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Looks like Amazon.com's bargain pricing approach is paying off, early on

Is Amazon.com, Inc. (AMZN) new Kindle Fire Android tablet an "iPad killer"?  According to a leak, preorders reveal it could be, thanks to its budget price.

When it comes to the tablet market, the aspiration of every Android tablet maker is to create the "iPad killer".  Apple, Inc.'s (AAPL) popular tablet still controls 63 percent of global sales.  Thus far many companies have had their designs touted as "iPad killers", but only Samsung Electronics Comp., Ltd. (SEO 005930) has managed to come close to rivalling Apple in sales.  And Samsung's prospects of continuing to do so are in jeopardy thanks to a slew of lawsuits [1][2][3][4] [5][6][7] brought by Apple.

Amid this backdrop of high expectations and unfufilled hype Amazon.com, Inc. (AMZN) revealed last week its first entrant in the color multi-touch tablet market, the Kindle Fire.  It didn't take long after the unveil for the skepticism to set in.  Some pointed out that Barnes & Noble Inc. (BKS) had released a similar tablet (the Nook Color) almost a year ago.  And reports indicated that the Fire might be sold at a per-unit loss.  Boy Genius Report Editor-in-chief Jonathan Geller suggested during an appearance on CNBC on Wednesday afternoon, Amazon's new tablet "might not even really be an iPad competitor at all."  

And Ticonderoga Securities analyst Brian White summed up these sentiments, remarking that the device was "hardly an iPad killer", stating "We believe Apple’s long history as both a hardware and software company will continue to drive greater technological innovation in the tablet market versus Amazon. Also, the aesthetics of the Kindle Fire seem tired to us and clearly pale in comparison with the iPad 2."

If the aesthetics of the Kindle Fire pale in comparison to the attractive iPad, the iPad's price equally pales in comparison to the Kindle Fire's.  The Kindle Fire starts at $199 USD -- an unheard of price point for a modern tablet.  The iPad starts at $499 USD -- an extra $300 USD.

A leak published by CultofAndroid (the sister site to CultOfMac) indicates that the Kindle Fire has racked up 254,000+ preorders, just five days after the unveil.  The leak, which comes from Amazon’s availability look-up and SKU aggregator (ALASKA), is an early signal that Amazon.com's budget pricing strategy may be paying off.

Kindle Fire presales

Apple's iPad only mustered 300,000 sales on its first day, when it was released last year.  Amazon.com has been sustaining an apparent preorder pace of 50,000 orders a day, or roughly 2,000+ orders an hour.  If it can keep this up it could easily pass the iPad in first day sales when it debuts on November 14.

To give just one more benchmark of how impressive this figure is, the Motorola Xoom reportedly only sold between 25,000 and 125,000 units in its first two months on the market.  Amazon.com may have just doubled that with a month of preorders still left in store.

Sources: Cult of Android, Boy Genius Report





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