Print 28 comment(s) - last by robinthakur.. on Nov 7 at 5:40 AM

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 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

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

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.

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.

"If you mod me down, I will become more insightful than you can possibly imagine." -- Slashdot

Latest Headlines
Inspiron Laptops & 2-in-1 PCs
September 25, 2016, 9:00 AM
The Samsung Galaxy S7
September 14, 2016, 6:00 AM
Apple Watch 2 – Coming September 7th
September 3, 2016, 6:30 AM
Apple says “See you on the 7th.”
September 1, 2016, 6:30 AM

Most Popular ArticlesAre you ready for this ? HyperDrive Aircraft
September 24, 2016, 9:29 AM
Leaked – Samsung S8 is a Dream and a Dream 2
September 25, 2016, 8:00 AM
Yahoo Hacked - Change Your Passwords and Security Info ASAP!
September 23, 2016, 5:45 AM
A is for Apples
September 23, 2016, 5:32 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki