Low price could bring high sales for Amazon’s Android tablet-reader, says analyst Piper Jaffray
Amazon is on track to sell 4 million Kindle Fire tablets for the fourth quarter, according to a prominent financial analyst who boosted his outlook for the device.
The e-commerce giant began shipping the Fire on 14 November to those who pre-ordered it, and early reviews have been largely mixed.
However, most analysts believe the custom Android tablet’s $199 (£126) price point will make it too hard to ignore among cost-conscious consumers who baulked at paying $499 or more for Apple’s iPad, or other higher-priced Android tablets.
Count Piper Jaffray analyst Gene Munster among those. Munster, who did channel checks and found the device rated highly among consumers, said Amazon will sell some 4 million Fire slates for Q4, much greater than the 2.5 million he originally estimated for the new gadget.
The device’s strengths includes its close integration with Amazon books, music and video content, he noted. The Fire also provides a quick on-ramp to the Amazon Prime membership, which includes free, two-day shipping and free Instant Video flicks for $79 a year. These factors will help Amazon seize 18 percent of the tablet market this year.
“Overall, we believe the iPad offers a superior user experience to the Kindle Fire, but note that for $200, the Kindle Fire delivers as much or more than many other competitors,” Munster wrote on 18 November.
Those competitors would be other Android tablets, such as the Samsung Galaxy Tab 7.0 Plus, which costs $399, or Research in Motion’s Blackberry PlayBook, which was just sharply discounted to $199 to compete with the Kindle Fire.
Galaxy Tab vs Kindle Fire
EWEEK compared the Plus with the Fire and found the Plus outstripped the Fire in many areas, including performance of the web browser and the ability to run apps smoothly. The Fire’s user interface showed some lag and the Silk web browser was not as powerful as we expected.
Instapaper chief executive Marco Arment, whose app is extremely popular on the iPad, offered a harsher, more detailed critique of the Fire. Munster, too, found issues with the Fire, noting that app icons either responded too slowly to touch gestures. Moreover, the Fire proved sluggish in handling Flash, he said.
This will ultimately be a moot point as Adobe and other developers abandon mobile Flash in favour of HTML5.
Global Equities Research analyst Trip Chowdry took a dimmer view of the Fire. Like Munster and Arment, Chowdry noted that the Fire lacks the polish and crispness of the iPad, which has sold over 32 million units to date. However, he also only expects Amazon to sell 1 million Fires for the quarter, a vastly more conservative number than most industry experts expect.
Chowdry noted that the Fire lacks many critical sensors, including a microphone, GPS, gyroscope, magnetometer and a 3G radio.
“Every indication we have as of right now, tells us that it is very likely that Amazon Fire may end up having the similar fate that RIM’s PlayBook had,” Chowdry said. “A Lot of expectations, lot of sell-ins but very weak sell-through.”