Analysts always predict that android is going to lead in the future which is probably is a logical view because tbey are only going to release like 300 different types of tablet and so eventually people are going to buy them just like they did with smartphone. Apple only has one tablet that it upgrades every year and they sell like hotcakes, that is something to boast about. But Android saturates the market with some crappy tablets and some good tablets with so many tablets consumer feel that its time to jump the boat and purchase one . The difference with Apple is that they win the customer they don't drown them in products. Hey I'm an Analyst hehehe.....*sarcasim*
With personal computers, Apple decided on exclusivity and price over market share, and Windows won the war. Hopefully (at least for them) they will not let the same thing happen with tablets. Should Amazon come out with a 10" fire for $350, does Apple respond? Or do they stubbornly stick with the high price for high quality model and watch the majority of buyers go for value?
Samsung has announced an 11.6 inch Galaxy Tab. I think that it will be a better size for couch potatoes than Apple's smaller screen. I predict that the pricing will be competitive with Apple's tablet.
And the 7 inch devices, especially the inexpensive ones, are better for commuting or the beach or trips to the playground with the kids.
Apple's tablet will continue to be popular, but it is no longer the only good choice. Indeed, even now there are better choices, like the Transformer Prime, and in the future, if Apple is as obstinate about excluding features and options for consumers as they have been in the past, they will dominate their niche, but abandon most buyers.
Considering the fact that Amazon is a publicly traded company, do they have a legal obligation to declare to investors how much money is made from each stream? Can they simply say that they made an overall profit of $x or do they have to declare the money made from their tablet sales and other sales?
If they do declare their profits/ losses based on tablets then there may a better idea as to how many are sold. At the same time, they would not subtract a sale if there was a return, so how does that figure out?
It figures out to keep some people guessing. Others consult the accounting rules or secondary sources which explain them. That is how it figures out.
If IDC's premise is true, then maybe Android developers can start focusing on tablet-sized interfaces that scale seamlessly from smaller screens to larger adding more interface elements as size allows.
I don't think that is what will happen though. I think Amazon will shut out other Android players with a superior content ecosystem and then move upmarket to challenge Apple all on Google's research dime. At around the same time, Microsoft's Windows 8 Metro will attack from the top end.
That will leave HTC, Samsung, Toshiba, Asus, Motorola, and Acer left standing but fighting for scraps.
This is what happens when you take a handheld Unix computer and cripple it so obscenely that a dinky E-reader can compete with it.
Apple is getting what it deserves, for idiotically hampering developers from doing most of what you'd expect an $800 portable computer to do. You know, crazy things like legitimate I/O, syncing data between apps and counterpart apps on the computer, proper Bluetooth support, access to the dock port...
Apple doesn't learn. They witnessed the demise of DRM, but learned nothing from it. When the stupidest executives on the planet (record-company execs) can learn something like that, you're a total disgrace if you keep pursuing anti-customer and anti-developer policies the way Apple does.
Apple has always stuck its head in the sand and pretended not to know what it needs to do to compete. Well, it's time to pull your head out of your ass, Apple.
Yup, apple is a failure. they are only the 2nd most valued (market cap) company in the world. They have the majority of the profits in the phone market and make the most profits in the PC market. And the mp3 market as well.
It baffles me how POS tablets and ereaders using Android or forks of Android sitting on store shelves account for "market share".
So if Microsoft threw together some piece of plastic that had Windows 7 on it and stored 100 million of them in a warehouse, but sold 100,000 of them, they'd have 50% market share?
Yes. Except Windows 7 needs to be given away for free to all hardware manufacturers.
Even if the Kindles is a POS, underpowered, low build quality, hobbled Android device, Amazon is playing the bragging rights game. The press will continually spout out the huge market share gains from Kindle and the huge market share lost of the iPad. Never mentioning the glaring inadequacies of the Kindle Fire and the real reason its sold at a loss.
Even if we pretend for a second that these two products are competing in the same market, market share still doesn't really matter. Profit share, and growing profit are what matters. iPad is way above 60% and will remain there by those measures for the foreseeable future.
It's much worse. Total bill of materials for the Fire is slightly higher than they sell for but that is only what they cost to MAKE. Then there are additional costs of marketing. packaging distribution and so on... Probably at least another $50. On top of that Amazon have razor thin margins on most of what they sell. The turnover is in the billions but the profit is only millions (single digit margins) so to start making money of of the fire they would have to sell content for hundreds of dollars to just break eaven. Someone has done the numbers and i think it was around $1250 or so...
If they want to make what Apple is making just on the iPad *hardware* (no content) they would need to add another $150 to that. Making the revenue they would have to make per Fire something around $5000.
Makes Apples current strategy look a bit more attractive right?
And remember, this is without any content revenue on the iPad.
Are you Amazon's accountant or financial analyst? I'm curious why anybody should believe your assertions.
Believe it or not, Amazon probably has at least a few competent folks who have worked out a business model for the Kindle Fire. Companies don't just invest millions (or billions) on a whim.
Since Amazon is selling just over 1 million per week in the US alone, when they go internationnal they will probably sell more Kindle than Apple is selling ipads.
But I just dont get there business model: folks are buying it because its very cheap and I am not sure they are the kind of people who will spend a lot in the ecosystem. Apple has a client base that spends a lot, on top of this Apple is taking a 30% cut and Itunes sales only returns about 8 billions per year out of 100+ billions in revenu.
The Amazon stock is trading at 100 P/E. Do not touch that thing, its going to crash at some point just like netflix.
One thing is sure, people dont want to pay prices that are almost the same of the ipad for an android tablet. On the other hand, there is an hunger for cheap tablets sold buy "known" manufacturers.
Except that folks who owned previous Kindle devices actually did buy a lot of content.
And with "one click" you can bet that the Kindle will sell a lot of apps, books, movies, etc.
I know it's hard to believe for some in these parts. But not everybody needs to buy a $500 tablet just so they can buy $5 apps. There is a price/capability threshold that is good enough for the average consumer. And the Kindle Fire is it. Once they get it, users will spend on content. I am betting that this will prove to be one of the smartest things Amazon ever did.
Except that folks who owned previous Kindle devices actually did buy a lot of content.
And with "one click" you can bet that the Kindle will sell a lot of apps, books, movies, etc.
I know it's hard to believe for some in these parts. But not everybody needs to buy a $500 tablet just so they can buy $5 apps. There is a price/capability threshold that is good enough for the average consumer. And the Kindle Fire is it. Once they get it, users will spend on content. I am betting that this will prove to be one of the smartest things Amazon ever did.
I think that is why the Fire will see some success because Amazon is skimming off the low end of people for whom the iPad is more capability than is needed. As far as consumption the only things it fails at are Magazines and comic books. It browses, it plays the more popular Android games that Amazon curates and chooses to sell, it gives you movies, TV and eBooks. That is a significant chunk of iPad usage right there.
I can see a parent buying an iPad for themselves and a Kindle or Kindle Fire for their children because it is "good enough" until they need an iPad for school textbooks or something like that.
Worse that him not knowing what he is talking about, his wife is clearly a useless teacher with zero understanding of the potential of a interactive system such as the iPad offers for education. She is limiting the concept to an alternative for a reading device. Sad, very sad such people are allowed near children.
It's actually worse than that. His wife is an instructional coach - and is responsible for teaching other teachers how to teach. The fact that she's apparently incapable of imagining anything different than the status quo is scary.
Quote:
Originally Posted by Gatorguy
Trying to guess what Amazon actually paid for each Fire doesn't make that figure a fact.
Did Amazon get a big discount since they were willing to use the old basic Playbook platform instead of starting from scratch? Is the iSuppli component pricing verified/adjusted based on quantities purchased for a particular device build? How much profit does Amazon see from a typical e-book purchase? Is it more or less percentage-wise than what they realize from hard products? Is Amazon getting related advertising revenue from clicks in their Silk browser? Is Amazon better at controlling packaging/handling costs than Apple or getting better shipping terms? Is Amazon getting a better hardware deal because they were willing to pay upfront? Do they get a more favorable price because of volume commitments, just as some here claim Apple does? Even the build estimates from various sources swing nearly 40% from either extreme ($150 to around $210, and there may even be higher ones). Which ones are somewhat accurate?
If you don't know the factual answers to most of those questions, then you're making your best educated estimate whether Amazon is making a profit or losing a boatload every time they sell one. Stating as a fact that Amazon is losing at least x-number of dollars on hardware, or needs to sell x-volume of content to break even is all good guessing at best.
I'm not making the estimates. Values of $200 to $250 for the bill of materials have been published all over the web by various people And all of them have clearly factored in volume discounts since they're using volume pricing rather than list prices.
For comparison, when the same people do iPad BOM estimates, they're always way below the actual cost of production - which is available from Apple's reports. So if they're significantly underestimating costs for Apple (who sells fare more iPads than Amazon sells Fires), what makes you think that they're OVERestimating Fire production costs?
I think that is why the Fire will see some success because Amazon is skimming off the low end of people for whom the iPad is more capability than is needed. As far as consumption the only things it fails at are Magazines and comic books. It browses, it plays the more popular Android games that Amazon curates and chooses to sell, it gives you movies, TV and eBooks. That is a significant chunk of iPad usage right there.
I can see a parent buying an iPad for themselves and a Kindle or Kindle Fire for their children because it is "good enough" until they need an iPad for school textbooks or something like that.
Exactly. I see the Fire as being purchased by two groups of people:
1. People who would never have spent the $500-800 for an iPad, anyway, so the Fire does not impact iPad sales in this group.
2. People who already have an iPad and buy a Fire as a secondary device. This could have an impact on Apple's market share if they would have bought a second iPad, otherwise. Many of these people will eventually buy another iPad, anyway and some may be disappointed with the Fire because of its limitations. Or, they may be perfectly happy having a combination of devices.
Only time will tell the results from those different groups. In the end, though, I suspect that:
1. Kindle Fire will do well in terms of total sales. Given that its price is 40% of the low end iPad, there will be people who can live with its limitations.
2. Amazon will eventually increase the price (probably spring or summer when the v 2.0 comes out) to try to eke out some profitability after they've established themselves as a serious player.
Exactly. I see the Fire as being purchased by two groups of people:
1. People who would never have spent the $500-800 for an iPad, anyway, so the Fire does not impact iPad sales in this group.
But if these Fire owners find that the tablet category is something they like they could easily want a larger, more full featured tablet for their next purchase. Hence, I think the Fire will ultimately help non-crippled tablet sales, which is why I think Amazon needs to grow their brand within a year to prevent that from happening.
I'm not making the estimates. Values of $200 to $250 for the bill of materials have been published all over the web by various people And all of them have clearly factored in volume discounts since they're using volume pricing rather than list prices.
For comparison, when the same people do iPad BOM estimates, they're always way below the actual cost of production - which is available from Apple's reports. So if they're significantly underestimating costs for Apple (who sells fare more iPads than Amazon sells Fires), what makes you think that they're OVERestimating Fire production costs?
I'm not making the estimates either, which have ranged from $150 and up. With different sources reporting different costs for the identically same component, just who is right? Perhaps none of them.
As for Apple's costs actually being higher than the BOM's reported by iSuppli and such, I get the impression you're in management or have owned your own business. If so, you know that cost accounting can be adjusted to show higher or lower costs/profits depending on what the purpose of the figures are. I certainly report them differently depending on whether it's intended for tax purposes, internal planning or used to influence a customer's buying decisions (perhaps by minimizing how much profit you're making from them). It doesn't make any of the figures a lie, it's just different accounting and reporting methods.
For reference, here's another BOM estimate from TechInsights. They're also considered a reputable source along with iSuppli:
I don't think Amazon will increase the price. It would not help them challenge Apple or other Android OEMs. I see Amazon releasing an 10 inch tablet next year for $299.
The Kindle Fire's most profitable pitch is Prime. If they are losing $5 per device (and reports say it's less than that), at $80 per year, if even 1 in 10 Kindle Fire purchasers subscribe to Prime, Amazon will come out on top. Contrary to popular belief, these devices just aren't that expensive to manufacture. Amazon has such a bare bones basic device. The software was free, other than the costs of skinning Android for the Kindle Fire.
I don't think it will hurt iPad sales that much. But that's simply because Apple has a knack for opening new markets. But in my mind, there will surely be some substitution going on. Anybody who just wanted a tablet to read or surf the web will surely consider the Kindle Fire to be a reasonable substitute. Put yourself in the shoes of the average consumer (non-Apple fan) and you'll begin to see how reasonable $199 looks for surfing, reading and watching movies. Especially, if you already get a lot of content from Amazon.
But if apps are a big focus then undoubtedly the iPad is king. If you want a bigger screen, the iPad wins out. Basically, for anything other than the most basic media consumption, the iPad wins.
Lastly, there's kids. Most folks here might chance it. Most real world parents are averse to giving kids a $500 device to play with. A $199 tablet with a few apps and movies for the kids, is good enough for long car or plane rides. And at that price, you can get each kid their own, instead of making all the siblings share an iPad.
But if these Fire owners find that the tablet category is something they like they could easily want a larger, more full featured tablet for their next purchase. Hence, I think the Fire will ultimately help non-crippled tablet sales, which is why I think Amazon needs to grow their brand within a year to prevent that from happening.
Isn't that exactly what Apple paid some flak to say a few days ago?
Even if the Kindles is a POS, underpowered, low build quality, hobbled Android device, Amazon is playing the bragging rights game. The press will continually spout out the huge market share gains from Kindle and the huge market share lost of the iPad. Never mentioning the glaring inadequacies of the Kindle Fire and the real reason its sold at a loss.
If amazon wanted bragging rights, they would have released actual numbers. They haven't, so far, for the Kindle and I doubt they will for the Fire. "Millions and millions" is not an actual number.
Comments
With personal computers, Apple decided on exclusivity and price over market share, and Windows won the war. Hopefully (at least for them) they will not let the same thing happen with tablets. Should Amazon come out with a 10" fire for $350, does Apple respond? Or do they stubbornly stick with the high price for high quality model and watch the majority of buyers go for value?
Samsung has announced an 11.6 inch Galaxy Tab. I think that it will be a better size for couch potatoes than Apple's smaller screen. I predict that the pricing will be competitive with Apple's tablet.
And the 7 inch devices, especially the inexpensive ones, are better for commuting or the beach or trips to the playground with the kids.
Apple's tablet will continue to be popular, but it is no longer the only good choice. Indeed, even now there are better choices, like the Transformer Prime, and in the future, if Apple is as obstinate about excluding features and options for consumers as they have been in the past, they will dominate their niche, but abandon most buyers.
We should add new category, NetTablet for cheap disposable Android tablet.
If we did, then we could claim that Apple has a MUCH larger market share!
That's the ticket!
Considering the fact that Amazon is a publicly traded company, do they have a legal obligation to declare to investors how much money is made from each stream? Can they simply say that they made an overall profit of $x or do they have to declare the money made from their tablet sales and other sales?
If they do declare their profits/ losses based on tablets then there may a better idea as to how many are sold. At the same time, they would not subtract a sale if there was a return, so how does that figure out?
It figures out to keep some people guessing. Others consult the accounting rules or secondary sources which explain them. That is how it figures out.
I don't think that is what will happen though. I think Amazon will shut out other Android players with a superior content ecosystem and then move upmarket to challenge Apple all on Google's research dime. At around the same time, Microsoft's Windows 8 Metro will attack from the top end.
That will leave HTC, Samsung, Toshiba, Asus, Motorola, and Acer left standing but fighting for scraps.
But next quarter when the iPad 3 comes out folks will be buying bazillions, flooding the market and putting Apple back up at their typical 90%.
This is what happens when you take a handheld Unix computer and cripple it so obscenely that a dinky E-reader can compete with it.
Apple is getting what it deserves, for idiotically hampering developers from doing most of what you'd expect an $800 portable computer to do. You know, crazy things like legitimate I/O, syncing data between apps and counterpart apps on the computer, proper Bluetooth support, access to the dock port...
Apple doesn't learn. They witnessed the demise of DRM, but learned nothing from it. When the stupidest executives on the planet (record-company execs) can learn something like that, you're a total disgrace if you keep pursuing anti-customer and anti-developer policies the way Apple does.
Apple has always stuck its head in the sand and pretended not to know what it needs to do to compete. Well, it's time to pull your head out of your ass, Apple.
Yup, apple is a failure. they are only the 2nd most valued (market cap) company in the world. They have the majority of the profits in the phone market and make the most profits in the PC market. And the mp3 market as well.
It baffles me how POS tablets and ereaders using Android or forks of Android sitting on store shelves account for "market share".
So if Microsoft threw together some piece of plastic that had Windows 7 on it and stored 100 million of them in a warehouse, but sold 100,000 of them, they'd have 50% market share?
Yes. Except Windows 7 needs to be given away for free to all hardware manufacturers.
It's much worse. Total bill of materials for the Fire is slightly higher than they sell for but that is only what they cost to MAKE. Then there are additional costs of marketing. packaging distribution and so on... Probably at least another $50. On top of that Amazon have razor thin margins on most of what they sell. The turnover is in the billions but the profit is only millions (single digit margins) so to start making money of of the fire they would have to sell content for hundreds of dollars to just break eaven. Someone has done the numbers and i think it was around $1250 or so...
If they want to make what Apple is making just on the iPad *hardware* (no content) they would need to add another $150 to that. Making the revenue they would have to make per Fire something around $5000.
Makes Apples current strategy look a bit more attractive right?
And remember, this is without any content revenue on the iPad.
Are you Amazon's accountant or financial analyst? I'm curious why anybody should believe your assertions.
Believe it or not, Amazon probably has at least a few competent folks who have worked out a business model for the Kindle Fire. Companies don't just invest millions (or billions) on a whim.
Since Amazon is selling just over 1 million per week in the US alone, when they go internationnal they will probably sell more Kindle than Apple is selling ipads.
But I just dont get there business model: folks are buying it because its very cheap and I am not sure they are the kind of people who will spend a lot in the ecosystem. Apple has a client base that spends a lot, on top of this Apple is taking a 30% cut and Itunes sales only returns about 8 billions per year out of 100+ billions in revenu.
The Amazon stock is trading at 100 P/E. Do not touch that thing, its going to crash at some point just like netflix.
One thing is sure, people dont want to pay prices that are almost the same of the ipad for an android tablet. On the other hand, there is an hunger for cheap tablets sold buy "known" manufacturers.
Except that folks who owned previous Kindle devices actually did buy a lot of content.
And with "one click" you can bet that the Kindle will sell a lot of apps, books, movies, etc.
I know it's hard to believe for some in these parts. But not everybody needs to buy a $500 tablet just so they can buy $5 apps. There is a price/capability threshold that is good enough for the average consumer. And the Kindle Fire is it. Once they get it, users will spend on content. I am betting that this will prove to be one of the smartest things Amazon ever did.
Except that folks who owned previous Kindle devices actually did buy a lot of content.
And with "one click" you can bet that the Kindle will sell a lot of apps, books, movies, etc.
I know it's hard to believe for some in these parts. But not everybody needs to buy a $500 tablet just so they can buy $5 apps. There is a price/capability threshold that is good enough for the average consumer. And the Kindle Fire is it. Once they get it, users will spend on content. I am betting that this will prove to be one of the smartest things Amazon ever did.
I think that is why the Fire will see some success because Amazon is skimming off the low end of people for whom the iPad is more capability than is needed. As far as consumption the only things it fails at are Magazines and comic books. It browses, it plays the more popular Android games that Amazon curates and chooses to sell, it gives you movies, TV and eBooks. That is a significant chunk of iPad usage right there.
I can see a parent buying an iPad for themselves and a Kindle or Kindle Fire for their children because it is "good enough" until they need an iPad for school textbooks or something like that.
Worse that him not knowing what he is talking about, his wife is clearly a useless teacher with zero understanding of the potential of a interactive system such as the iPad offers for education. She is limiting the concept to an alternative for a reading device. Sad, very sad such people are allowed near children.
It's actually worse than that. His wife is an instructional coach - and is responsible for teaching other teachers how to teach. The fact that she's apparently incapable of imagining anything different than the status quo is scary.
Trying to guess what Amazon actually paid for each Fire doesn't make that figure a fact.
Did Amazon get a big discount since they were willing to use the old basic Playbook platform instead of starting from scratch? Is the iSuppli component pricing verified/adjusted based on quantities purchased for a particular device build? How much profit does Amazon see from a typical e-book purchase? Is it more or less percentage-wise than what they realize from hard products? Is Amazon getting related advertising revenue from clicks in their Silk browser? Is Amazon better at controlling packaging/handling costs than Apple or getting better shipping terms? Is Amazon getting a better hardware deal because they were willing to pay upfront? Do they get a more favorable price because of volume commitments, just as some here claim Apple does? Even the build estimates from various sources swing nearly 40% from either extreme ($150 to around $210, and there may even be higher ones). Which ones are somewhat accurate?
If you don't know the factual answers to most of those questions, then you're making your best educated estimate whether Amazon is making a profit or losing a boatload every time they sell one. Stating as a fact that Amazon is losing at least x-number of dollars on hardware, or needs to sell x-volume of content to break even is all good guessing at best.
I'm not making the estimates. Values of $200 to $250 for the bill of materials have been published all over the web by various people And all of them have clearly factored in volume discounts since they're using volume pricing rather than list prices.
For comparison, when the same people do iPad BOM estimates, they're always way below the actual cost of production - which is available from Apple's reports. So if they're significantly underestimating costs for Apple (who sells fare more iPads than Amazon sells Fires), what makes you think that they're OVERestimating Fire production costs?
I think that is why the Fire will see some success because Amazon is skimming off the low end of people for whom the iPad is more capability than is needed. As far as consumption the only things it fails at are Magazines and comic books. It browses, it plays the more popular Android games that Amazon curates and chooses to sell, it gives you movies, TV and eBooks. That is a significant chunk of iPad usage right there.
I can see a parent buying an iPad for themselves and a Kindle or Kindle Fire for their children because it is "good enough" until they need an iPad for school textbooks or something like that.
Exactly. I see the Fire as being purchased by two groups of people:
1. People who would never have spent the $500-800 for an iPad, anyway, so the Fire does not impact iPad sales in this group.
2. People who already have an iPad and buy a Fire as a secondary device. This could have an impact on Apple's market share if they would have bought a second iPad, otherwise. Many of these people will eventually buy another iPad, anyway and some may be disappointed with the Fire because of its limitations. Or, they may be perfectly happy having a combination of devices.
Only time will tell the results from those different groups. In the end, though, I suspect that:
1. Kindle Fire will do well in terms of total sales. Given that its price is 40% of the low end iPad, there will be people who can live with its limitations.
2. Amazon will eventually increase the price (probably spring or summer when the v 2.0 comes out) to try to eke out some profitability after they've established themselves as a serious player.
Exactly. I see the Fire as being purchased by two groups of people:
1. People who would never have spent the $500-800 for an iPad, anyway, so the Fire does not impact iPad sales in this group.
But if these Fire owners find that the tablet category is something they like they could easily want a larger, more full featured tablet for their next purchase. Hence, I think the Fire will ultimately help non-crippled tablet sales, which is why I think Amazon needs to grow their brand within a year to prevent that from happening.
I'm not making the estimates. Values of $200 to $250 for the bill of materials have been published all over the web by various people And all of them have clearly factored in volume discounts since they're using volume pricing rather than list prices.
For comparison, when the same people do iPad BOM estimates, they're always way below the actual cost of production - which is available from Apple's reports. So if they're significantly underestimating costs for Apple (who sells fare more iPads than Amazon sells Fires), what makes you think that they're OVERestimating Fire production costs?
I'm not making the estimates either, which have ranged from $150 and up. With different sources reporting different costs for the identically same component, just who is right? Perhaps none of them.
As for Apple's costs actually being higher than the BOM's reported by iSuppli and such, I get the impression you're in management or have owned your own business. If so, you know that cost accounting can be adjusted to show higher or lower costs/profits depending on what the purpose of the figures are. I certainly report them differently depending on whether it's intended for tax purposes, internal planning or used to influence a customer's buying decisions (perhaps by minimizing how much profit you're making from them). It doesn't make any of the figures a lie, it's just different accounting and reporting methods.
For reference, here's another BOM estimate from TechInsights. They're also considered a reputable source along with iSuppli:
http://www.eetimes.com/electronics-n...BoM-about--143
For those too busy to follow the link, they claim that further inspection of the Fire shows the BOM should really be $143.
The Kindle Fire's most profitable pitch is Prime. If they are losing $5 per device (and reports say it's less than that), at $80 per year, if even 1 in 10 Kindle Fire purchasers subscribe to Prime, Amazon will come out on top. Contrary to popular belief, these devices just aren't that expensive to manufacture. Amazon has such a bare bones basic device. The software was free, other than the costs of skinning Android for the Kindle Fire.
I don't think it will hurt iPad sales that much. But that's simply because Apple has a knack for opening new markets. But in my mind, there will surely be some substitution going on. Anybody who just wanted a tablet to read or surf the web will surely consider the Kindle Fire to be a reasonable substitute. Put yourself in the shoes of the average consumer (non-Apple fan) and you'll begin to see how reasonable $199 looks for surfing, reading and watching movies. Especially, if you already get a lot of content from Amazon.
But if apps are a big focus then undoubtedly the iPad is king. If you want a bigger screen, the iPad wins out. Basically, for anything other than the most basic media consumption, the iPad wins.
Lastly, there's kids. Most folks here might chance it. Most real world parents are averse to giving kids a $500 device to play with. A $199 tablet with a few apps and movies for the kids, is good enough for long car or plane rides. And at that price, you can get each kid their own, instead of making all the siblings share an iPad.
But if these Fire owners find that the tablet category is something they like they could easily want a larger, more full featured tablet for their next purchase. Hence, I think the Fire will ultimately help non-crippled tablet sales, which is why I think Amazon needs to grow their brand within a year to prevent that from happening.
Isn't that exactly what Apple paid some flak to say a few days ago?
Even if the Kindles is a POS, underpowered, low build quality, hobbled Android device, Amazon is playing the bragging rights game. The press will continually spout out the huge market share gains from Kindle and the huge market share lost of the iPad. Never mentioning the glaring inadequacies of the Kindle Fire and the real reason its sold at a loss.
If amazon wanted bragging rights, they would have released actual numbers. They haven't, so far, for the Kindle and I doubt they will for the Fire. "Millions and millions" is not an actual number.