Amazon has just released its Kindle Fire tablet to the public through retail establishments and by online order. Amid mixed reviews, Amazon is optimistic that the US$ 199 price tag might hit the sweet spot among consumers and that the Amazon's new 7-inch tablet is poised to overtake Apple's iPad 2 in terms of holiday sales.
More People Interested in the Kindle Fire
Amazon might have a clear winner in its hands, if we consider a poll taken by retail and review site Retrevo. In a survey among 1,000 participants, those who planned to purchase the Amazon Kindle Fire outnumber potential iPad 2 buyers. 12% said they plan to buy a Kindle Fire, while 10% said they want an iPad 2. Even those who already have tablet computers have shown a preference toward the Amazon Kindle Fire, at 27% who want to upgrade to a Kindle Fire vs. 20% who will be moving up to an iPad 2.
Meanwhile, respondents specifically asked to choose between the Kindle Fire and the iPad 2 likewise leaned toward Amazon's hybrid e-reader and tablet. 44% said they will chose a Kindle Fire over the iPad 2. Only 12% said they will choose the iPad 2 over the Kindle Fire. Still, a good portion -- 44% -- say they don't know enough about the Kindle Fire yet to make a decision, which can change as early consumer reviews come out.
More consumers likely to buy the Kindle Fire than iPad 2
Retrevo's director of community and content Andrew Eisner says the Kindle Fire has a clear advantage when it comes to market buzz, but it has to prove itself a worthy challenger to other established players in the tablet market. But at "a very attractive $199 price point" and a lighter form factor than the iPad 2, the Kindle Fire might be the preferred device for those who want a tablet that's light on the pocket and light on the briefcase (or backpack, purse or hand).
iPad 2 On the Decline?
Goldman Sachs analysts agree that demand for the iPad might be on the decline. According to Bill Shope, the product line might slow down or stall in growth, and Apple might soon be challenged in its dominance in the tablet market.
While improving holiday demand into late November could certainly push the momentum in the other direction, we believe it is prudent to assume the iPad is facing some near-term demand challenges."
Still, Shope is sticking to its current estimate of 13 to 14 million iPad 2 units shipped this Q4 2011. Shope has suggested that Apple might want to look into the possibility of reducing iPad 2 prices to remain competitive, given that the company has undertaken this strategy with its previous-model iPhones. With the launch of the latest iPhone 4S, the iPhone 4 was reduced to $99 with plan and the iPhone 3GS is now free with two-year contract. Both the iPhone 4 and 3GS have been the two top-selling smartphones in 3Q 2011, according to NPD, and are likely to remain in the top spots after the iPhone 4S by yearend, even beating newer and more powerful Android offerings from various brands.
Should Apple worry? With the iPhone and iPad bolstering much of the company's growth and revenue, they should not take the Kindle Fire's challenge lightly. Even if the Kindle Fire is half as powerful (and beautiful) as the iPad 2, Amazon's secret sauce is in how the Kindle Fire serves as a gateway to Amazon's rich resource of content and retail items, including ebooks, videos, magazines, and the like.