Amazon's Fire no iPad killer, experts say

'No reason for Apple to worry' about $US199 tablet

Amazon's new Fire tablet may disrupt the Android market, but it's unlikely to have a significant impact on Apple's iPad business, according to analysts.

Earlier today, Amazon CEO Jeff Bezos introduced the Fire, a 7-in. backlit-color screen tablet priced at $199 that will start shipping in mid-November.

The Fire is powered by a customized version of Google's Android mobile operating system, has 8GB of storage -- half that of the lowest-priced iPad -- and weighs about 33% less than Apple's iPad 2. Amazon will sell only a Wi-Fi version of the tablet.

Experts saw it as a negligible threat to Apple's tablet, and cited a variety of reasons.

"Hardly an iPad killer," said Brian White of Ticonderoga Securities, in a note to clients today. "While Amazon's price point, installed base, digital content and cloud ecosystem will attract a certain consumer demographic to the Kindle Fire, there is still no real competitor to the iPad 2."

Others agreed.

"I think it's more disruptive of the Android tablet market because of its price point," said Carolina Milanesi, an analyst with Gartner. "Android competitors like Samsung will be impacted by the Fire's price, much more so than something that has the Apple logo on it. So there's no reason why Apple should worry today."

Milanesi sees the Fire as "all about consumption and buying behavior" because of who is selling it, its size and hardware specifications, and the tight integration with Amazon's online markets for apps, books, music and movies.

"A seven-inch tablet is for content consumption," she said, "not for the kind of content creation that can be done on the iPad."

She also noted that the Fire lacks some of the iPad's features, including a microphone and camera. "There are lots of things that are missing from the Fire," she said.

Not that that wasn't smart of Amazon, which is selling the Fire to push the products and services it sells.

"The point of the Fire is to sell more content, and keep customers within the Amazon ecosystem," she said, pointing out that there's no need for, say, a camera when Amazon can't parley that into a sale of some sort.

Ezra Gottheil, an analyst for Technology Business Research, also thought that the Fire won't pose an instant threat to the iPad. In fact, the Fire's price only reinforces the split nature of the tablet market.

"The under-$200 price point has been thriving, while the Android competitors who have priced their tablets at Apple's range have not," said Gottheil. "What's emerged is a two-level market."

Gottheil cited the success of Amazon's low-priced Kindle e-readers and the race to acquire an HP TouchPad when that company dumped them at fire sale prices last month.

"Is there going to be overlap between the Fire and the iPad? Sure," said Gottheil. "I don't have any doubt that [the Fire] will have success. But for the most part the market has already bifurcated. And Apple owns, and will continue to own, the higher end of the tablet market."

Some consumers will opt for the lower priced Fire. "There will be a little loss to Apple, but for the most part, consumers will ask themselves this question: 'Do I want a $200 tablet or a $500 tablet?'" said Gottheil.

And those who answer the latter will continue to head to Apple.

But both Milanesi and Gottheil acknowledged that Amazon will be the most serious threat Apple has yet faced in the tablet market. And they each cited Amazon's content-selling capabilities as the reason.

"I think this really proves the point that an end-to-end concept is the right one," Milanesi said. "It's not just about the hardware," she added, something that Apple has proven. "It's all about the right ecosystem."

White was more pessimistic about the Fire's chances of unseating the iPad as the tablet leader.

"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," he said.

Longer term, however, Gottheil was ready to predict that Apple will answer the Fire with its own 7-in. tablet, and price that version of the iPad lower than the current 10-in. model. "Apple will have a seven-inch iPad that will be less expensive, but not at the totally lower price point of $200," said Gottheil. "That's not in the company's philosophy."

Milanesi agreed.

"Apple won't match Amazon's price point, it will continue to be a premium product," she said. "But at some point, they'll have to offer price points [under the current $500]."

Gottheil stood by his prognostication even after being reminded that former Apple CEO Steve Jobs said last year that the company would never do a smaller iPad.

Last October, Jobs pooh-poohed the smaller Android tablets that were then starting to appear.

"There are clear limits of how close you can physically place elements on a touch screen," he said at the time. "We think the current crop of seven-inch tablets are going to be DOA. Their manufacturers will learn the painful lesson that their tablets are too small and increase the size next year."

"Yes, basically he said there was a size below which they won't go," acknowledged Gottheil. "But he said that because Apple didn't, and doesn't, have a 7-in. tablet."

But White countered by knocking the Fire's size, other hardware limitations and what he called a "tired" interface.

"We find the seven-inch screen too small for a tablet device, previously highlighted, while the lack of a 3G connection will keep consumers confined to a Wi-Fi world," said White.

Amazon is now taking pre-orders for the Fire from U.S. buyers on its website, but won't start shipping the tablet until Nov. 15.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags mobilitytabletsApplehardware systemsamazon.commobile solutions

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Gregg Keizer

Computerworld (US)
Show Comments

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?