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.
Mostly correct, but I question the bolded part.
Amazon HOPES to make money on the services and software. There's no evidence yet that they make anywhere near enough to cover losses on the hardware, much less make a reasonable profit.
(Note: Amazon is down more than 3.5 points so far today while Apple is up more than 5.
Amazon said that they were shipping 1 M Kindles per week - of all types combined. The Fire was out for 6 weeks. So how in the world could anyone plausibly conclude that there were 6 million Fires sold?
by pulling numbers out of his butt. like so many of these pretend "analysts" do.
but one thing everyone does agree about: the Fire killed sales of all the other Android tabs. like the Xoom, just 200,000 "shipped" same quarter. at least Moto had the guts to report that. Samsung ain't talking about its Galaxy, but there had to be awful numbers for them too.
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.
Good analysis. Definitely bad news for Googe!
Where do Steifel Nicolaus get their Kindle sales numbers from? Amazon have so far refused to disclose them?
Interesting contrasting strategies?
Amazon sells Kindle Fires at a loss, hoping to make up the losses from sales of media, a large amount of which they are giving away for free and the remainder on razor thin margins of around 2%?
Apple sell every iPad with a hefty profit margin and make 30% margin on much of the media they sell.? Media sales forms only a small part of Apple's total profits. Apple is well able to drop they media selling prices dramatically without significantly affecting their bottom line. But how would this affect Amazon's strategy to recover their losses from Kindle Fire subsidies?
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.
By the same token, reversing the tables, assuming Apple and Amazon pay the same for their content, Apple could drop their content prices to just break even. According to Apple they barely make money on the content but I am sure there is some room for manoeuvre. I can't see this happening as Apple just doesn't need to do it.... but if they did Amazon would be in trouble
Everybody I know who bought a Kindle Fire returned it and bought an iPad.
I have seen 2-3 in steady use at the local coffee shop. Still greatly outnumbered by iPads but a respectable showing and the users seem to like the Fire.
Everybody I know who bought a Kindle Fire returned it and bought an iPad.
How many people would that be exactly?
Quote:
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.
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.
No, it isn't. Amazon ships and sells through other retailers, and there were many Kindle Fire returns. While I am sure they did sell a pretty hefty number, shipped is not sold in this case.
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.
yup. as Amazon, Facebook, and big OEM's like Samsung, LG, and Sony all rush to establish their own "walled garden" "ecosystems" of hardware/services, trying to replicate what Apple has as much as they can, Google is getting left out in the cold. they might use some forked version of Android, but not the Google+/cloud version.
for years Google ripped off everyone else and laughed all the way to the bank. so now, turnabout is fair play too.
I understand that these analysts get paid a lot of money for their reports. Maybe that's why they feel obligated to write such obfuscated language. 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.
The poorer the quality of the meat -- the more spices you put on it!
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 could probably provide a lower end iPad that performs reasonably well sometime in the next year without usability sacrifices to add competition on the (previously nonexistent) low-end of the market.
I think it may be more interesting if Apple creates a scaled up version of the iPod Touch to compete with the fire. No iPad apps, but would work fine for iBooks, movies and games. The retina display resolution on the iPod touch gives them a lot of leeway to create a 7" device with a reasonable (non-retina) resolution. With all the rumors of a 7" iPad, I wonder if Apple may be experimenting with a larger iPod Touch. Downsizing the iPad doesn't make any sense because that would put a lot of extra burden on developers. Making the iPod touch larger would just work. I bet Apple could match (or at least be in the ballpark of) the price of the fire without subsidizing. I think it makes sense to have a big and small iPod touch and a retina and non-retina iPad. A big iPod touch would work well as a gateway device before getting a real iPad and it would also be appealing to families buying devices for children.
Of course if Apple didn't respond at all, the Fire could work to kill innovation in the Android market because developers would have no incentive to target the last two major releases of Android. However, this may just work in the short run. It would make sense that Amazon would refresh the Fire with newer hardware eventually and update the operating system to something newer. Regardless, Amazon may completely take over the Android market. That isn't necessarily good for Apple because it would provide a strong competitor instead of many weak competitors. It also isn't good for Google, but I don't see a clear way Google will come out ahead in the tablet market no matter what happens.
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...
Competition? What planet are you from anyway? Is KIA competing with BMW? Two completely different markets. I really don't grok posts like yours.
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."
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).
Comments
Wow! Six million KFs, each sold at a loss. Impressive.
Everybody I know who bought a Kindle Fire returned it and bought an iPad.
Wow! Six million KFs, each sold at a loss. Impressive.
Everybody I know who bought a Kindle Fire returned it and bought an iPad.
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.
Mostly correct, but I question the bolded part.
Amazon HOPES to make money on the services and software. There's no evidence yet that they make anywhere near enough to cover losses on the hardware, much less make a reasonable profit.
(Note: Amazon is down more than 3.5 points so far today while Apple is up more than 5.
Looks like Rohan can't read.
Amazon said that they were shipping 1 M Kindles per week - of all types combined. The Fire was out for 6 weeks. So how in the world could anyone plausibly conclude that there were 6 million Fires sold?
by pulling numbers out of his butt. like so many of these pretend "analysts" do.
but one thing everyone does agree about: the Fire killed sales of all the other Android tabs. like the Xoom, just 200,000 "shipped" same quarter. at least Moto had the guts to report that. Samsung ain't talking about its Galaxy, but there had to be awful numbers for them too.
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.
Good analysis. Definitely bad news for Googe!
Where do Steifel Nicolaus get their Kindle sales numbers from? Amazon have so far refused to disclose them?
Interesting contrasting strategies?
Amazon sells Kindle Fires at a loss, hoping to make up the losses from sales of media, a large amount of which they are giving away for free and the remainder on razor thin margins of around 2%?
Apple sell every iPad with a hefty profit margin and make 30% margin on much of the media they sell.? Media sales forms only a small part of Apple's total profits. Apple is well able to drop they media selling prices dramatically without significantly affecting their bottom line. But how would this affect Amazon's strategy to recover their losses from Kindle Fire subsidies?
In tablets it is an Apple/Amazon game.
The interesting aspect of Amazon, however, is they have fully forked Android and cut out Google from very lucrative advertising streams.
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.
By the same token, reversing the tables, assuming Apple and Amazon pay the same for their content, Apple could drop their content prices to just break even. According to Apple they barely make money on the content but I am sure there is some room for manoeuvre. I can't see this happening as Apple just doesn't need to do it.... but if they did Amazon would be in trouble
Everybody I know who bought a Kindle Fire returned it and bought an iPad.
I have seen 2-3 in steady use at the local coffee shop. Still greatly outnumbered by iPads but a respectable showing and the users seem to like the Fire.
Everybody I know who bought a Kindle Fire returned it and bought an iPad.
How many people would that be exactly?
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.
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.
I`m an Apple fan but am heavily invested in the Amazon ecosystem and I`m telling you this strategy is making them money.
I`ve spent a couple hours on one of these things and they`re fast, intuitive, and sensitive.
It`s actually the best Android tablet I`ve seen yet.
For Amazon... shipped is sold.
No, it isn't. Amazon ships and sells through other retailers, and there were many Kindle Fire returns. While I am sure they did sell a pretty hefty number, shipped is not sold in this case.
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.
yup. as Amazon, Facebook, and big OEM's like Samsung, LG, and Sony all rush to establish their own "walled garden" "ecosystems" of hardware/services, trying to replicate what Apple has as much as they can, Google is getting left out in the cold. they might use some forked version of Android, but not the Google+/cloud version.
for years Google ripped off everyone else and laughed all the way to the bank. so now, turnabout is fair play too.
I understand that these analysts get paid a lot of money for their reports. Maybe that's why they feel obligated to write such obfuscated language. 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.
The poorer the quality of the meat -- the more spices you put on it!
I think it may be more interesting if Apple creates a scaled up version of the iPod Touch to compete with the fire. No iPad apps, but would work fine for iBooks, movies and games. The retina display resolution on the iPod touch gives them a lot of leeway to create a 7" device with a reasonable (non-retina) resolution. With all the rumors of a 7" iPad, I wonder if Apple may be experimenting with a larger iPod Touch. Downsizing the iPad doesn't make any sense because that would put a lot of extra burden on developers. Making the iPod touch larger would just work. I bet Apple could match (or at least be in the ballpark of) the price of the fire without subsidizing. I think it makes sense to have a big and small iPod touch and a retina and non-retina iPad. A big iPod touch would work well as a gateway device before getting a real iPad and it would also be appealing to families buying devices for children.
Of course if Apple didn't respond at all, the Fire could work to kill innovation in the Android market because developers would have no incentive to target the last two major releases of Android. However, this may just work in the short run. It would make sense that Amazon would refresh the Fire with newer hardware eventually and update the operating system to something newer. Regardless, Amazon may completely take over the Android market. That isn't necessarily good for Apple because it would provide a strong competitor instead of many weak competitors. It also isn't good for Google, but I don't see a clear way Google will come out ahead in the tablet market no matter what happens.
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...
Competition? What planet are you from anyway? Is KIA competing with BMW? Two completely different markets. I really don't grok posts like yours.
Well said.
Yah, expect for confusing affect and effect...
Competition? What planet are you from anyway? Is KIA competing with BMW? Two completely different markets. I really don't grok posts like yours.
Apple has no competition.
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).