Kindle Fire Gets Merry Reviews For Christmas

Amazon said it sold millions of Kindle Fire tablets in the Christmas quarter, and it seems consumers who received them for Christmas are pleased with the slate, which was upgraded with some navigation improvements.

Piper Jaffray analyst Gene Munster said half of the 8,529 Fire reviews he surveyed gave the tablet 5 out of 5 stars, compared with 48 percent of those polled who gave the tablet a 5-star review on 13 December and 47 percent who gave the tablet a 5-star review on 8 December.

Good reviews

Moreover, 69 percent of those reviews comprise 4- and 5-star ratings. For perspective, Munster counted 70 percent of reviews as 4- or 5-star for the first Apple iPad in 2010.

The upbeat reviews bode well for Amazon to sell more digital content, such as MP3 music files, streaming TV and movie,s and applications. To wit, Munster is standing fast with his Fire tablet sale estimates of 5 million units.

“We believe the data indicates that people who received a Fire for Christmas are happy with the product,” Munster wrote in a 29 December research note. “Further, we believe that satisfaction with the device improves the prospect for strong digital media sales in the coming quarters.”

The news is slightly surprising considering the lukewarm reviews from tech experts and enthusiasts, who cursed the Fire as too sluggish, balky and non-responsive. Amazon rolled out a software fix over the air and made it available via manual download before Christmas.

While the early tepid reviews failed to sap the Fire’s fuel, Munster’s bullishness was tempered by a Goldman Sachs report that Amazon may miss fourth-quarter estimates due to some softness in e-commerce sales.

Goldman Sachs analyst Heather Bellini said in a 29 December that she believes Amazon could report $17.9 billion (£11.5bn) in earnings, or less than the $18.2 billion average analysts expected for the quarter.

Her theory for the 2 percent sales miss is rooted in the average difference between Amazon’s growth and e-commerce growth over the last five years. However, Munster said he remains optimistic in Amazon’s Q4 because overall e-commerce growth rates accelerated year-over-year for Q4.

$1bn sales

Specifically, comScore counted 15 percent growth in e-commerce sales for Q4 2011 versus 12 percent growth for Q4 2010.

Yet Munster also counted Chase Paymentech’s growth estimate of 26 percent this year versus 24 percent last year and ChannelAdvisor holiday sales of 23.7 percent for Q4 2011 versus only 16 percent a year ago.

As for how Amazon will fare, Munster predicts the Fire tablet itself will pump $1 billion into the e-commerce giant’s top line this year alone, providing a very nice end-of-the-year boost for a device that only went on sale on 15 November.