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.
But again, how do you account for profits from different business models? Amazon makes money selling content not hardware. Even with Android it's not so clear cut. Apple takes the whole profit from its hardware sales. With Android, the OEMs get some for their hardware, Google makes some from its services. But how do you account for second-order effects? Android devices hook people into the ecosystem. They may stay there even if they don't use Android after that first device.
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.
It is worth noting that this is over a million Kindle products per week, not Kindle Fire specifically. They could be selling 800k of the other Kindle models and only selling 200k Kindle Fire and their statement would still be accurate.
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.
BLAH BLAH.....
Two pieces of advice: (i) Stop posting tripe; (ii) If you want to do that, at least take the trouble to read and digest the conversation that has transpired before.
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.
The Fire is an experiment. If Amazon gets the returns expected in content sales then maybe it will go international.
Two pieces of advice: (i) Stop posting tripe; (ii) If you want to do that, at least take the trouble to read and digest the conversation that has transpired before.
Two statements for you:
(i) Last I checked you don't run this place and your opinions carry no more weight than anybody elses. So you getting your panties in a bunch over the value of my posting is irrelevant.
(ii) I did read the entire thread and I was responding to somebody's previous comment, even though I didn't quote it. I can't help it if you are incapable of deriving the context from my post.
I would argue that the Fire is so modified that should not be considered Android. Amazon took the core Android code and completely re-written the UI layer and in turn removed all the Google services. Google makes ~ $0 from Fire sales
The jury is out if selling the Fire at a lose is a sustainable strategy. Amazon is likely losing $30 to $40 for every Fire sold at retail stores
The many things people lump together as ?the? Android market/user base/etc. are often misleading! And still true in some sense, if you find it interesting to consider all the things out there derived from Android* (like the Fire and various non-standard Asian versions; platforms that don?t run Android market apps). But a bunch of devices that aren?t compatible with each other, from totally different companies, do not make a ?platform? in the way iOS is.
* Actually you could consider all Android devices derived from iOS, too! Android wouldn?t exist in anything but name (if that) if it weren?t for copying iOS.
So I consider the touch-OS market to consist of Apple-derived platforms + a tiny slice for Windows Metro
...In other news, IDC repports that Huffy's share of the personal transportation market has risen to 7.25% And that the Hispano-Suiza was next with 0.12% -- despite the fact it was discontinued in 1936.
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?
As a peon in a large corporation I saw this first hand. Mind you this was not an electronics concern. In the end such moves almost put us out of business. So yeah deceptive practices like this are common.
In the case of Amazon though I do believe that initially they sold a large number of Fires but that has changed drastically as people have seen the poor reception for the device. In the end the competition is good for Apple, hopefully the new iPad models will reflect this. This is especially the case when things like Fire demonstrate just how well designed and support iPad is.
Also let's not forget that there is a huge difference in who these devices target. E-Readers really should be in a category of their own. From my perspective and E-Reader like Kindle is a legitimate device in its own right but really isn't in the same category as iPad.
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.
You are right. Apple is anti-customer. You can see it in their stock price, analyst projections and actual sales, dismal as they are. Pitiful. Just pitiful. /sarcasm
My wife works in education as an instructional coach (helping teachers be better is the simplest way to describe her job). The district is considering buying them iPads. My wife says that the iPad is overkill for their needs.
If you know you aren't going to need and use all the features of the iPad and you are looking to control expenditures then one of those other tablet like devices might be the correct choice.
Kind of like why buy a car that can go 200 mph when you know you are only going to drive 75?
Of course some of the people want the iPad just because it is the coolest thing out there. Even though they don't make sense in this instance. These are the type of people you don't want in charge of spending the taxpayer money the district runs on.
That would be overkill ... For what theyvdo now. How about for tomorrow when there are new uses? After all, that is what tends to happen when new technology is introduced into an organization. Bright people are challenged to find new and better uses for the technology.
Times change. Saddling an organization with a solution that fits now is not always the best solution. Doing so tends to stifle growth.
I would argue that the Fire is so modified that should not be considered Android. Amazon took the core Android code and completely re-written the UI layer and in turn removed all the Google services. Google makes ~ $0 from Fire sales
Exactly. People keep comparing Android to Windows circa 1990, but there's the critical difference. Microsoft maintained an iron-grip on Windows and there weren't dozens of forks and variations and proprietary UI layers in the mix. The hardware varied back then but the OS didn't. Windows and PCs were a one-to-many relationship. Android and the hardware is turning into a many-to-many relationship. If Android is going to mutate like this, it's sort of disingenuous to group all these variations under one name.
There are more recent figures on Fire costs which is estimated to be around $200 per device to make. So they are probably losing $1 per device. Amazon only need to sell three songs or half a book to make that up.
But you are right about Fire not being real android. I think it should be classed as a breakaway and figures kept seperately for both OSes.
Amazon has to pay a margin to the retailers.. I think I read that KF is available in 16,000 points of sale. I would expect at least a $50 mark up on those, so Amazon would only net $150. It also has to absorb the negatvie impact of at least 10% return rate that some have forecast.
Also Amazon must absorb at least $10-15 in free shipping.
Will the Q1 Market share iPad market share exceed 100% when KF returns exceed the Q1 KF sales?
Yeah... if Amazon sells a few songs or books... that gets them back up to ZERO.
Apps, books and music simply aren't big profit makers.
I guess they are counting on people paying $80 a year for Prime... and ordering all their things from Amazon.
That's been Amazon's deal all along... they sell other people's stuff to make a tiny profit.
If you buy a Sony TV from Amazon... Sony gets most of that money...
But Prime can't be a big money-maker either. Amazon is footing the bill for all that "free" shipping you get. Plus all the licensing fees they must be paying for all that "free" content you get with Amazon Prime.
I guess they'll make it up in volume!
Nice post....
Ha! I misread the following:
...Plus all the licensing feces they must be paying for all that "free" content you get with Amazon Prime.
Edit: I don't know which is deteriorating faster: my eyesight or my mental processes...
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.
From his statement, how can you determine what the school district needs are, or what they would like, or what is on their wish list? What is the concept that she (and apparently I) is missing?
He makes a totally valid point, sometimes a less expensive piece of equipment is all you really need to accomplish your goals. If a $600 Mac Mini suits your needs, why buy $2500 Mac Pro?
BTW, she is an instructional coach, which means she works with teachers, the principle, , etc.... not the kids.
This place is giving headline space to "analysts" the way run of the mill internet forums let people in their dens who haven't put on clothes in three days post their ground breaking opinions. There's sometimes very little difference between the two except for one puts on a suit and shows up at an office, and the same little difference in the validity of their proclamations.
I'm sorry, they both advertise themselves as tablets, so that's what they'll be judged as. No, they do not have the Android name as they are not using the Google apps that allow that branding, but their core is a modified version of the Android OS. They just can't paste Android on the outside of it
Tho not breaking it down by specific model, Amazon did offer a press release a couple days back bragging of over one million kindle devices sold per week since the Fire was released.
That as interesting in what it doesn't say as what it does say.
Somewhere, there have been estimates that 3.9-5 Million Fires would be sold this year.
For sake of discussion, let's assume that Fire Sales == Fire Shipments to consumers and to resellers.
The Fire began shipping (was released) Nov 14. The assumption is that there were quite a few preorders.
Last Monday, Dec 12, was the 4th full week of Fire sales/shipments.
January 2, 2012 will be the 7th full week of Fire sales/shipments.
To attain a conservative estimate of 4 Million sales/shipments in 7 weeks, Amazon would need to sell/ship 572 Thousand Fires per week.
Realistically though, sales/shipments should be expected to reduce drastically by Dec 24 -- or 5.7 weeks.
So a reasonable calculation would be 4 Million Fires sold/shipped in 5.7 weeks == 701 Thousand Fires per week.
So, here are the questions:
1) Is Amazon selling/shipping the (between 570-700 Thousand) number of Fires necessary to attain 4 Million Fire sales/shipments in 2011?
2) Do you believe that the "more than 1 million Kindle devices sold per week" includes sales/shipments of more than 1 Million Kindle Fires per week?
3) If yes to number 2), why wouldn't Amazon brag about it?
4) If no to number 2), what meaning, if any, can be ascribed to Amazon's claim?
If you make the category broad enough, the claim loses any meaning...
Amazon: "We sell nnnn books per week".
Observer: "Yeah, So What? Compared to What", Which book sells best? How many?"
New York City has 7 major suspension bridges -- each of which is the longest in the world!
Comments
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.
But again, how do you account for profits from different business models? Amazon makes money selling content not hardware. Even with Android it's not so clear cut. Apple takes the whole profit from its hardware sales. With Android, the OEMs get some for their hardware, Google makes some from its services. But how do you account for second-order effects? Android devices hook people into the ecosystem. They may stay there even if they don't use Android after that first device.
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.
It is worth noting that this is over a million Kindle products per week, not Kindle Fire specifically. They could be selling 800k of the other Kindle models and only selling 200k Kindle Fire and their statement would still be accurate.
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.
BLAH BLAH.....
Two pieces of advice: (i) Stop posting tripe; (ii) If you want to do that, at least take the trouble to read and digest the conversation that has transpired before.
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.
The Fire is an experiment. If Amazon gets the returns expected in content sales then maybe it will go international.
In other words... don't hold your breath.
Two pieces of advice: (i) Stop posting tripe; (ii) If you want to do that, at least take the trouble to read and digest the conversation that has transpired before.
Two statements for you:
(i) Last I checked you don't run this place and your opinions carry no more weight than anybody elses. So you getting your panties in a bunch over the value of my posting is irrelevant.
(ii) I did read the entire thread and I was responding to somebody's previous comment, even though I didn't quote it. I can't help it if you are incapable of deriving the context from my post.
I would argue that the Fire is so modified that should not be considered Android. Amazon took the core Android code and completely re-written the UI layer and in turn removed all the Google services. Google makes ~ $0 from Fire sales
The jury is out if selling the Fire at a lose is a sustainable strategy. Amazon is likely losing $30 to $40 for every Fire sold at retail stores
The many things people lump together as ?the? Android market/user base/etc. are often misleading! And still true in some sense, if you find it interesting to consider all the things out there derived from Android* (like the Fire and various non-standard Asian versions; platforms that don?t run Android market apps). But a bunch of devices that aren?t compatible with each other, from totally different companies, do not make a ?platform? in the way iOS is.
* Actually you could consider all Android devices derived from iOS, too! Android wouldn?t exist in anything but name (if that) if it weren?t for copying iOS.
So I consider the touch-OS market to consist of Apple-derived platforms + a tiny slice for Windows Metro
The Fire is an experiment. If Amazon gets the returns expected in content sales then maybe it will go international.
In other words... don't hold your breath.
But with Amazon, have any of the Kindles ever been that popular outside the US?
Here in Canada, Kobo is bigger, because they are tied into our largest book retailer: Chapters.
Except for 2 minor points:
1) The Fire and Nook are not tablets.
2) They do not run Android.
...In other news, IDC repports that Huffy's share of the personal transportation market has risen to 7.25% And that the Hispano-Suiza was next with 0.12% -- despite the fact it was discontinued in 1936.
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?
As a peon in a large corporation I saw this first hand. Mind you this was not an electronics concern. In the end such moves almost put us out of business. So yeah deceptive practices like this are common.
In the case of Amazon though I do believe that initially they sold a large number of Fires but that has changed drastically as people have seen the poor reception for the device. In the end the competition is good for Apple, hopefully the new iPad models will reflect this. This is especially the case when things like Fire demonstrate just how well designed and support iPad is.
Also let's not forget that there is a huge difference in who these devices target. E-Readers really should be in a category of their own. From my perspective and E-Reader like Kindle is a legitimate device in its own right but really isn't in the same category as iPad.
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.
You are right. Apple is anti-customer. You can see it in their stock price, analyst projections and actual sales, dismal as they are. Pitiful. Just pitiful. /sarcasm
My wife works in education as an instructional coach (helping teachers be better is the simplest way to describe her job). The district is considering buying them iPads. My wife says that the iPad is overkill for their needs.
If you know you aren't going to need and use all the features of the iPad and you are looking to control expenditures then one of those other tablet like devices might be the correct choice.
Kind of like why buy a car that can go 200 mph when you know you are only going to drive 75?
Of course some of the people want the iPad just because it is the coolest thing out there. Even though they don't make sense in this instance. These are the type of people you don't want in charge of spending the taxpayer money the district runs on.
That would be overkill ... For what theyvdo now. How about for tomorrow when there are new uses? After all, that is what tends to happen when new technology is introduced into an organization. Bright people are challenged to find new and better uses for the technology.
Times change. Saddling an organization with a solution that fits now is not always the best solution. Doing so tends to stifle growth.
I would argue that the Fire is so modified that should not be considered Android. Amazon took the core Android code and completely re-written the UI layer and in turn removed all the Google services. Google makes ~ $0 from Fire sales
Exactly. People keep comparing Android to Windows circa 1990, but there's the critical difference. Microsoft maintained an iron-grip on Windows and there weren't dozens of forks and variations and proprietary UI layers in the mix. The hardware varied back then but the OS didn't. Windows and PCs were a one-to-many relationship. Android and the hardware is turning into a many-to-many relationship. If Android is going to mutate like this, it's sort of disingenuous to group all these variations under one name.
There are more recent figures on Fire costs which is estimated to be around $200 per device to make. So they are probably losing $1 per device. Amazon only need to sell three songs or half a book to make that up.
But you are right about Fire not being real android. I think it should be classed as a breakaway and figures kept seperately for both OSes.
Amazon has to pay a margin to the retailers.. I think I read that KF is available in 16,000 points of sale. I would expect at least a $50 mark up on those, so Amazon would only net $150. It also has to absorb the negatvie impact of at least 10% return rate that some have forecast.
Also Amazon must absorb at least $10-15 in free shipping.
Will the Q1 Market share iPad market share exceed 100% when KF returns exceed the Q1 KF sales?
Yeah... if Amazon sells a few songs or books... that gets them back up to ZERO.
Apps, books and music simply aren't big profit makers.
I guess they are counting on people paying $80 a year for Prime... and ordering all their things from Amazon.
That's been Amazon's deal all along... they sell other people's stuff to make a tiny profit.
If you buy a Sony TV from Amazon... Sony gets most of that money...
But Prime can't be a big money-maker either. Amazon is footing the bill for all that "free" shipping you get. Plus all the licensing fees they must be paying for all that "free" content you get with Amazon Prime.
I guess they'll make it up in volume!
Nice post....
Ha! I misread the following:
...Plus all the licensing feces they must be paying for all that "free" content you get with Amazon Prime.
Edit: I don't know which is deteriorating faster: my eyesight or my mental processes...
But with Amazon, have any of the Kindles ever been that popular outside the US?
Here in Canada, Kobo is bigger, because they are tied into our largest book retailer: Chapters.
Just one more reason to stick a fork in it, imho.
Nice post....
Ha! I misread the following:
...Plus all the licensing feces they must be paying for all that "free" content you get with Amazon Prime.
Edit: I don't know which is deteriorating faster: my eyesight or my mental processes...
I see a theme here, Dick...
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.
From his statement, how can you determine what the school district needs are, or what they would like, or what is on their wish list? What is the concept that she (and apparently I) is missing?
He makes a totally valid point, sometimes a less expensive piece of equipment is all you really need to accomplish your goals. If a $600 Mac Mini suits your needs, why buy $2500 Mac Pro?
BTW, she is an instructional coach, which means she works with teachers, the principle, , etc.... not the kids.
1) The Fire and Nook are not tablets.
2) They do not run Android.
http://www.barnesandnoble.com/p/nook...ble/1100437663
"World's Best Reading Experience + Tablet Essentials"
http://www.amazon.com/Kindle-Fire-Am...pf_rd_i=507846
"The Kindle Fire is a 7-inch tablet.."
I'm sorry, they both advertise themselves as tablets, so that's what they'll be judged as. No, they do not have the Android name as they are not using the Google apps that allow that branding, but their core is a modified version of the Android OS. They just can't paste Android on the outside of it
Tho not breaking it down by specific model, Amazon did offer a press release a couple days back bragging of over one million kindle devices sold per week since the Fire was released.
That as interesting in what it doesn't say as what it does say.
Somewhere, there have been estimates that 3.9-5 Million Fires would be sold this year.
For sake of discussion, let's assume that Fire Sales == Fire Shipments to consumers and to resellers.
The Fire began shipping (was released) Nov 14. The assumption is that there were quite a few preorders.
Last Monday, Dec 12, was the 4th full week of Fire sales/shipments.
January 2, 2012 will be the 7th full week of Fire sales/shipments.
To attain a conservative estimate of 4 Million sales/shipments in 7 weeks, Amazon would need to sell/ship 572 Thousand Fires per week.
Realistically though, sales/shipments should be expected to reduce drastically by Dec 24 -- or 5.7 weeks.
So a reasonable calculation would be 4 Million Fires sold/shipped in 5.7 weeks == 701 Thousand Fires per week.
So, here are the questions:
1) Is Amazon selling/shipping the (between 570-700 Thousand) number of Fires necessary to attain 4 Million Fire sales/shipments in 2011?
2) Do you believe that the "more than 1 million Kindle devices sold per week" includes sales/shipments of more than 1 Million Kindle Fires per week?
3) If yes to number 2), why wouldn't Amazon brag about it?
4) If no to number 2), what meaning, if any, can be ascribed to Amazon's claim?
If you make the category broad enough, the claim loses any meaning...
Amazon: "We sell nnnn books per week".
Observer: "Yeah, So What? Compared to What", Which book sells best? How many?"
New York City has 7 major suspension bridges -- each of which is the longest in the world!