Will Amazon Fire Up the Tablet Market?

11:15 AM -- The Amazon.com Inc. (Nasdaq: AMZN) Kindle Fire is now shipping for a whopping $199 for the 7-inch tablet.

The Fire has an opportunity to reshape the tablet market in several obvious -- and a few less obvious -- ways as I see it:

  • The price point is clearly very important, the Fire -- at $200 -- doesn't seem merely designed to take on the iPad but to actually open up a new sector of the market.
  • Keeping the content in the cloud rather than on the device is also quite new in the tablet space, although Apple Inc. (Nasdaq: AAPL) is also moving in that direction with iCloud. It could start to give tablets a role as a central content management device that syncs with smaller smartphones and bookmarks video on larger devices. Having a Wi-Fi device that's constantly connected to the cloud could also start to show some weaknesses in public hotspot networks, particularly if these Fire tablets become popular.
  • You're also likely to see some of the "split-browsing" concepts used to speed up the Amazon Silk browser turn up on other vendors' devices over time. The browser learns user preferences as you surf the Web and splits the computational tasks between the device software and Amazon's massive server farm, speeding up page rendering. Of course, having a massive server farm in the first place may well be a barrier to entry for some mobile vendors.

Let me know if you're getting an Amazon Fire, and write in with your impressions.

— Dan Jones, Site Editor, Light Reading Mobile

sarahthomas1011 12/5/2012 | 4:49:00 PM
re: Will Amazon Fire Up the Tablet Market?

I was thinking of buying it for my parents, but they really want an eReader. Since the Fire has a touchscreen display and not the more reader-friendly eInk, it's not ideal for that. Still, I think it's good enough that it's hard to justify buying anything else within the same price range. 

So, I'm undecided.

paolo.franzoi 12/5/2012 | 4:48:56 PM
re: Will Amazon Fire Up the Tablet Market?

Be interested in folks view of this more in comparison to an iPad and other more high end Android Tablets.  I get the basic difference in theory, but interested more in use.



joset01 12/5/2012 | 4:48:56 PM
re: Will Amazon Fire Up the Tablet Market?

From what I've seen so far you're missing features like a camera on the Fire but the performance appears to there.

FredStein 12/5/2012 | 4:48:54 PM
re: Will Amazon Fire Up the Tablet Market?

Right, at this price, Fire will open up the market. Now, is this a sustainable business for Amazon? (I like Amazon - a lot).

Not only are they losing about $9 when sold, they have to account for future support, returns, and sustaining engineering. And they need to sell a lot, as in 10s of M's to really impact their emerging on-line content business.

This is a bold strategic move, with real risk for a long-term payout.

DCITDave 12/5/2012 | 4:48:54 PM
re: Will Amazon Fire Up the Tablet Market?

AMZN's not losing money on the hardware; we've analyzed this:


And the customer service costs and returns might be quickly brought back to break even when consumers start purchasing digital goods that they can only consume on the device.

Definitely a risk worth taking. It's also worth pointing out that if AMZN had been more of a hardware company, like Apple, they'd have found a way to make more margin on a more expensive device. There's a lot of room between the price of a Kindle Fire and an iPad. Maybe too much room?


FredStein 12/5/2012 | 4:48:53 PM
re: Will Amazon Fire Up the Tablet Market?

From IBT, http://bit.ly/vh9WhY, "HIS iSuppli estimated the total cost of the Kindle Fire at $209.63 with components costing $191.65 and additional manufacturing costs at $17.98." Quanta makes the Fire. They claim their profit is 4.6%.

Agreed, Amazon will make their profits in downlooad sales.

I respect Amazon. While not their fault, the mis-steps by other non-iPad tablet vendors forced Amazon to take an aggressive approach - and they did.

Gabriel Brown 12/5/2012 | 4:48:52 PM
re: Will Amazon Fire Up the Tablet Market?

How locked-in to Amazon is it? Do you have to buy your digital products from Amazon or just strongly encouraged to do that?

I'm kind of uncomfortable about lock-in to one eco-system as a consumer. I can see why it might work for a vendor. 

Edit: I do like digital products that are hosted rather than stored locally. I want access rather than ownership, I think.

paolo.franzoi 12/5/2012 | 4:48:48 PM
re: Will Amazon Fire Up the Tablet Market?

Dan or anyone else,

There seems to be a lot of confusion about whether the Kindle Fire USB port (yes I know its a micro) supports host mode.

Do you have a contact that can get a definitive answer?



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