By Palash R. Ghosh: Subscribe to Palash's RSS feed
September 29, 2011 11:16 AM EDT
Shares of online retailer Amazon.com (Nasdaq: AMZN) jumped on Wednesday after the company unveiled its new, cheaply priced Tablet computer called Kindle Fire as a potential challenger to Apple Inc.’s (Nasdaq: AAPL) celebrated iPad.
However, some observers believe that the Kindle Fire does not necessarily pose a threat to the iPad (despite the fact that it costs less than half the price) because it is a vastly different type of product and is likely targeting a somewhat different customer base.
Moreover, Amazon.com, which has skyrocketed into the stratosphere of corporate America through its dominant online retail business, is not really diversifying its product line – rather, the Kindle Fire might be viewed as a complement to its existing operations.
The Kindle Fire, which features a 7-inch touchscreen, weighs only 14.6 ounces (one-third less than iPad-2) and boasts a dual-core processor, will only cost $199 – versus a minimum price of $499 for the iPad.
Amazon’s chief executive Jeffrey P. Bezos explained at a news conference that the Kindle Fire is designed to exploit the popularity of the company’s e-readers and lure in other customers who are seeking to stream music, films and videos. Indeed, Kindle Fire owners will have at their easy disposal Amazon’s existing library of 18 million e-books, songs, films and television programs – i.e, its entire stellar array of digital content.
Follow us
“We’re building premium products at non-premium prices,” Bezos declared.
Michael Gartenberg, an analyst with Gartner, told The New York Times: “Amazon has already nailed the hardest part of the equation: the content.”
The company is obviously expecting a huge and hungry market for the device – Bezos himself boasted Amazon is “making many millions of these.”
However, Apple remains the dominant player in the tablet market and it remains to be seen if Amazon can make much of a dent in it.
“Apple single-handedly created the tablet marketplace with its popular iPad product,” said Dennis Wassung, a portfolio manager at Cabot Money Management in Salem, Mass., to International Business Times.
“Apple is likely to maintain a 70 percent share or more over the next couple of years in a very fast-growing tablet market,” he said. “Samsung’s Galaxy Tab has a small presence. But some other entrants, like Research-In-Motion’s (Nasdaq: RIMM) Playbook, have largely failed,”
Indeed, Apple has sold more than 29 million iPads during just the first 15 months of its existence. By comparison, RIMM has unloaded a mere 200,000 units of its PlayBook in three months.
“The tablet market right now is easily defined as Apple and everyone else,” added Gartenberg. “There is certainly room for another player, and a well-executed device from Amazon could do well.”
Similarly, Brian White, an analyst at Ticonderoga Securities, wrote in a note to clients: "[Kindle Fire is] hardly an iPad killer. While Amazon's price point, installed base, digital content and cloud ecosystem will attract a certain consumer demographic to the Kindle Fire, there is still no real competitor to the iPad 2."
iPhone Theft On Cruise Results in Thief’s ‘Stolen iPhone Adventures’ Photos Published From Katy McCaffrey’s iCloud
Mark Zuckerberg's $6.4 Billion Loss: Value Of Facebook CEO's Stake A Gambler's Nightmare
Tasha Reign Says ‘Super Hot’ Bill Clinton Wanted To Meet Her and Brooklyn Lee, ‘Sympathetic’ For Viral Photo
Larry Flynt Blasts ‘Prudish And Delusional Right Wing’ Over S.E. Cupp Hustler Photo As ‘The View’ Hosts Jump To The Defense
Joe Biden Says He Understood Suicidal Thoughts In Wrenching Speech To Families Of Fallen TroopsWe value your privacy. Your email address will not be shared.
