1. It's a faulty comparison. The iPad survey was taken in February 2010, two months before the iPad came out and the Fire survey was taken in October 2011, 18 months after the iPad came out. In the 20 months between the surveys the iPad has validated the market for tablets. Of course more people want/need a tablet now after seeing all the cool things a tablet (read: iPad) can do over the past year and a half.
2. Apple has a healthy margin on iPads whereas Amazon is reportedly selling the Fire at or below cost. If tablets turn out like phones, then I'd rather be Apple with 5% of the market and 50% of the profit than like Android with more market share and thinner margins.
All that said, as an iPad owner, I did pre-order a Fire since I'm curious to see how a 7" tablet fits into my life. This is what I wrote regarding HP's troubles in the tablet market and is probably why Amazon will success where others have failed (http://martingordon.tumblr.com/post/9049814056/hps-two-probl...):
There’s a glut of 10” tablets on the market. The iPad dominates the market and the ten or so 10” Android tablets do nothing to help HP’s situation there. 7” tablets are completely different when it comes to portability, there isn’t as much competition at this screen size, and Apple has stated that they have no intentions to build a 7” tablet (which means that it’s coming, but it’s not here yet and doesn’t have 80-95% market share like the 10” iPad does). A $250-$300 7” tablet has the opportunity to give HP a nice foothold into the market, and once they do, they can go back and fight for 2nd place in the 10” market. Building 7” marketshare and building consumer mindshare to eliminate also-ran status is the only way HP (or anyone else for that matter) will have a fighting chance in the tablet space.
Played with a family members new 7" Galaxy tab this weekend, and as a fellow iPad owner, I have to admit that 7" is a nice size. Big enough to be very comfortable for most tablet activities, but more manageable in your hands. If there was a choice between 7" or 10" iPads, I bet a lot of people would go for 7".
I agree -- I bought a 7" Galaxy Tab for cheap on Woot, and I immediately preferred the size. Now I pretty much use it only for reading books with the Kindle app. It actually fits some of my coat pockets, but it's too heavy to haul around all day just as a dedicated book reader (it seems to weigh as much as the iPad 2). In the end, it sits on my desk mostly unused, and I use the iPad 2. Still, it has convinced me that a very good 7" tablet could do well.
If I'm Amazon I'd be afraid that, in January, Apple introduces an iPad 3 and drops the iPad 2 to the Fire's price.
A year ago, I thought that 7" would be good, then I got an iPad and got insight.
On an upright iPad I can just read/browse A4 documents, most web sites and 80 chars wide code.
I've asked others that liked 7". For reading literature, 7" is be equally good. Maybe for video, too. (Really young (/near sighted) people can probably read documents, too...)
The comparison is also faulty because we don't know how the demand will change after Kindle Fire gets more apps and games:
Just like with movies and TV shows, music, books, and
magazines, Kindle Fire offers a fully-integrated Android
apps and games experience - purchase or register for an
app or game once, enjoy it on your Kindle Fire and other
Android-based devices - and all apps and games are backed
up in the Amazon Cloud for re-download anytime
It's not a threat unless people stop buying iPads. How you do you get from "interest in the Fire" to "lack of interest in the iPad"?
They don't compete on price. They're not really even the same class of device. This is just another pointless and content-free "ZOMG <foo> KILLER IS ON THE WAY!!1" article.
"The more interesting stat, perhaps, is that more than a quarter of respondents in ChangeWave’s survey who confirmed an imminent Kindle Fire purchase said they would buy the Amazon tablet in place of an iPad."
The correlation between the intentions of respondents in this survey and the general tablet-buying public is not clear, as is the case with any survey, but in this context the Kindle Fire is clearly a threat to the iPad. 26% - that's a huge threat.
Everyone just wants to be on the winning team now and be able to call the others losers. It's kind of the way things are now. iPhone vs Android. XBox vs Playstation. Coke vs Pepsi. Etc etc etc.
I wouldn't trade my iPad for a Fire ATM, but I would love to see some real competition in the consumer tablets arena. Amazon vs. Apple means that I win.
Apple is going to face some stiff competition in 2012 from the Kindle Fire and the new Nook. There is no iPad Killer but these are real players in this space and I don't see them going away anytime soon. Both will have access to an incredible digital library similar to Apple's eco system. This will be a good year for consumers looking to buy tablets.
If Fire/Nook do 80% of what the iPad does (and with 50% of the screen size) but cost half the price, it can disrupt iPad sales. Apple is wise to head this off.
I think both the Kindle line and the iPad will continue to be profitable because they address slightly different markets. It's not always a zero-sum game.
I think a big distinction is that the Fire can be a pretty crappy device with a focus on content (which is Amazon's strongest offering), as evidenced by the general cheapness of the Kindles, while the iPad's offering is obviously the quality of the device itself.
It will be really interesting to see how the Kindle Fire and iPad compete internationally. Not only have I doubts about raking in profits via eBooks in countries with less emphasis on copyright, but the Appstore has not even arrived in central Europe. By the time people outside the US have heard of the Kindle Fire, it will have to compete against the iPad 3. By comparison, it takes Apple less and less time to get their products shelved in late markets like Hong Kong,
Cancelled my Fire pre-order and ordered a Nook Tablet. The extra $50 is worth it for the microphone and extra storage.
Amazon is selling a product (at a discount on cost) that is aimed to lock you into the Amazon experience. While I like the Amazon experience, I also like to give my older technology away and the microphone (Skype/VOIP) and extra storage will be much more valuable in a few years.
Personally, I think the most tempting 7" is still the HTC Flyer, which is now marked down to $299. It has a digitizer and a $40 stylus is available, which makes it much more useful for notetaking than any of the other alternatives, including the iPad (in my opinion anyway).
Combine that with the basic 7" premise of a small, light reading device and it seems like an all-around win for users with that particular set of needs.
The big question is how anyone else competes with a device that sells at a loss. This is a problem for Apple, but it's death for anyone else trying to sell a 7" tablet. Given the economics, it'll take a competitor with serious content chops - maybe Sony could put together an Amazon Prime/Netflix-like content package to compete?
The Kindle Fire is going to absolutely destroy the iPad in terms of profit generated. However, there is room for both devices on the market, and the iPad won't be "killed" as the press likes to claim.
But Amazon has essentially built a magic portal that can instantly swap your money for anything they sell. Do you realize how much money someone can spend in 1 minute while sitting in a comfy chair with the Kindle? There's a huge list of "things people want" in Amazon's electronic goods inventory, even more in their real goods inventory, and they already have your credit card info ready for you to use.
Have you thought about what pages gain the most from the Silk browser? That's right, Amazon detail pages. You'll be able to browse amazon.com faster than ever before, and buy even more things.
Disclaimer: I worked at Amazon until October (and hold stock), but I am not revealing (or aware of) any confidential information regarding the Fire.
If they're selling the Fire at a loss, how are they going to destroy the iPad in terms of profit. Mind you I ordered a fire, so I hope to see it succeed.
I don't know that this is a correct analysis but the premise of the argument presented is that Amazon is taking a small loss up front, but in return they are effectively shipping you a cash register into which you keep depositing money for Amazon digital and physical goods.
If this proves to be correct, then the Fire would be increasing Amazon's sales on other high-margin goods, and the money lost on the device could simply be considered a form of customer acquisition cost.
I have been considering a Kindle for some time and the Fire does indeed look interesting to me. I want to wait, however, and see some detailed hands-on reviews of the final product before ordering one.
As for being a threat to the iPad, I am not so sure. The Fire strikes me as being almost totally dedicated to media consumption, where the iPad seems to be more of a general computing device.
> I have been considering a Kindle for some time and the Fire does indeed look interesting to me.
Keep in mind that eInk Kindles are very different from LCD tablets. The former are fantastic for reading, and not that good at much else. The latter are more general purpose, but have much shorter battery life, and are probably not so good for reading, depending on how well you like reading an LCD screen.
There is a difference though - the iPad was built by Apple to be bought as a piece of multipurpose hardware (once you buy it, Apple is happy, has made a profit from you) while the Fire was built by Amazon to be a cheap window into Amazon streaming content (once you buy it, all Amazon wants you to do is consume media, so they can make their money back).
Neither is especially useful in my experience. The value proposition is pretty much entirely limited to videochat, which is probably why both cameras on the iPad 2 suck so much for still photography. However, videochat still isn't all that common.
The tablet market was very different before the iPad was released so I don't think it's a very fair comparison. Are there figures from the iPad 2 launch?
The key phrase here is "ahead of launch". I doubt the Fire will be as strong of a competitor as its being made out to be.
There's a difference between an iPad and tablets. That difference is something you just can't define. If you go by a dictionary or consensus definition then they're the same but talk to anyone who's used an iPad and they'll tell you it's an iPad, not a tablet.
The post says nothing about why the demand is high and reads like advertising hype. I see nothing special about this Kindle beyond the color screen and Silk, which by the way is nothing more than a glorified browser serving cached content.
I see the iPad and the rest as serving different markets. The Kindle and it's ilk are for book lovers mainly. iPads are for apple fanatics and web content consumers, and the rest are for people who want iPad knockoffs for their cheap price or don't know the difference. I know that sounds really harsh, maybe even ignorant but I don't meant it that way at all.
Seems like whenever a new tablet comes out everyone jumps on the "this-is-the-ultimate,ate-iPad-competitor" bandwagon. Tablet makers seem to be largely copying the iPad as well instead of offering something different. I'd gladly she'll out the extra $400 for the real thing over a sub-par knockoff anyway. These tablet makers need to quit comparing themselves to something they are not (the iPad) and sell their devices on value they offer. Amazon so far has done the best job of this of anyone I've seen but the others need to sell on value offered, not just price. You do get what you pay for.
My views are based on experience and observation. Maybe others have some more solid evidence to validate or detract from mine.
I work around "real" people and I've been shocked at how many of them have ordered Kindle Fire's both for themselves and as Christmas presents. These are people who have never owned a tablet and in the case of presents they're buying for other people who have never owned a tablet. When I ask why they're buying them the answer is universally the same thing...
"I could never justify buying an iPad because I don't know what I'd use it for but for $199 I figured what the heck"
A lot of these people are influenced by the original Kindle and its reputation but most are looking for Tablet functionality. When I ask what they plan to use it for the first answer is always "browse the web"
I do agree its a different market from the iPad. But the question I have is whether these people will go for a higher end purchase further down the line. And if so what they'll buy. Because these people will be tied to Amazon by their media in the same way I'm tied to Apple.
Aside from the price, which is already going to be a huge buying pull for most people, the Fire is going to be considered as the Kindle that does "other stuff too." If they are happy with the "other stuff" and their screen size, I don't see what offerings an iPad would give to lure them away when it comes to just pure content consumption (though I do realize it runs Android apps as well).
I work around "real" people as well and I know no one that has purchased a Kindle Fire or is really even considering one. I do know people that have purchased the iPad 2, Xoom and Asus Transformer, and other who have Kindle book readers, but haven't found a single person who has pre-ordered a Kindle Fire.
>"There's a difference between an iPad and tablets. That difference is something you just can't define"
It can easily be defined, and it is branding.
And branding is why the Fire is so likely to provide strong competition. Amazon has been establishing their brand for nearly two decades, has pretty much set the standard for online customer service (Zappos) and price efficiency, and in the slate market has a long standing reputation [in internet years] for functionality and quality with the Kindle.
Furthermore Amazon clearly understands the killer app for slates is books, and that readers are a larger and more loyal demographic than gadgeteers and fanboys. Yes, the iPad is a true Scotsman, but most people don't care about what's under the kilt.
[Edit] Amazon is likely to sell a lot of Fire tablets because they are offering a clear value proposition in accordance with their brand, rather than higher priced "Magic."
"There's a difference between an iPad and tablets. That difference is something you just can't define."
There's the same difference between iPhone and Android, no? Last quarter, Android surged from 40 to 43% market share. iPhone held at 28% (still healthy growth, mind you-- the whole market is growing).
The ~$200 price point is a huge differentiator. Before this, non-iPads really didn't have any differentiator (prices were comparable and, as you say, iPads were just better). The Fire is going to be a big deal.
The ~$200 price point is indeed a huge differentiator. The main lesson from the HP TouchPad fire sale is that people are interested in tablets but $400+ is too expensive.
With the ~$200 price point and the Kindle and Amazon brand, this could be real competition for the iPad.
Seems like whenever a new tablet comes out everyone jumps on the "this-is-the-ultimate,ate-iPad-competitor" bandwagon.
This has only been said twice, with any degree of seriousness, the Xoom and Galaxy. But it became clear very shortly that they were too expensive for what you were getting.
The Fire is cheap, great brand, and appears to have a good set of apps at launch.
2. Apple has a healthy margin on iPads whereas Amazon is reportedly selling the Fire at or below cost. If tablets turn out like phones, then I'd rather be Apple with 5% of the market and 50% of the profit than like Android with more market share and thinner margins.
All that said, as an iPad owner, I did pre-order a Fire since I'm curious to see how a 7" tablet fits into my life. This is what I wrote regarding HP's troubles in the tablet market and is probably why Amazon will success where others have failed (http://martingordon.tumblr.com/post/9049814056/hps-two-probl...):
There’s a glut of 10” tablets on the market. The iPad dominates the market and the ten or so 10” Android tablets do nothing to help HP’s situation there. 7” tablets are completely different when it comes to portability, there isn’t as much competition at this screen size, and Apple has stated that they have no intentions to build a 7” tablet (which means that it’s coming, but it’s not here yet and doesn’t have 80-95% market share like the 10” iPad does). A $250-$300 7” tablet has the opportunity to give HP a nice foothold into the market, and once they do, they can go back and fight for 2nd place in the 10” market. Building 7” marketshare and building consumer mindshare to eliminate also-ran status is the only way HP (or anyone else for that matter) will have a fighting chance in the tablet space.