What is more interesting is that Amazon has stated that they are working on a next-generation Fire, possibly with a different form factor.
Imagine a 10" Fire for $300.
Now THAT might be competition.
The reason others haven't released 10 inch tablets in that price range is Apple has a lock on the supplies. Apple's cash hoard allows it to buy huge volumes of things like LCDs and 1) lock up the supply, and 2) bring the cost down for it.
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.
Spot on!
Gotta love this if you're an Apple shareholder. On the low end, Android faces a deep-pocket competitor who is happy to sell their hardware at cost, and who has a compelling ecosystem related to their tablet. What would Android bring to the party in the sub-$300 market?
I'm not so sure if there's even going to be a mid-market. If budget is a top priority, you'll tend to go with the Fire. If it's not, and you're comfortable going above a few hundred, it's just not that much of a stretch to go to $500 for an iPad 3 (or possibly somewhat less for an iPad 2).
Now when Android tries to compete with iPad 3 at the high end, since their margins are nowhere near as good as Apples, at an equivalent price-point, they'll have to offer a cheaper device. That, combined with the fact that Apple has an outrageous lead on tablet-specific apps, makes for a very tough slog for Android.
I just don't see Android making it in a substantial way in tablets.
And if Apple becomes to tablets what Microsoft has been in the desktop sphere, that will just enhance the iPhone and iMac and iCloud ecosystem that much more.
Could possibly get ugly if Amazon decided they wanted to go toe-to-toe with Apple in the full-featured 10-inch tablet market. But my guess is that they'll see that as a non-winner. The wild card, I think, is how well iBooks Author does. If Amazon starts feeling like their book empire is under serious threat from Apple, they may have no choice but to fight back.
Well, either way it's hard to see Android doing well here. Microsoft? That's a whole different story. I think their only hope--and it's a long-shot--is to take over in the enterprise market and hope this spills over into consumer. Good luck with that\.
well, Jobs may have decided one way two years ago. but one big question for Apple's future is how much the Cook team may do things that Jobs once turned down. and Jobs changed his mind often too, by the way. Apple can't ignore changes as the marketplace evolves either.
the iPod touch very noticeably did not get a hardware update in 2011, just iOS 5 of course, and a 25% price cut. so a major hardware update for the touch is highly likely in 2012.
the iPod touch very noticeably did not get a hardware update in 2011, just iOS 5 of course, and a 25% price cut. so a major hardware update for the touch is highly likely in 2012.
You know, its been said before but I may be starting to believe it...
Apple won't do a small iPad, but they could very well release a big (7") iPod touch that is sub $300, and would squash any effort of Amazon to go upscale.
"software attach rates for apps and media downloaded to the tablets would correlate inversely with the hardware price?
Do I misunderstand the term ?attach rate?? I thought attach rate didn?t mean the total NUMBER of ?attached? downloads (or whatever additional sales), but rather the rate per initial sale: how many paid app/media downloads per each hardware unit sale.
You could say the total number of downloads rises with the total number of sales, and that low prices drive sales. Those are obvious factors, but they?re just specific elements of a much more complex picture. (Are Kindle buyers and iPad buyers equally willing to spend on apps? Just one of many other factors.) You cannot say they people who thought they?d save money by getting a non-iPad are more likely than iPad users to splurge on content! Especially since they include apps, not just media: the Fire has almost none compared to iPad, and nothing like the same quality of apps.
So I don?t see app/media download rates ?correlating inversely? with hardware price. I?d definitely expect the opposite.
I think this is a net positive for Apple. As others have mentioned, this really cuts off other Android Manufacturers. If Amazon is selling their low-end tablets at a loss, others have no incentive to compete. Amazon makes up their money on consumables later on (hopefully). Samsong, et all can't do the same, so there is no incentive to compete there. This takes away an entire revenue stream (look at all the low-cost Android phones that are sold, including BOGO offers). With Android failing to catch on in tablets until now, and Microsoft coming soon, this will really handicap Android going forward. If apple continues to sell ipads, iphones & ipods as iOS devices and Android sells only phones, Apple has a decen shot of staying competitive in device activations far into the future.
Competition? What planet are you from anyway? Is KIA competing with BMW? Two completely different markets. I really don't grok posts like yours.
And who overall out of the KIA owners and BMW spent more on the extras... gas, wheels, wipers, after market upgrades etc. When there are 100 KIA owners to one BMW, it works in your favor to build some KIAs. Which is why most premium car mfrs own everyday car brands too.
Yeah, but ink cartridges have MASSIVE margins. That's not the case with content.
True, but then again how often do you replace your ink cartridges? 2-3 times a year, if that? Compared to buying/renting several movies or books every month?
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.
Personally, I see meeting 40% of the Apple shipments as being a _massive_ win for Amazon. Not 'just a fraction'. A big fraction.
Apple is entrenched in this market and for an outsider to come in and be selling close to 50% of the number of devices overnight is an amazing achievement in such a short time. Amazon will be very happy.
And why did they sell so many? As someone who actually has one, they are very neat devices. Sure, the iPad is better. It had better be given the price difference, but the gap is not as large as the price difference.
Personally I hope the iPad 3 is an amazing bit of technology placing Apple clearly back in the lead. The iPhone 4S was a disappointment - not something Apple should be repeating.
My bet is that you'll see a $349 iPad 2 when the iPad 3 rolls out (or shortly thereafter), and which point a $300 Fire is DOA.
Apple really should do this, precisely due to the threat of a 10-inch Fire. If Apple can do this soon enough, maybe they could keep Amazon from even going down that road.
On the other hand, they probably shouldn't complete with Amazon in the 7-inch sphere...unless Amazon goes 10-inch. If Apple preemptively goes 7-inch, they'll be forcing Amazon to compete directly with them; there's no way that Amazon is simply going to cede the entire tablet market to Apple. So why not try to just establish a doupolistic truce, and enjoy watching Android squirm?
[...] "Kindle Fire has staked out an important market position due to its loyal Amazon customer base and attractive (low) device pricing." [...]
That "attractive (low) device pricing" is below Amazon's cost. That's an unsustainable business plan for nearly every other company making pads. (Remember the brief HP Touchpad fire sale?)
Amazon uses the Fire as a mobile sales terminal. They will recoup the money they lose on the Fire hardware many times over as the "loyal Amazon customer base" buys physical and digital goods from Amazon. It's the same thing that Schick and Polaroid did. Schick sold their razors at a loss and their blades at a profit. Polaroid sold their cameras at a loss and their film at a profit. They took a one-time device sale loss and more than made up for it as customers purchased consumable items for the device.
Can RIM do that with PlayBook? No. Not without a robust, successful infrastructure like Amazon's or Apple's. How about Motorola with Xoom? No. Just having an infrastructure isn't enough. It needs to be more than a checkbox. It has to be robust and successful enough to attract and hold that vitally important loyal customer base. Same with the Galaxy Tab etc. They're all starting from scratch, infrastructure-wise. They're presenting an incomplete solution, which isn't the way to build that vitally important customer base. Apple and Amazon have been relentlessly building and refining their infrastructures and customer bases for a decade now. Good luck catching up.
Having said all that, I'm sure Amazon would have loved to sell Kindle Fire at a $100 profit (for about $300 retail) if they were sure they could do it sustainably. They have clearly done their homework, plugged numbers into their spreadsheets, and decided that they couldn't. You get within a few hundred bucks of the base iPad price and you get crushed by iPad's value. You drop your price $300 below iPad and you end up selling your padlet at a loss. Only the latter is viable, and only if you have goods to sell to your loyal customers after they purchase your pad.
Come on people, give credit when credit is due. All I'm reading on here is sour grapes. Being able to sell 6,000,000 of anything is impressive. Period.
Everybody I know who bought a Kindle Fire returned it and bought an iPad.
Have owned iPads from the start, wouldn't give it up. But have enjoyed a Fire I got as a company gift. Really slick and useful device, will keep using them both. After seeing the Kindle Fire, I also bought one for my 5 year old granddaughter for Christmas. Couldn't have bought her an iPad, but Fire was at the right price point. She loves it and uses it all the time.
If you can afford an iPad, there's no comparison. Otherwise the Fire is a nice highly functional device. Simple matter of $$.
Come on people, give credit when credit is due. All I'm reading on here is sour grapes. Being able to sell 6,000,000 of anything is impressive. Period.
When they actually release their real numbers and show us how many they've actually sold, then we can talk about giving credit where it's due.
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.
That is WITH a 2 year contract.
Is the Note an over-sized phone or an under-sized tablet?
Come on people, give credit when credit is due. All I'm reading on here is sour grapes. Being able to ship 6,000,000 of anything is impressive. Period.
well, Jobs may have decided one way two years ago. but one big question for Apple's future is how much the Cook team may do things that Jobs once turned down. and Jobs changed his mind often too, by the way. Apple can't ignore changes as the marketplace evolves either.
the iPod touch very noticeably did not get a hardware update in 2011, just iOS 5 of course, and a 25% price cut. so a major hardware update for the touch is highly likely in 2012.
Apple margin on the iPad is high. Why would they want to get a lower margin on a smaller device?
If anything, the low-end iPad 2 will be discounted by $100-$150 when the next iPad comes out. Right there it'll be about $350-400 and entice potential Kindle owners.
The market place has spoken, the iPad in its current price/form is winning the tablet market. The 5" and 7" tablets have failed to knock Apple from its perch.
Competition? What planet are you from anyway? Is KIA competing with BMW? Two completely different markets. I really don't grok posts like yours.
Competition in the since that many people will find the Amazon Tablet good enough and will not be buying the higher priced iPad. The fire works fine as a email reader, web browser, book reader, photo viewer, and media consumer. There are many people who do not use tablets for anything else. Any rational person will have to conclude that the Fire will have some negative affect on iPad sales. I do not think it will be a huge effect, but it will keep Apple honest with prices and that is a good thing. The Fire will get better over time. There is a price/quality point where even a BMW owner would buy a Kia. In fact some of the newer high end Koren cars are truly starting to win over the BMW crowd....
I never said it was as good as the ipad.... You rabid fanboys are amazing....
Comments
What is more interesting is that Amazon has stated that they are working on a next-generation Fire, possibly with a different form factor.
Imagine a 10" Fire for $300.
Now THAT might be competition.
The reason others haven't released 10 inch tablets in that price range is Apple has a lock on the supplies. Apple's cash hoard allows it to buy huge volumes of things like LCDs and 1) lock up the supply, and 2) bring the cost down for it.
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.
Spot on!
Gotta love this if you're an Apple shareholder. On the low end, Android faces a deep-pocket competitor who is happy to sell their hardware at cost, and who has a compelling ecosystem related to their tablet. What would Android bring to the party in the sub-$300 market?
I'm not so sure if there's even going to be a mid-market. If budget is a top priority, you'll tend to go with the Fire. If it's not, and you're comfortable going above a few hundred, it's just not that much of a stretch to go to $500 for an iPad 3 (or possibly somewhat less for an iPad 2).
Now when Android tries to compete with iPad 3 at the high end, since their margins are nowhere near as good as Apples, at an equivalent price-point, they'll have to offer a cheaper device. That, combined with the fact that Apple has an outrageous lead on tablet-specific apps, makes for a very tough slog for Android.
I just don't see Android making it in a substantial way in tablets
And if Apple becomes to tablets what Microsoft has been in the desktop sphere, that will just enhance the iPhone and iMac and iCloud ecosystem that much more
Could possibly get ugly if Amazon decided they wanted to go toe-to-toe with Apple in the full-featured 10-inch tablet market. But my guess is that they'll see that as a non-winner. The wild card, I think, is how well iBooks Author does. If Amazon starts feeling like their book empire is under serious threat from Apple, they may have no choice but to fight back
Well, either way it's hard to see Android doing well here. Microsoft? That's a whole different story. I think their only hope--and it's a long-shot--is to take over in the enterprise market and hope this spills over into consumer. Good luck with that
I think they already decided
well, Jobs may have decided one way two years ago. but one big question for Apple's future is how much the Cook team may do things that Jobs once turned down. and Jobs changed his mind often too, by the way. Apple can't ignore changes as the marketplace evolves either.
the iPod touch very noticeably did not get a hardware update in 2011, just iOS 5 of course, and a 25% price cut. so a major hardware update for the touch is highly likely in 2012.
...
the iPod touch very noticeably did not get a hardware update in 2011, just iOS 5 of course, and a 25% price cut. so a major hardware update for the touch is highly likely in 2012.
You know, its been said before but I may be starting to believe it...
Apple won't do a small iPad, but they could very well release a big (7") iPod touch that is sub $300, and would squash any effort of Amazon to go upscale.
Time will tell.
Do I misunderstand the term ?attach rate?? I thought attach rate didn?t mean the total NUMBER of ?attached? downloads (or whatever additional sales), but rather the rate per initial sale: how many paid app/media downloads per each hardware unit sale.
You could say the total number of downloads rises with the total number of sales, and that low prices drive sales. Those are obvious factors, but they?re just specific elements of a much more complex picture. (Are Kindle buyers and iPad buyers equally willing to spend on apps? Just one of many other factors.) You cannot say they people who thought they?d save money by getting a non-iPad are more likely than iPad users to splurge on content! Especially since they include apps, not just media: the Fire has almost none compared to iPad, and nothing like the same quality of apps.
So I don?t see app/media download rates ?correlating inversely? with hardware price. I?d definitely expect the opposite.
Competition? What planet are you from anyway? Is KIA competing with BMW? Two completely different markets. I really don't grok posts like yours.
And who overall out of the KIA owners and BMW spent more on the extras... gas, wheels, wipers, after market upgrades etc. When there are 100 KIA owners to one BMW, it works in your favor to build some KIAs. Which is why most premium car mfrs own everyday car brands too.
Yeah, but ink cartridges have MASSIVE margins. That's not the case with content.
True, but then again how often do you replace your ink cartridges? 2-3 times a year, if that? Compared to buying/renting several movies or books every month?
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.
Personally, I see meeting 40% of the Apple shipments as being a _massive_ win for Amazon. Not 'just a fraction'. A big fraction.
Apple is entrenched in this market and for an outsider to come in and be selling close to 50% of the number of devices overnight is an amazing achievement in such a short time. Amazon will be very happy.
And why did they sell so many? As someone who actually has one, they are very neat devices. Sure, the iPad is better. It had better be given the price difference, but the gap is not as large as the price difference.
Personally I hope the iPad 3 is an amazing bit of technology placing Apple clearly back in the lead. The iPhone 4S was a disappointment - not something Apple should be repeating.
My bet is that you'll see a $349 iPad 2 when the iPad 3 rolls out (or shortly thereafter), and which point a $300 Fire is DOA.
Apple really should do this, precisely due to the threat of a 10-inch Fire. If Apple can do this soon enough, maybe they could keep Amazon from even going down that road.
On the other hand, they probably shouldn't complete with Amazon in the 7-inch sphere...unless Amazon goes 10-inch. If Apple preemptively goes 7-inch, they'll be forcing Amazon to compete directly with them; there's no way that Amazon is simply going to cede the entire tablet market to Apple. So why not try to just establish a doupolistic truce, and enjoy watching Android squirm?
[...] "Kindle Fire has staked out an important market position due to its loyal Amazon customer base and attractive (low) device pricing." [...]
That "attractive (low) device pricing" is below Amazon's cost. That's an unsustainable business plan for nearly every other company making pads. (Remember the brief HP Touchpad fire sale?)
Amazon uses the Fire as a mobile sales terminal. They will recoup the money they lose on the Fire hardware many times over as the "loyal Amazon customer base" buys physical and digital goods from Amazon. It's the same thing that Schick and Polaroid did. Schick sold their razors at a loss and their blades at a profit. Polaroid sold their cameras at a loss and their film at a profit. They took a one-time device sale loss and more than made up for it as customers purchased consumable items for the device.
Can RIM do that with PlayBook? No. Not without a robust, successful infrastructure like Amazon's or Apple's. How about Motorola with Xoom? No. Just having an infrastructure isn't enough. It needs to be more than a checkbox. It has to be robust and successful enough to attract and hold that vitally important loyal customer base. Same with the Galaxy Tab etc. They're all starting from scratch, infrastructure-wise. They're presenting an incomplete solution, which isn't the way to build that vitally important customer base. Apple and Amazon have been relentlessly building and refining their infrastructures and customer bases for a decade now. Good luck catching up.
Having said all that, I'm sure Amazon would have loved to sell Kindle Fire at a $100 profit (for about $300 retail) if they were sure they could do it sustainably. They have clearly done their homework, plugged numbers into their spreadsheets, and decided that they couldn't. You get within a few hundred bucks of the base iPad price and you get crushed by iPad's value. You drop your price $300 below iPad and you end up selling your padlet at a loss. Only the latter is viable, and only if you have goods to sell to your loyal customers after they purchase your pad.
Wow! Six million KFs, each sold at a loss. Impressive.
I'm sure they'll make it up in volume!
Not particularly original, sorry.
Everybody I know who bought a Kindle Fire returned it and bought an iPad.
Have owned iPads from the start, wouldn't give it up. But have enjoyed a Fire I got as a company gift. Really slick and useful device, will keep using them both. After seeing the Kindle Fire, I also bought one for my 5 year old granddaughter for Christmas. Couldn't have bought her an iPad, but Fire was at the right price point. She loves it and uses it all the time.
If you can afford an iPad, there's no comparison. Otherwise the Fire is a nice highly functional device. Simple matter of $$.
Come on people, give credit when credit is due. All I'm reading on here is sour grapes. Being able to sell 6,000,000 of anything is impressive. Period.
When they actually release their real numbers and show us how many they've actually sold, then we can talk about giving credit where it's due.
Competition? What planet are you from anyway? Is KIA competing with BMW? Two completely different markets. I really don't grok posts like yours.
To my limited imagination, Kia and BMW are in the exact same business. Selling cars. Your grok-meter must be tuned differently than mine.
How many people would that be exactly?
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.
That is WITH a 2 year contract.
Is the Note an over-sized phone or an under-sized tablet?
Maybe its a Phablet?
Come on people, give credit when credit is due. All I'm reading on here is sour grapes. Being able to ship 6,000,000 of anything is impressive. Period.
There. Fixed that for you.
well, Jobs may have decided one way two years ago. but one big question for Apple's future is how much the Cook team may do things that Jobs once turned down. and Jobs changed his mind often too, by the way. Apple can't ignore changes as the marketplace evolves either.
the iPod touch very noticeably did not get a hardware update in 2011, just iOS 5 of course, and a 25% price cut. so a major hardware update for the touch is highly likely in 2012.
Apple margin on the iPad is high. Why would they want to get a lower margin on a smaller device?
If anything, the low-end iPad 2 will be discounted by $100-$150 when the next iPad comes out. Right there it'll be about $350-400 and entice potential Kindle owners.
The market place has spoken, the iPad in its current price/form is winning the tablet market. The 5" and 7" tablets have failed to knock Apple from its perch.
Competition? What planet are you from anyway? Is KIA competing with BMW? Two completely different markets. I really don't grok posts like yours.
Competition in the since that many people will find the Amazon Tablet good enough and will not be buying the higher priced iPad. The fire works fine as a email reader, web browser, book reader, photo viewer, and media consumer. There are many people who do not use tablets for anything else. Any rational person will have to conclude that the Fire will have some negative affect on iPad sales. I do not think it will be a huge effect, but it will keep Apple honest with prices and that is a good thing. The Fire will get better over time. There is a price/quality point where even a BMW owner would buy a Kia. In fact some of the newer high end Koren cars are truly starting to win over the BMW crowd....
I never said it was as good as the ipad.... You rabid fanboys are amazing....