MarketLine Blog

Amazon continue to pursue the lucrative tablet computer market


Amazon’s Kindle Fire has seen great success in the US since its launch last November: according to Amazon, it has captured a 22% market share of the US tablet computer market. So, with rumors of an Apple iPad mini, speculated for announcement on September 12th, and the entry of Asus’s Google branded Nexus 7 tablet into the fray, an update to Amazon’s product seemed inevitable.

Amazon did not disappoint. On September 6th, we saw three new Kindle Fire tablets revealed to the world: an updated version of the original Kindle Fire, which has seen a price cut; and two versions of the new Kindle Fire HD. Notably, the Kindle Fire HD will come in two iterations, which are differentiated by their screen size. Amazon will hope to curtail the potential impact of an iPad mini upon the sales of its new tablets: the 7 inch Kindle Fire HD will compete with the rumored Apple product, while the 8.9 inch version will go into direct competition with Apple’s existing iPad. Additionally, consumers have a choice between 16 and 32GB of storage in their new Kindle Fire HD, as well as the option to add 4G LTE connectivity for an extra $200 in the 8.9 inch version. The 4G version of the Kindle Fire HD will come with storage options of 32 or 64GB.

The key to any potential success will be Amazon’s pricing strategy. For example, Amazon’s Wi-Fi 32 GB 8.9 inch Kindle Fire will retail for $369 upon its US release on November 20th. By way of contrast, Apple’s Wi-Fi 32GB iPad currently retails for a substantial $599. It goes without saying that Amazon’s much cheaper product will appeal to technological consumers that do not want to break the bank in times of economic uncertainty.

Amazon also announced that the updated version of the original Kindle Fire, as well as the 16 and 32GB versions of the 7 inch Kindle Fire HD, will be available in the UK from October 25th. The updated original Kindle Fire will retail for £129 (approximately $206.90), the 16GB 7 inch Kindle Fire HD for £159 (approximately $255) and the 32GB 7 inch Kindle Fire HD for £199 (approximately $319.20). This reflects Amazon’s confidence in its product, and the company will expect to see a similar success story in the UK as it did in the US, potentially leading to release in other regions.

The Kindle Fire may lack the technical prowess of other tablet computers, or the sleek finesse that is commonly associated with Apple’s line of computing products, but its accessibility and low price point are certain to put Apple, and other tablet manufacturers, under pressure. The ball is now in Apple’s court, and all eyes will be on the Californian company’s Media Event next Wednesday.

Discover  the volume of Amazon’s tablet sales alongside the factors behind tablet purchasing decisions with our Amazon Case Study: Kindle Fire to Challenge Apple iPad.

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