If Amazon should sell its first tablet computer for $249 (£160), it will easily become the most successful alternative to Apple’s iPad, according to financial services researcher Piper Jaffray.
Piper Jaffray analyst Gene Munster polled 410 US consumers last week and found that 62 percent of those surveyed said they would pick a 7-inch Amazon tablet that costs $249, compared with 21 percent of consumers who said they would pick a 9.7-inch iPad that costs $599.
“We believe this shows there is a high degree of price sensitivity in the tablet market,” Munster wrote on 27 September in a research note. “Tablets are mostly supplemental devices (in addition to a computer and a smartphone), so the data makes sense.”
Amazon could sell the Kindle Fire for anywhere between $250 and $400, a bid to properly challenge the iPad, which has sold more than 30 million units at a base price of $499.
However, the industry consensus is that Amazon will be most aggressive in its pricing, hoping to make up the low price point of the hardware with sales of movies, music, storage and other content services.
For his survey, Munster used the $599 price point of the iPad 2’s 32GB version instead of the $499 $16GB base model because he said it’s an estimated average price of $599.
Munster also offered the caveat that his survey comes with the Kindle Fire sight unseen, and he cautioned against putting too much stock in his poll until the public knows more about the device.
That should come on Wednesday morning in Manhattan, where Amazon chief executive Jeff Bezos will show off the device, which is based on a custom version of Google’s Android operating system.
The Kindle Fire is expected to push users toward Amazon content services, including the Kindle application for books, Amazon Cloud Player for music, Amazon’s Instant Video player for movies, and the Android Appstore for mobile applications. Munster noted that respondents’ uses for tablets included web browsing, reading, movies and games.
“If Amazon can do these four things at the $249 price point, we believe there will be strong interest in the tablet,” Munster added.
To that end, Munster said he expects Amazon to sell 2.5 million Kindle Fire tablets and an additional 3.5 million Kindle e-reader devices in the December quarter. The company’s Kindle brand will account for $5.4 billion, or 8 percent, of Amazon’s total revenue.
Tesla retreats from pioneering gigacasting manufacturing process, amid cost cutting and challenges at EV giant
No skynet please. After the US, UK and France pledge human only control of nuclear…
Microsoft's AI investments continue in south east Asia, after investments in Japan, Malaysia, Indonesia, as…
New chapter for LastPass as it becomes an independent company to focus on cybersecurity, after…
US FCC seeks to ban Chinese telecom firms at centre of national security concerns from…
Two updates to Anthropic's AI chatbot Claude sees arrival of a new business-focused plan, as…
View Comments
Another non story based on analyst rubbish.
Would you rather spend $249 on something than $599?
What a stupid question and flawed logic. He based the $599 on the estimated average cost? The man is an idiot.
If he was doing his job properly he would have asked the question against the base price as that would be the direct comparison.
He should have also asked the same question for the Amazon tablet v the equivalent $599 Android such as the Samsung 10.1 to get a more accurate result.
I'm not saying the result would have turned on it's head but as it stands he has asked the question needed to get the answer he wanted.
Analysts are idiots