Industry observers have great faith in Amazon’s impact on the tablet market after the release of Kindle Fire. Yesterday, Robert Cihra from Evercore Partners writes in a report that Amazon is expected to gain 50% of Android tablet market next year and to emerge as a strong competitor for Apple. He also observes that Kindle Fire might “vaporize” other Android tablets focused on profit.
Selling at $199 Kindle Fire managed to appeal to entry level users interested in a tablet experience but for a convenient cost. After a little more than a month on the US market Kindle Fire was well received not only as a e-reader benefiting from Amazon’s significant digital library, but also for its streaming music and film services. No wonder that Amazon’s founder and chief executive, Jeff Bezos considers Kindle Fire a “premium product”, since it already attracted million of buyers in the first week of availability. Tim Cook on the other hand, declared recently he is not at all worried by Amazon’s new tablet, as the newcomers attracted by the low price will want to upgrade to a better tablet and they will eventually look for a real iPad experience.
Robert Cihra’s estimates for Apple are very conservative and the teams in Cupertino are not encouraged to celebrate a spring success. In the first quarter of next year Apple’s revenue is believed to drop from $39.4 billion to $39.1 billion. Also iPads sales estimates must be readjusted as the market prepares for the release of the next generation iPad, and instead of expecting sales of 15 million units in the first quarter, Cihra suggests a more realistic estimate will be sales of 14 million iPads.