Amazon ups Kindle Fire production...
...as punters choose the tablet over an iPad
Demand for Amazon's 7in tablet, the Kindle Fire, is sufficiently strong to prompt the online retailer to increase its production orders by 42 per cent, it has been claimed.
Amazon originally asked to be sent 3.5m Fires from Taiwanese factories before 2011 is out. Now it wants 5m of the devices, say component makers, according to Digitimes.
Kindle Fire is set to begin shipping next week, on 15 November, in the US only. There has been talk of Amazon discussing resale deals with French retailers, but so far there has been no comment from Amazon itself about its plans to make the $199 (£125) Fire available outside the US.
Even if Amazon sells 5m Fires by the end of the year, it's unlikely to dent Apple's iPad shipments overly. But it is having an effect.
Apple CEO Tim Cook was recently reported to have said he views the Fire's pricing as a challenge. He should - Amazon's brand carries almost as much weight as Apple's does.
Incidentally, Apple comment about Android fragmentation being increased by the Fire is FUD: many Fire purchasers will be buying into the Amazon brand not Android, so the notion that Fire's Android won't be quite the same as, say, Samsung's Android isn't going to hinder sales.
Meanwhile, data from market watcher ChangeWave shows pre-release interest in the Fire - as measured by survey respondents saying they will or are very likely to buy one - running higher than it was for the iPad, though only slightly. Don't forget too that, nearly two years on from the iPad launch, consumer awareness of the tablet as a product category is very much higher than it was back then.
Punters have a notion now of what a tablet can do for them, not least thanks to all the marketing Apple has done.
Crucially, ChangeWave's data shows that more than a quarter - 26 per cent - of punters planning to pick up a Fire will buy the Amazon tablet instead of the iPad they had been intending to buy. A further 12 per cent are getting a Fire instead of another brand of tablet. Nine per cent will get a Fire but not a Kindle e-book reader.
Speaking of which, one estimate we've seen, from Digitimes, has 28.9m e-book readers shipping in 2011, up 31.4 per cent on 2010's total. Most of them will be sold in the US. ®
COMMENTS
Re: Expectations...
The expectations come from a combination of the cost and functionality - advertising/marketing may try and push the functionality/coolness but the cost of the product will drive the majority of sales.
As long as Fire owners can browse the Internet, play music/videos and Angry Birds, paying 50% less will make up for any other features the iPad has.
And while some Fire users will decide that they would benefit from the additional features an iPad I suspect that sales numbers will point to bad times ahead for manufacturers trying to sell tablets at ~£400+
Fragmentation
"many Fire purchasers will be buying into the Amazon brand not Android, so the notion that Fire's Android won't be quite the same as, say, Samsung's Android isn't going to hinder sales."
Agreed, if you're talking about sales of the Kindle Fire tablet. But Apple has a point: the already fragmented Android market is about to become even more so. Remember, the Fire uses an OS forked from Android 2.2 ("Froyo"). Buyers won't care, because there's little or nothing about the Fire's user experience that hints at Android--it's an Amazon tablet all the way. But for developers, this makes things even more complicated than they are.
Amazon's promotional muscle and willingness to sell hardware below cost make it likely that the Fire will become the most popular 7" tablet. Where does this leave developers? Which version of Android will they target? Google would like it to be Android 3.x ("Honeycomb") and 4.x ("Ice Cream Sandwich")... but developers will flock to the best-selling hardware, since that's where they stand a chance of making some money. If the most popular hardware is Kindle Fire running a heavily customized version of Android 2.2, Google's development roadmap may become more or less irrelevant--it'll be Amazon calling the shots, by virtue of its dominant installed base.
Admittedly this is speculation, at least for now. But clearly the introduction of a tablet running a de-Googleized version of Android 2.2 with Amazon's massive sales potential behind it is not good news for competing Android tablet makers, or for Google.
Worth bearing in mind that they _sell_ them for £125. It probably _costs_ them substantially more, to make, than this. As with the Kindle, they'll be betting on selling content, to make up the difference. In fact, I'm guessing that Jeff Bezos is probably hoping Fire users DON'T just sit around surfing the Web, watching free videos on YouTube and playing games that Amazon didn't sell them.
This isn't just going to be a walled garden. It's going to be one where you have to pay, to sniff the flowers.
It's never going to cost £125, you need to at least add the taxes in. More likely £179 if they use the same rate they use for the current Kindle.
You might even say
....that Kindleslab sales ARE ON FIRE!
