Has Amazon.com Inc. come up with the first real competition for Apple Inc.’s iPad? Early indications among tech writers suggest that it has – and the stock market, still licking its wounds after early excitement over tablet computers from Research In Motion Ltd. and Hewlett-Packard Co. , seems to agree: Amazon shares rose 4.6 per cent on Wednesday, following the official launch.
The relative failure of previous tablet launches (Apple still controls the vast majority of tablet sales) seemed to indicate that consumers were primarily interested in iPads, not tablets. And while Amazon’s Fire tablet appears to fall short on the same features that others have – primarily applications, but also the fact that it is WiFi only – the big surprise with Wednesday’s launch is the aggressive price: $199 (U.S.), or $300 below Apple’s cheapest iPad.
At that price, consumers may be willing to part with iPad dreams when the Fire goes on sale in November. Market Beat has some early reactions from analysts. Citigroup’s Mark Mahaney said: “We had assumed that Amazon would be aggressive with pricing, but not THIS aggressive. Assuming the products hold up, we believe there should be a path here to multi-million unit sales in the near- to medium-term for both the new eReaders and the Fire.”
And from Hudson Square’s Daniel Ernst: “Driven by the expanded content offerings including films, television, magazines, games, and the very low price compared to the iPad and other Android tablets, we believe the Kindle Fire is well positioned to take tablet share in the consumer market.”
Then again, few investors seem concerned about the impact on Apple. The shares were up 0.3 per cent in afternoon trading.