Amazon gets BURNED, or iPad puts out Fire's fire

[Macman45]

Absolutely Right

Epic fail, if one cannot understand basic business.

Obviously there's a complete lack of understanding about the Kindle Series.

Amazon will sell these in massive volume. Anyone who's used a current generation Kindle will understand.

I have had three Kindles, as I upgrade each product cycle, the same way I do with iPads. These two are each unique and have their place in the market.

I find an iPad AND Kindle are must have devices for my needs. They're each exemplary at what they were designed for.

There's more than enough room in the marketplace for both. Why Apple worshipers are so obsessed with "the Win" is really quite childish.

The kindle will sell by the bucket full. It's priced right, and people do other things with portable devices other than read books. I don't use my iPad for reading much, I prefer the printed media. The Fire will certainly NOT give Amazon a bloody nose finically.

 

[miles01110]

The ultimate irony with these types of posts is that they just betray how nervous certain people are about the iPad's competitors. And for what? The only people that should worry about the iPad slipping is Apple.

 

[btbrossard]

The iPad will continue to do just fine.

And the Kindle Fire will do just fine, as well.

For one device to be successful doesn't mean the other device must be destroyed.

 

[jsh1120]

Yeah, how's that working out for you in areas with no signal? Does you 4g phone work at 33,000 feet? You get good signal in places like hospitals? How about on a road trip or camping trip in areas with no signal? How about when you leave the U.S.?
Or are you one of those people that never go anywhere, so it doesn't matter? I've done a lot of travelling overseas, and I can tell you right now, the little Fire wouldn't last a trip to Europe. Battery would die long before you got there, not to mention the lack of storage would limit you to maybe two movies and a couple of apps. But to eqch his own.

Perhaps you don't understand how a mobile hotspot works. If the 4G signal isn't available it uses a 3G signal. If I'm camping where there is no signal at all my hotspot is dead. Right. So is the 3G iPad sitting next to it. And if the cellular signal is weak my playing card size mobile hotspot grabs it far better than my 3G phone or a 3G iPad. Difference is that with a 4G/LTE mobile hotspot I can get 4G speed when it's available on up to five devices at a time. Try that with a 3G iPad.

In Europe? I just change the SIM card. I'm sure you're familiar with that procedure.

Traveling on a 6-8 hour flight? Does your 3G iPad get a signal at 33,000 feet?

As far as battery power, the Fire should be fine on a 6-8 hour flight. But if not, the Fire can be recharged from my laptop battery. Try that with an iPad.

Storage? Yup. Probably couldn't fit more than 2-3 movies on the device or maybe 2000 books. And if I'm tired of reading/watching I can always select one of the 30-40 movies available on the screen staring at me from the seat ahead.

 

[miles01110]

Yeah, how's that working out for you in areas with no signal? Does you 4g phone work at 33,000 feet? You get good signal in places like hospitals?

Do you get good 3G reception in places like hospitals? The LTE frequency bands in the US will penetrate thick walls significantly better than a 3G signal at comparable power levels. I don't think you know what you're talking about.

How about when you leave the U.S.?

"Leave the U.S." as in "go somewhere where LTE coverage is years ahead of the United States" ? Argument fail.

I've done a lot of travelling overseas, and I can tell you right now, the little Fire wouldn't last a trip to Europe.

I don't think you've ever been to Europe or used a Fire. Even if it doesn't last the entire trip (which is a nebulous argument in itself, because depending on where you fly from in the US the iPad isn't going to last either) you'll probably be sleeping for a good part of it based on when flights to Europe depart from the US.

 

[eastercat]

You obviously don't hang out at a lot of hospitals.
A number of hospitals have put up antenna enhancers for their employees and visitors. When I worked in the basement of one hospital, I couldn't get a signal. However, after they put in an at&t antenna, I was getting 3 bars of 3g.
Also, even more hospitals have wifi. So getting a signal is not the issue you make it out to be.

You get good signal in places like hospitals?

 

[rhinosrcool]

oh boy, here we go. apple has a legitimate contender and the insecure superfans start gloating over misinformation from the same analysts that they regularly scoff at.

Nice

As much as I like my iPad, for reading ebooks, it's a little too big. For me, and I expect millions of others, the Kindle Fire will be a very useful device. Also, the 7" tablet form factor is, even though the iPad is extremely portable, even more portable. When I had a 7" tablet, it fit in my cargo pants pocket just fine. If Apple makes a 7" iPad, it would be sweet. Who knows?....(none of you do-so spare me the reasons why they won't).

 

[Chupa Chupa]

Tell me if I am off base, but Fire looks like it will be a disaster for Amazon no matter what happens, both in that each Fire sold will cost Amazon plenty (per device sold), or by users who think Fire does not light their fire and don't get it, or worse, return it.
I think after the initial buying spree reviews will be middling and sales fall. Oh, I am sure Fire will have strong sales and do well, but not threaten iPad.

I'm not going to tell you you are "off base" because you raise legit points. But I think you might be overstating them. You are correct that Amazon is using the razor and blade sales model, and it's no shocker they are losing initially on each sale. However, just about everything you load into the Fire must originate from Amazon. You can't even hook it up to a computer. And keep in mind it only has a paltry 8GB internal storage so Amazon Cloud becomes a key component. Long term Amazon will make up the loss and more. It's very similar to the Prime program. $75 for "all you can eat" 2day shipping -- it encourages people to shop Amazon first and often.

The other flaw in the iPad vs Fire "argument", I think, is the mistaken belief the two are competitors. Yes, both are tablets and have similar functions, but the Fire is more of a "dumb terminal," powered by Amazon to the iPad's "desktop computer" with connectivity to iTunes and the App Store. There is a place for both, and each serves a different market.

The question of the Fire's long term success though is not guaranteed for the reasons you state though. Just as I don't see the Fire and iPad sharing similar demographics, I don't see the classic Kindle sharing demographics with the Fire because the Fire is more of a media player than a reader. But I think Amazon has a similar loyal following as Apple and a CEO willing to see the Fire succeed that it will become a terrific portal to the site, and that is really the point of the Fire -- to draw in customers to buy other stuff, not to beat up the iPad.

 

[PracticalMac]

Epic fail, if one cannot understand basic business.

Obviously there's a complete lack of understanding about the Kindle Series.

Amazon will sell these in massive volume. Anyone who's used a current generation Kindle will understand.

I have had three Kindles, as I upgrade each product cycle, the same way I do with iPads. These two are each unique and have their place in the market.

I find an iPad AND Kindle are must have devices for my needs. They're each exemplary at what they were designed for.

There's more than enough room in the marketplace for both. Why Apple worshipers are so obsessed with "the Win" is really quite childish.

Bloomberg doesn't know the power of quantity buying. The higher quantity of parts you buy the cheaper they are. Sell 5 million and what everything thinks is a $210 device actually costs the manufacturer as little as half that. And even if it does cost $204 to make Amazon will make that $5 back plus far more in content/product sales within the first 30 days to see plenty of profit.

What is the difference between Amazon kindle fire and saying like selling xbox 360?

When Xbox 360 launched, they were selling the system at a loss. They made profits by selling games and accessories.

Same thing applies here.

10 dollars is not that much of a loss for company like amazon who has billion of dollars in cash reserved. They also have great distribution on selling games, acessories, apps, music and books.


These analysts are just fools.

*sigh*
IF the company can CONTROL the price of the media (music, movies, games, ink), THEN they can sell a player at a loss and make profit. This is how XBox, Sony, and Nintendo makes profits by charging premiums on the software, the media.

Amazon does NOT control the media, so they do NOT have a captive market.

Yes, they are the market leader, party becuase the sell eBooks to NON-Kindle players.

In the first place the belief that it costs Amazon $209 to build the Fire is pure speculation. Googling that topic produces the usual blizzard of hits all based on the same analyst's estimates. Other estimates place the cost at $160.

"...But UBM TechInsights, another specialist in the field, on Wednesday produced a $150 cost estimate that indicates the hardware turns a profit on its own. That figure doesn’t include fees associated with manufacturing, which the firm estimates might take the total to slightly above $160..."

http://blogs.wsj.com/digits/2011/09/30/two-views-on-the-cost-of-amazons-kindle-fire/

Furthermore, Amazon has been spectacularly successful in the past in squeezing the cost of their inventory. There is no reason to suspect that they will suddenly begin to fail at that practice.

Additionally, Amazon will likely be quite successful in driving new purchasers to their "Prime" membership, a $79 annual charge that costs Amazon virtually nothing in delivering electronic content.

The nay saying comes from investors who would like to see a higher per unit profit margin out of Amazon. Not exactly a surprising point of view of investors who want their investments to pay off yesterday.

All in all, Jeff Bezos and Howard Schultz have a lot in common. Each is a Seattle entrepreneur. Each started a business that most observers thought doomed to failure. ($3 for a cup of coffee????). Each has managed to survive rather well. I wouldn't bet against either of them.

Good points, but if you consider how much other tablets cost to make, you really have to wonder how Amazon could get their so low.

Understand those estimate was just for hardware (and $11 cost of assembly?)

NOW consider packaging and shipping to stores, the marketing campaign, and don't forgot Licensing fees and Development costs.

Amazon is likely selling Fire at just about cost, and the ability to make profit on it by selling media is tenuous.


Remember the NetBooks, while usable they where not practical, and in the end was pretty much a fad and overall disappointing.

Cheap is like a plastic knife; it just can't cut it.

 

[PracticalMac]

I'm not going to tell you you are "off base" because you raise legit points. But I think you might be overstating them. You are correct that Amazon is using the razor and blade sales model, and it's no shocker they are losing initially on each sale. However, just about everything you load into the Fire must originate from Amazon. You can't even hook it up to a computer. And keep in mind it only has a paltry 8GB internal storage so Amazon Cloud becomes a key component. Long term Amazon will make up the loss and more. It's very similar to the Prime program. $75 for "all you can eat" 2day shipping -- it encourages people to shop Amazon first and often.

The other flaw in the iPad vs Fire "argument", I think, is the mistaken belief the two are competitors. Yes, both are tablets and have similar functions, but the Fire is more of a "dumb terminal," powered by Amazon to the iPad's "desktop computer" with connectivity to iTunes and the App Store. There is a place for both, and each serves a different market.

The question of the Fire's long term success though is not guaranteed for the reasons you state though. Just as I don't see the Fire and iPad sharing similar demographics, I don't see the classic Kindle sharing demographics with the Fire because the Fire is more of a media player than a reader. But I think Amazon has a similar loyal following as Apple and a CEO willing to see the Fire succeed that it will become a terrific portal to the site, and that is really the point of the Fire -- to draw in customers to buy other stuff, not to beat up the iPad.

Excellent points!
Love that "Dumb Terminal" analogy!

The one point I counter is the market:
I can buy Amazon eBooks for iPad, iPod, iPhone, Android, laptop, and desktop.
There is no compelling reason to get Fire.

And i would rather get an e-Ink $99 Kindle then Fire. That would be a far better combination of iPad and Kindle.

The best part, for months Amazon was advertising how Kindle (e-Ink) could be read under full sun, while the (iPad) competition was very, very difficult. How many customers will think Fire can do the same? Bunches, I am sure.

Perhaps Fire is more a response to the B&N Nook then iPad?

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The iPad will continue to do just fine.

And the Kindle Fire will do just fine, as well.

For one device to be successful doesn't mean the other device must be destroyed.

Wow, the boat left last week.

My post was on Amazons marketing, undercut the price to the point Amazon bleeds.

I clearly said Fire will sell well, but not threaten iPad

 

[ericrwalker]

Is something loose?

 

[PracticalMac]

The ultimate irony with these types of posts is that they just betray how nervous certain people are about the iPad's competitors. And for what? The only people that should worry about the iPad slipping is Apple.

Lets just say it is a long winded post to simply say:

Amazon's operating margin, that is NET profit, will be down the quarter after Fire's release.

 

[kdarling]

Amazon does NOT control the media, so they do NOT have a captive market.

I haven't kept up with the Fire. Will Amazon allow downloads to the Fire from anywhere... or just from their own media store?

For opposite example, I just had to grab a copy of "Charlie and the Chocolate Factory" for my daughter's book report. First I went to Amazon but they don't sell a digital version. I had to go to B&N and buy it for my Nook Color instead.

Good points, but if you consider how much other tablets cost to make, you really have to wonder how Amazon could get their so low.

The Fire is supposedly based off the Playbook which cost $170 to make, and the Fire leaves out memory, Bluetooth, GPS and cameras.

Note that I and many others bought the B&N Nook Color for $199. Since then, I've bought magazines and books for it.

Amazon is likely selling Fire at just about cost, and the ability to make profit on it by selling media is tenuous.

That doesn't follow. If someone buys a Fire, they're most likely buying it to consume media. Unless you think that lots of people will buy it just as a browsing device.

 

[palpatine]

Lets just say it is a long winded post to simply say:

Amazon's operating margin, that is NET profit, will be down the quarter after Fire's release.

Really? They are releasing the Fire before Christmas, it has no other significant competition in that price range (unless B+N puts out an amazing refresh of their Nook), they have more than 250,000 on pre-order, and (as a Kindle owner I can attest to this) they have a ton of content that people with the new device will buy.

1.
I really think you are overemphasizing this supposed (no proof, just speculation) loss they are supposed to be taking on each device.

2.
And, given Amazon's massive size, I think you are also over-inflating the importance of this single device.

3.
You are also not factoring in the costs of R+D and other investments they have been making in previous quarters, which have already been factored into lower profits in those quarters in order to prepare for demand. In other words, I think we will see exactly the opposite of what you predict.

 

[PracticalMac]

Really? They are releasing the Fire before Christmas, it has no other significant competition in that price range (unless B+N puts out an amazing refresh of their Nook), they have more than 250,000 on pre-order, and (as a Kindle owner I can attest to this) they have a ton of content that people with the new device will buy.

1.
I really think you are overemphasizing this supposed (no proof, just speculation) loss they are supposed to be taking on each device.

2.
And, given Amazon's massive size, I think you are also over-inflating the importance of this single device.

3.
You are also not factoring in the costs of R+D and other investments they have been making in previous quarters, which have already been factored into lower profits in those quarters in order to prepare for demand. In other words, I think we will see exactly the opposite of what you predict.

Good points.
Yes, Fire is not Amazon, and even if Fire does cost Amazon it will not be a disaster.

As for competition, kdarling just pointed out the B&N Nook Color is $199.
I would expect other small tablets dropping their price in competition, be a bigger threat then iPad.

No doubt Amazons size is a major factor in sales, but that alone is not a compelling reason to buy Fire.

 

[mwulf67]

However, just about everything you load into the Fire must originate from Amazon. You can't even hook it up to a computer.

This really a true statement? It was my understanding it had a USB port and that you could load your own content (movies, eBooks, music)....

 

[notjustjay]

Tell me if I am off base, but Fire looks like it will be a disaster for Amazon

OK: You are off base.

This really a true statement? It was my understanding it had a USB port and that you could load your own content (movies, eBooks, music)....

No, it does have a USB port and you can treat it like a USB drive. You can also email it your documents if you prefer. A more accurate statement would be "you don't need to" or "you may not ever want to" connect it to a computer. I haven't ever hooked up my Kindle 3, and yet I read from it every day. I only ever plug it in to charge once every few weeks.

I'd be interested in the Fire but it won't be available in Canada initially; meanwhile, the Kobo Vox ("Canada's Kindle", if you will) tablet is also going to be $199 and looks like it will compete squarely with the Fire and the Nook. Looks to be very interesting.

On the other hand, the Playbook is currently on sale everywhere for $299...

 

[Mac.World]

Do you get good 3G reception in places like hospitals? The LTE frequency bands in the US will penetrate thick walls significantly better than a 3G signal at comparable power levels. I don't think you know what you're talking about.



"Leave the U.S." as in "go somewhere where LTE coverage is years ahead of the United States" ? Argument fail.



I don't think you've ever been to Europe or used a Fire. Even if it doesn't last the entire trip (which is a nebulous argument in itself, because depending on where you fly from in the US the iPad isn't going to last either) you'll probably be sleeping for a good part of it based on when flights to Europe depart from the US.

I love the LTE argument. How many cities in the US actually have it? Can the majority of the population use it?

And LTE in Europe? Light years ahead of the US? LOL. You might want to do some research.

So I've never been to Europe? Got news for you little boy, I've been to more countries and crapholes in this world than you can imagine. I've probably been in the military longer than you have been alive. And no, I haven't used a Fire. Not many people have.

 

[farmboy]

Bloomberg doesn't know the power of quantity buying. The higher quantity of parts you buy the cheaper they are. Sell 5 million and what everything thinks is a $210 device actually costs the manufacturer as little as half that. And even if it does cost $204 to make Amazon will make that $5 back plus far more in content/product sales within the first 30 days to see plenty of profit.

Bloomberg is a billionaire, so I think he gets the concepts of capitalism and business pretty well.

 

[mwulf67]

OK: You are off base.



No, it does have a USB port and you can treat it like a USB drive. You can also email it your documents if you prefer. A more accurate statement would be "you don't need to" or "you may not ever want to" connect it to a computer. I haven't ever hooked up my Kindle 3, and yet I read from it every day. I only ever plug it in to charge once every few weeks.

I'd be interested in the Fire but it won't be available in Canada initially; meanwhile, the Kobo Vox ("Canada's Kindle", if you will) tablet is also going to be $199 and looks like it will compete squarely with the Fire and the Nook. Looks to be very interesting.

On the other hand, the Playbook is currently on sale everywhere for $299...

Thanks, I too have an interest in the Fire, not for myself (I have an iPad 2), but for my 11 year old daughter (she is saving her own money to buy a tablet; she will likely have saved enough for a Fire by/after xmas)....the price point is great, but only if I can load my/our pre-existing content on to the device....

I am not completely sold on the Fire, but it appears to be a strong and interesting contender...

 

[nefan65]

Epic fail, if one cannot understand basic business.

Obviously there's a complete lack of understanding about the Kindle Series.

Amazon will sell these in massive volume. Anyone who's used a current generation Kindle will understand.

I have had three Kindles, as I upgrade each product cycle, the same way I do with iPads. These two are each unique and have their place in the market.

I find an iPad AND Kindle are must have devices for my needs. They're each exemplary at what they were designed for.

There's more than enough room in the marketplace for both. Why Apple worshipers are so obsessed with "the Win" is really quite childish.

Serious question here...what benefit is there to owning both the iPad AND the Kindle? Just curious really. I assumed since the iPad has a book reader/store built in, and has a Kindle App, it would be redundant?

Again, serious question, not judging. Curious as to whether others do this too?

 

[jsh1120]

I love the LTE argument. How many cities in the US actually have it? Can the majority of the population use it?

As of today....

Otherwise, this will bring the Verizon 4G LTE coverage to more than 110 million customers with speeds ranging anywhere from 5 to 12 Mbps on the downlink and anywhere from 2 to 5 Mbps on the uplink.

And lastly, looking forward, Verizon has plans to further extend the network on November 17th which will bring the total number of available markets up to 178 cities.

http://nexus404.com/Blog/2011/10/20...ons-in-new-mexico-indiana-iowa-new-york-more/

A year from now Verizon expects to blanket the entire US. Been using it in various cities here on the West Coast for the last six months. In fact, traveling up and down the West Coast, I've used 4G about 75% of the time.

Sprint expects to provide coverage for 120 million customers in 2012 and 250 million in 2013. AT&T will cover 70 million customers in 15 markets by the end of this year with full coverage in 2012. They're definitely behind but that's why I have Verizon.

 

[mwulf67]

Serious question here...what benefit is there to owning both the iPad AND the Kindle? Just curious really. I assumed since the iPad has a book reader/store built in, and has a Kindle App, it would be redundant?

Again, serious question, not judging. Curious as to whether others do this too?

I think the answer given most, is that serious ebook readers value the benefits of a dedicated ebook reader like the Kindle...e-ink, no glare, light weight, one handed operation/holding...I think many who use both have used a Kindle for years before getting an iPad, and as a result, find the iPad lacking as a reader...

 

[PracticalMac]

As far as battery power, the Fire should be fine on a 6-8 hour flight. But if not, the Fire can be recharged from my laptop battery. Try that with an iPad.

Admittedly I have not tried it, but I am pretty sure the iPad will charge from laptop battery too.

 

[jsh1120]

Serious question here...what benefit is there to owning both the iPad AND the Kindle? Just curious really. I assumed since the iPad has a book reader/store built in, and has a Kindle App, it would be redundant?

Again, serious question, not judging. Curious as to whether others do this too?

There isn't a lot of benefit. But the phenomenal sales of the iPad did not come from attracting those with ultraportable laptops, either. The market the iPad opened was among those who might otherwise have purchased an iPod Touch (where sales went into the toilet after the introduction of the iPad.) Amazon doesn't expect to sell the Fire to iPad owners; they expect to sell it to people who don't need or want all of the features of an iPad and don't want to pay for those features.

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Admittedly I have not tried it, but I am pretty sure the iPad will charge from laptop battery too.

Well, you might try it. You'll find it won't unless you're prepared to turn it off and wait for a day or two.