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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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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.


"It's okay. The scenarios aren't that clear. But it's good looking. [Steve Jobs] does good design, and [the iPad] is absolutely a good example of that." -- Bill Gates on the Apple iPad














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