, but he's wary of such momentum being sustained. He said the low price may in fact turn out to be a detriment in marketing the device to consumers.







"Kindle Fire's low price point speaks to how there is much lacking in the device," he said. "We argue that the price point is not going to afford most users a tablet-experience, which is a problem if Amazon wants to become a major tablet vendor."



The Kindle Fire's 7-inch screen, coupled with the absence of a camera, GPS and microphone, were listed as shortcomings when compared to similar devices such as the iPad. And because the device also lacks 3G connectivity, Moskowitz believes it could be a hybrid device leading the way for a more full-featured device.



Amazon is rumored to be working on a 10-inch tablet that will launch next year, as well as an 8.9-inch version with an "amazing form factor" for the second half of 2012. Reports have suggested Amazon is testing the market with the first Kindle Fire before potentially pursuing additional form factors next year.
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Comments

  • Reply 1 of 157
    Quote:
    Originally Posted by AppleInsider View Post


    In a note issued to investors on Wednesday, Mark Moskowitz with J.P. Morgan said he's "not impressed" with the Kindle Fire, which was unveiled with a $199 price point on Wednesday.






    ANALists.
  • Reply 2 of 157
    Fire's going to do well in sales because it's affordable and from a well known company.



    Can Amazon turn a profit on their services like Prime and the Amazon store is the question. They're making little to nothing on this hardware.
  • Reply 3 of 157
    Good to see a continuance of sound judgement flowing from the bowels of Wall Street.
  • Reply 4 of 157
    Quote:
    Originally Posted by hmurchison View Post


    They're making little to nothing on this hardware.



    Losing around $50 on each, I thought was the consensus.
  • Reply 5 of 157
    gatorguygatorguy Posts: 22,826member
    Quote:
    Originally Posted by Tallest Skil View Post


    Losing around $50 on each, I thought was the consensus.



    No, that was a guess by a single analyst.
  • Reply 5 of 157
    Quote:
    Originally Posted by Tallest Skil View Post


    Losing around $50 on each, I thought was the consensus.



    "We'll make it up in volume"



    lol.



    HP may as well keep selling the TouchPad at $99 indefinitely.
  • Reply 7 of 157
    All this sounds well and good, but where is his evidence to back up his statement? Why would anyone pay for an analyst's statement unless he can back up his hypothesis?



    Seems like it's all too easy to call oneself an analyst these days.
  • Reply 8 of 157
    apple ][apple ][ Posts: 9,233member
    Quote:
    Originally Posted by ConradJoe View Post


    ANALists.



    I call them ANALysts myself too sometimes, but you gotta admit, even a broken clock is correct twice a day, and in this case, the analyst happens to be right!



    I'm not claiming that the Kindle Fire is going to flop, far from it. I'm sure that there are plenty of poor people around, especially in this economy, who are going to be attracted to such a device. But, this Amazon mini Android tablet won't have any effect on iPads.
  • Reply 9 of 157
    Considering that Amazon never reveals how many Kindles it sells, we may never know if it's a blockbuster or a dud.
  • Reply 10 of 157
    ikolikol Posts: 369member
    It's also a slim slice/"noise"of Amazon's own pie. Like a $99 ATV- how much does Apple make on that? These are both merely vending machines/jukeboxes for their respective makers.

    Think of it as Jeff's /Amazon's hobby.
  • Reply 11 of 157
    New tech is funded by the sale of previous tech. In order for Amazon to evolve their "fire" their stuffy azz consumers will have to be progressive enough to always buy new Kindles all the time. I don't see that happening. Grandpa and grandma ain't playing that game. They aren't Android fanboys. That is just my two cents.
  • Reply 12 of 157
    wtf is wrong with this analyst.



    first off, the iPad2 shouldn't be compared to the Kindle Fire. They're at two completely different price points.



    secondly, the device isn't out yet to the masses. this guy is full of shitso.



    finally, NEVER, EVER, confide in analysts statements.
  • Reply 13 of 157
    In a way, Kindle Fire and iPad sit on the opposite spectrum. Apple provides contents ecosystem to make money from the hardware business. Amazon sells cheap hardware to make money from the contents business. So if you want good hardware and wide range of contents, you pay more and buy iPad. If you want cheap hardware and contents from Amazon, buy Kindle Fire.
  • Reply 14 of 157
    Quote:
    Originally Posted by Apple ][ View Post


    I call them ANALysts myself too sometimes, but you gotta admit, even a broken clock is correct twice a day, and in this case, the analyst happens to be right!



    I'm not claiming that the Kindle Fire is going to flop, far from it. I'm sure that there are plenty of poor people around, especially in this economy, who are going to be attracted to such a device. But, this Amazon mini Android tablet won't have any effect on iPads.



    The Kindle Fire isn't even aimed at poor people in my opinion. This is for educated wealthier over 30 people. Poor people want a device for $149 or less. Younger people want a device to do more... this is the smart phone generation.



    I agree with you that it won't be a flop but it also won't be a screaming success.
  • Reply 15 of 157
    snovasnova Posts: 1,281member
    Quote:
    Originally Posted by filburt View Post


    In a way, Kindle Fire and iPad sit on the opposite spectrum. Apple provides contents ecosystem to make money from the hardware business. Amazon sells cheap hardware to make money from the contents business. So if you want good hardware and wide range of contents, you pay more and buy iPad. If you want cheap hardware and contents from Amazon, buy Kindle Fire.



    +1



    Well said. Now.. what content does Amazon have the majority share on besides books?



    iTunes Music vs Amazon Music?

    Netflix vs Amazon Prime?

    Android App store or iTunes App store vs Amazon App store?



  • Reply 16 of 157
    It will be a flope but Bezos and company will report in adjectives and adverbs. Better than expected. Best product sales. Bezos will never give a number of units sold.



    The esteemed and honorable gentlemen will echo the same thing anmd provide hilarious estimates as to what sales are.



    The SEC is inutile (by design or by incompetence).
  • Reply 17 of 157
    Quote:
    Originally Posted by snova View Post


    +1



    Well said. Now.. what content does Amazon have the majority share on besides books?



    iTunes vs Amazon mp3?

    Netflix vs Amazon Prime?

    Android App store vs Amazon App store?







    Amazon owns the biggest movie rental company in Europe, who also offer streaming movies just like Netflix do:



    http://en.wikipedia.org/wiki/LoveFilm
  • Reply 18 of 157
    Quote:
    Originally Posted by ConradJoe View Post


    ANALists.



    It does help to spell well.
  • Reply 19 of 157
    Quote:
    Originally Posted by filburt View Post


    In a way, Kindle Fire and iPad sit on the opposite spectrum. Apple provides contents ecosystem to make money from the hardware business. Amazon sells cheap hardware to make money from the contents business. So if you want good hardware and wide range of contents, you pay more and buy iPad. If you want cheap hardware and contents from Amazon, buy Kindle Fire.



    This is what I don't understand. Apple claims that they don't make any money from iTunes sales. Amazon sells the same content, often at slightly lower prices. So, Amazon cannot be making much from its contents business. Amazon Prime at $79/mo is a fantastic deal for the customer. Must be a money loser for Amazon.



    Now, Apple has 35% plus margins on its hardware sales. If Amazon will be selling the Kindle Fire at a loss, its entire contents business (including hardware) will be a money loser for quite some time.



    Their strategy seems to be to increase share even if they lose money for a while. Pretty risky, I think.
  • Reply 20 of 157
    apple ][apple ][ Posts: 9,233member
    Quote:
    Originally Posted by island hermit View Post


    The Kindle Fire isn't even aimed at poor people in my opinion. This is for educated wealthier over 30 people. Poor people want a device for $149 or less. Younger people want a device to do more... this is the smart phone generation.



    I agree with you that it won't be a flop but it also won't be a screaming success.



    If somebody is wealthy, educated and over 30, then they probably already have an iPad!



    The original Kindle definitely caught on with people who were probably well educated and had money, because people who read a lot of books tend to be smarter than people who don't. That's just a personal observation. But I wonder if many of them will be attracted to the color Kindle, because I'm pretty sure that what made the original Kindles good was the e-ink screen and the huge battery life.
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