Apple’s iPad is currently dominating the tablet market; however, this can change with Amazon’s release of the Kindle Fire. Available on November 15, the Fire has been predicted to surpass the iPad in first-month sales.1 For only $199, the Fire offers a 7 inch coloured touchscreen, 6 GB of free space, unlimited storage on Cloud, more apps than Apple, and immediate access to Amazon’s online store. It is an affordable alternative to the $500 iPad and other similarly priced tablets.
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The low price point has also sparked a debate regarding if Amazon will earn a profit from the Fire.2 UBM TechInsights has predicted a manufacturing cost of $150, whereas others estimate a loss of $10-50 per unit. Some are even speculating that Amazon’s only profits will come from sales on Amazon.com. More accurate cost calculations can only be made after the Fire’s release.
The Fire is the first of its kind to bring the shopping experience to the consumer. It is a brilliant business scheme, as consumers are paying (for the Fire) to buy more (from Amazon.com). If Amazon’s online store remains priced competitively, Amazon will widen its consumer base and see an increase in sales through the Amazon marketplace.
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1. http://www.foxnews.com/scitech/2011/10/09/5-reasons-amazon-kindle-beats-ipad/
2. http://news.cnet.com/8301-1023_3-20114722-93/amazon-kindle-fire-profit-or-loss-for-retailer/
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