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Kindle Fire drives tablet ownership numbers up, up, up

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Reuters

(Read caption) The Kindle Fire, Amazon's new tablet, is shown here. According to a new report, the low prices on the Kindle Fire have helped expand the tablet market.

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December was a very good month for the tablet computer and e-reader industries, according to the Pew Research Center.

In a new report released this week, Pew estimated that the share of American adults who owned tablet computers almost doubled between mid-December and early January, surging from 10 percent to 19. Meanwhile, during that same time frame, e-reader ownership also leaped from 10 percent to 19 percent.

"These findings are striking because they come after a period from mid-2011 into the autumn in which there was not much change in the ownership of tablets and e-book readers," Lee Rainie wrote on the Pew Research blog. "However, as the holiday gift-giving season approached, the marketplace for both devices dramatically shifted." 

Analysts attributed the growth in part to price drops on the entry-level Kindle and Nook e-readers, and the price-tag of the Amazon Kindle Fire, which retails for $200, three hundred bucks cheaper than the cheapest iPad. As we noted back in November, it costs Amazon $201.70 to build each Fire, meaning the company is actually losing money on each device it sells. 

It's a gamble, essentially: Amazon is betting that you'll use the Fire to buy a whole lot of Amazon content, such as e-books and videos. Some even predict that this is the year that Amazon begins selling an e-reader for nothing, thus removing one of the last hurdles to e-reading bliss. Sound possible to you? Drop us a line in the comments section. 

For more tech news, follow us on Twitter @venturenaut. And don’t forget to sign up for the weekly BizTech newsletter.


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