Will the Kindle Fire change the way tablets are sold?(Read article summary)
The Kindle Fire may not be an iPad-killer. But it will certainly change the tablet landscape.
The Kindle Fire, the long-awaited tablet from Amazon, is already off to a solid start. So says tracking firm eDataSource, which has reported that 95,000 Fire pre-orders were placed in the 24 hours after the Amazon tablet was first unveiled. Part of the appeal of the Kindle Fire, of course, is the price, which undercuts even the cheapest iPad by $300, in the process opening tablet technology to a whole new audience.
"Essentially, we believe the Kindle Fire addresses a different market than the iPad 2, a tablet-light user on a tight budget that may not have yet purchased a tablet or already use a Kindle," Ticonderoga analyst Brian White said in a recent note to clients, according to the Washington Post. In other words, the Fire isn't an iPad-killer. Instead, it's a market expander, a carefully-priced device which could change the very way tablets are sold.
For evidence, you need look only to BestBuy, which has officially dropped the price of all RIM PlayBook models by $200. Before the launch of the Kindle Fire, BestBuy sold three PlayBooks – a 64 GB tablet which retailed for $699.99; a 32 GB tablet which retailed for $599.99; and a 16 GB model for $499.99. Those devices now sell for $499.99, $399.99, and $299.99, respectively. (On the RIM site, the prices remain unchanged.)
Of course, this price cut could be less a reaction to the release of the Fire, and more a last gasping breath of a fading machine. Collins Stewart tech analyst John Vinh has speculated that the PlayBook has already been soundly trounced by competitors such as the iPad. "We believe RIM has stopped production of its PlayBook and is actively considering exiting the tablet market," Vinh wrote.
Either way, it's clear that the Fire will alter the evolution of the tablet. Pre-Fire, most tablets, like the iPad and iPad 2, were luxury items, designed for consumers with a bit of change to spare, and sold for $400 or more. (See also the Xoom and the Galaxy Tab.) Post-Fire, we're likely to see a whole new market for tablets, and a whole new swath of affordable tablets to fill it.
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