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Apple suggests that popular Kindle Fire will hurt Android

Thus far Samsung Electronics Comp., Ltd. (KS:005930) has been the only Android tablet maker to make major inroads against the wildly popular Apple, Inc. (AAPL) iPad's dominant market share.  But that situation is about to change thanks to Amazon.com Inc.'s (AMZN) new Android-powered Kindle Fire tablet.  Priced at $200 the tablet is the cheapest Android tablet to hit the market yet, and its specs are surprisingly respectable.  Driven largely by the attractive price, the tablet was registering pre-orders of 50,000 units a day in lieu of its November 15 launch.

Of all companies, you would think this would be most concerning to Apple.  However, Barclays analyst Ben Reitzes claims that Apple's top executives are entirely unphased by the Fire's success.

In fact, he says that in a recent meeting he had with Apple CEO Tim Cook and CFO Peter Oppenheimer, he was told that Apple was pleased with the Kindle Fire's success, which they felt would fracture the Android market and solidify their lead.

He recalls:

While the pricing at $199 looks disruptive for what seems to be the iPad’s most important rising challenge, the Amazon Fire – it is important to note that it could fuel further fragmentation in the tablet market—given it represents yet another platform. While compatible with Android, the Apps work with Amazon products. The more fragmentation, the better, says Apple, since that could drive more consumers to the stable Apple platform. We believe that Apple will get more aggressive on price with the iPad eventually but not compromise the product quality and experience.

Usually when critics of Android talk about "fragmentation", they're referring to the fact that different handsets are running different version of the base OS tree, as Google Inc. (GOOG), the maker of Android, relies on carriers and hardware partners to push out updates (and some updates are compatible with older handsets for hardware reasons.

The "fragmentation" created by the Kindle Fire is a bit different.  The tablet does not run  a standard build of Android at all.  Amazon branched the OS before Android 2.1, and thus has written much of the interface itself.  It's added in multi-touch and a new browser.  
Kindle Fire in bag

Many argue this is a selling point.  Apple apparently thinks its disastrous for Android.  

Of course the Apple brass's objections could simply be sour grapes.  Some believe that in eschewing the baseline Android, Amazon made itself harder to sue -- Apple's favorite technique to try to stifle would-be Android competitors.

But with Amazon cranking up production and at least one analyst predicting sales of 5 million units this holiday season, we're guessing Amazon and Google aren't losing any sleep over the tablet's success.  Clearly, one man's fragmentation is another man's differentiation.

Source: Business Insider



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Competition is good.
By jmunjr on 11/3/2011 6:50:16 PM , Rating: 3
Competition is good, but I wish the populous was a little more technically adept since that would result in more demanding customers and better products in the marketplace...




RE: Competition is good.
By MechanicalTechie on 11/3/2011 6:53:09 PM , Rating: 5
I totally agree.. the world is dominated by techo-retards... its a little depressing at times


RE: Competition is good.
By retrospooty on 11/3/2011 11:05:10 PM , Rating: 5
sadly, this is not limited to tech. the world in general is dominated by retards.

- think about how stupid the average person is. now think, half of everyone is dumber than that guy. - George Carlin


RE: Competition is good.
By Bad-Karma on 11/4/2011 2:45:19 AM , Rating: 2
We should be nice and simply say they are "technologically impaired"

<Sarcasm


RE: Competition is good.
By inperfectdarkness on 11/4/2011 8:02:52 AM , Rating: 1
don't get me started. i'm still scratching my head on how wuxga lost out to 1080p. sheeple are retarded.


RE: Competition is good.
By icemansims on 11/4/2011 10:26:48 AM , Rating: 3
This one actually had a few good reasons. First 1080p comes off the tongue a lot easier than wuxga. Second, 1080p is simply cheaper for manufacturers to make. Third, it had to do with space and bandwidth. Bandwidth of transmission via cable, satellite signals, etc. Space in a disk, most particularly blue ray and the now defunct HD DVD.


RE: Competition is good.
By BansheeX on 11/4/2011 12:46:16 PM , Rating: 2
It also has to with what the optimal aspect ratio is for human field of vision. But yes, choosing 1080 over something higher was for bandwidth and manufacturing. And if pc monitors match televisions in aspect, you never have to worry about media recorded for one getting clipped or distorted when played back on the other.


RE: Competition is good.
By GuinnessKMF on 11/4/2011 11:28:18 AM , Rating: 3
I loved wuxga too, but it's pretty obvious why it lost out, simple economics, make the same panel for all the products in your portfolio and you save money. If you're "scratching your head" over this, then I believe you fall in the category we're talking about here.


RE: Competition is good.
By Shining Arcanine on 11/4/2011 11:54:05 PM , Rating: 2
I have the same problem. If I want WXUGA, then I need to buy an expensive Apple product.


RE: Competition is good.
By InternetGeek on 11/3/2011 7:24:40 PM , Rating: 2
I agree with you two that it would help if the general tech level was a bit higher, but at the time, that might have also kept development in fluid UIs and such. My example being Windows Mobile (not Windows Phone). It multi-tasked, copy-pasted, used external storage, had GPS, allowed custom apps from the very beginning. But it was a pain to use. Maybe the technology wasn't there. Maybe it was, but the final implementation was not quite that good. It was decently good for us in the bleeding edge of mainstream society.


The Kindle Fire may well be disastrous
By lightfoot on 11/3/2011 6:49:47 PM , Rating: 5
quote:
Apple apparently thinks its disastrous for Android.

I've preordered a Kindle Fire myself. I'm not sure that it will have the capabilities that I expect a full tablet to have. (I already own an Acer Iconia A500)

However at $199, there is little risk in finding out.

If this tablet fills my needs, then it will indeed be disastrous, not only to Android, but to Apple as well.

The only function that the Kindle Fire will not be capable of that the Acer (or any other tablet including the iPad) is would be video chat over Skype (or Facetime if you're an Apple junkie.) A neat feature, but probably not worth an additional $200-300.

If the Kindle Fire suits my needs, I will likely buy four more (one for each person in my family.)

If others are like me, that may well kill the over $200 tablet market - including not only the Android tablets, but also the Apple iPads.




By retrospooty on 11/3/2011 11:09:47 PM , Rating: 5
Yup... Apple may huff and puff, but gauranteed this time next year we will see lower prices on all tablets, including apples. the days of the $500 tablets are about done for… which is good, they were always way overpriced.


RE: The Kindle Fire may well be disastrous
By jtesoro on 11/4/2011 4:47:23 AM , Rating: 4
If this kind of fragmentation affects Android tablets the way it did mobile phones (i.e. variety = growth), then this is definitely the "disaster" that Android tablets need.


By retrospooty on 11/4/2011 8:27:35 AM , Rating: 3
"If this kind of fragmentation affects Android tablets the way it did mobile phones"

Think PC vs. Mac.

1 strong competitor with a closed solution, vs. a cheaper alternative with every possible variation under the sun.

This is why Apple tries to crap all over everything and sue.


By Smilin on 11/4/2011 9:28:02 AM , Rating: 2
The Fire definately cost Apple my purchase.

I'm part of a pent up demand for a "full OS" tablet. Win7 isn't cutting it but Win8 will. Microsofts delay provided Apple a shot at converting me over to their ecosystem. The Fire (preordered when it announced) will provide enough coffee table web browsing to get me by for now.


Disastrous? On what planet...
By Boze on 11/3/2011 7:20:26 PM , Rating: 2
Amazon has streaming television deals with major networks, and they're targeting exactly the right audience.

Who owns a Kindle? People who read books. Who wants a Kindle Fire? People who read books and who want a tablet, but don't want to spend $499 for one.

I've already started using the Kindle Owner's Lending Library. Today I downloaded The Blind Side: Evolution of a Game. I've wanted to read this for awhile, but I had a lot other books that I purchased and wanted (in some cases, needed) to read first. Now thanks to the KOLL, once every month I can get a new book that I want to read for absolutely free.

quote:
But Boze, you have to be purchase an Amazon Prime membership to access the KOLL!


Yeah, and I have. Since 2005. I was invited to Prime back the feature was in 'beta', and I haven't looked back since. Amazon is a powerhouse, one of which Apple [i]should[/i] be wary as a best case scenario, and [b]terrified[/b] of as a worse case scenario.

Amazon is actively challenging the iTunes Store model, and they're going to win, because for most Americans, 12 free books a year, free two-day shipping on millions of items, and thousands of streaming shows, all for $79 is a no-brainer. It was a no-brainer for me back in 2005 for shipping alone.

Amazon Prime offers more value than ever before, and Jeff Bezos' crazy ass constantly wants to add more and more benefits to the membership. And he'll do so. And you know what? They can raise the price to $89 next year; they can raise it to $99, and it'll still be worth it to me.

The iPad will always have its place, as my brother uses his for light content creation tasks and he uses some application that interfaces with his electric guitar. I don't fully understand it because we don't live in the same state and because, frankly, I'm more of a creative type in terms of writing and sketching while he's more of a digital artist / musician / movie creation type.

But for me? The Kindle Fire is all the tablet I need. Web browser alone gives me access to the things I need most - news and email. The streaming music and movies and my Kindle library are all just an added bonus.

Kindle Fire is going to be a game changer, and the 9.7" or 10.1" version that you can bet your bottom dollar Amazon will announce in the next six to twelve months will be far more robust and will probably have developers flocking to it, because all the infrastructure is in place for them. A known brand and a huge storefront with millions of monthly customers, along with an easy-to-use and navigate interface?

I'm not saying that the iPad will be marginalized, at least not instantly, but we're about to see the same thing happen to Apple in the tablet market that we saw in the smartphone market, going from massive market share to minimal, in just a few years.

Apple fanatics that believe the company can do no wrong, bookmark this page and come back and read this post in three years. If Apple's share of the tablet market is 40% or greater, I'll print this post out in Notepad and eat the paper upon which I printed it.




RE: Disastrous? On what planet...
By gwem557 on 11/3/2011 9:36:08 PM , Rating: 2
Here, here!

I'm sure Swashtika will be along soon to pronounce mayhem and doom for Amazon, but the Fire -- and more importantly, the direction that Amazon is moving towards, which will in the future certainly include bigger, badder, better versions -- IS a game-changer...and Apple execs are retards if they can't see it.

I for one, hope they don't.


RE: Disastrous? On what planet...
By Tony Swash on 11/4/11, Rating: -1
RE: Disastrous? On what planet...
By nafhan on 11/4/2011 1:21:07 PM , Rating: 2
Your first point is interesting, but none really say much of anything about Android. LG and Motorola aren't doing great. That would be meaningful if they were the only companies making Android devices, but HTC and Samsung are both doing extremely well. Lots of people are using Google services on Apple devices... that's great for Google and sort of bad for Apple, but, again, doesn't really say much about Android in particular. Finally... It's kind of silly to even mention Boingo (a wifi hotspot provider). Most Android devices are sold with fairly generous 3G data plans - whereas many iOS devices are wifi only.

What the stuff you mentioned says to ME is that Apple's got a great thing going with their profit margins, and that we've got a very competitive marketplace out there. It definitely doesn't say one or the other is "winning" (even sarcastically).


By retrospooty on 11/4/2011 3:21:01 PM , Rating: 2
"Android is winning! "

Girls, girls!!! , your both pretty, now stop fighting.


By robinthakur on 11/7/2011 5:40:17 AM , Rating: 1
Aside from the technical aspects of the Fire, Amazon are heading into a litigation nightmare currently with multiple IP lawsuits against its core features. Its stock has also come under heavy fire due to it making heavy, ongoing losses against the kindle and the fire, so I'm not sure Apple will be very worried. Additionally, I think they will probably wait to take legal action against Amazon in the hope that the other current claims reduce its strength. Let's be clear here, the Fire is so dirt cheap because Amazon are making a big loss on every sale. This is not how Apple does business, and that is why its stock is so valued. If anyone can afford to do this sort of cut price malarky, then it is Apple currently, not Amazon. Expect the next iPad to be cheaper, but the market for the iPad and the Fire are not the same, because the iPad has existed with total dominance in the tablet market for more than 2 years now, and it has not been treading water.


Waiting for the coders...
By vailr on 11/3/2011 7:13:41 PM , Rating: 2
Waiting for the coders to see if they can allow installation of updated Android versions (3.2=Ice Cream Sandwich?) on this Amazon color tablet.




RE: Waiting for the coders...
By gwem557 on 11/3/2011 9:36:43 PM , Rating: 4
If the Fire isn't rooted within 48 hours of release, I'll bow down and call you swami.


Can't be a bad thing
By MechanicalTechie on 11/3/2011 6:49:02 PM , Rating: 2
Having another tablet on the market can only be a good thing i reckon... more competition is always better than none... a little surprised that its taken so long for another 'appliance' tablet(we all know these are real computers) to be released.




Syntax/Grammar
By vol7ron on 11/3/2011 6:50:45 PM , Rating: 2
quote:
(and some updates are compatible with older handsets for hardware reasons


Perhaps you meant incompatible and a closed parentheses somewhere?




No Lawsuits here
By GruntboyX on 11/3/2011 10:01:59 PM , Rating: 2
I doubt Apple will touch Amazon in court. Amazon holds quite a few patents related to online shopping and cloud computing. They would be able to couter sue apple right where it hurts App Store, Itunes, and Icloud.

Microsoft on the other hand has less to loose, they may come knocking. However It will be interesting to see if Amazon differentiated itself enough to avoid those lawsuits. Everyone left the Nook Color alone, so I would assume this would be market acceptance.

I think Apple is more afraid then they are letting on. Its not about the hardware sales, its about the lock in to a platform. Amazon is more compelling as it offers more than the Apple Ecosystem.




By Fritzr on 11/3/2011 11:34:49 PM , Rating: 2
It looks like Amazon will fragment the Android ecosystem the same way OSX fragmented the Linux ecosystem

By making it similar enough to mainstream Android to allow porting to be a trivial exercise, they invite developers to add Kindle Fire to their supported devices list. At the same time they make it different enough so that it is not seen as "Another Android". Instead it is the Kindle Fire!! Which is special because it is supported by Amazon :D




By fteoath64 on 11/5/2011 5:39:05 AM , Rating: 2
Little do they realize that price is the most important point to address in the market when a device commoditise in functionality. Any usable tablet priced correctly like the FIRE, will sweep a huge market share. This means Apple's market share people.Why are these executives blind ?.Android market share is minuscule compared to iPad market share.

Then you have the size factor which is not to be under estimated. The majority of young users prefer the 7-8 inch screen compared to a 9 to 10 inch screen. Also, the weight and battery life plays into it.

From a price viewpoint, for almost-the-same-thing, the iPad cost 2.5 times *more* than the FIRE. The market will adjust for sure as it is a known dynamic factor. Apple will have to cut $200 or more in 2 quarters to be competitive.




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