Apple: Kindle Fire Could Fragment Android Tablets

Apple: Kindle Fire Could Fragment Android Tablets

Photo: andrewchx

Remember the old line about the enemy of your enemy is your friend? Well, that could apply to how Apple views the Kindle Fire tablet from Amazon. Originally seen as a rival to the iPad, the $199 7-inch device could actually scramble an already disorganized band of Android-based Apple competitors.

Only available for preorder for about six weeks, some Wall Street analysts expect up to 5 million of the devices will ship during the holidays. The tablet, heavily intertwined with Amazon services, uses a customized form of Android not totally compatible with other versions. This is what excites Apple and why the tech giant’s CEO and finance chief are not worrying about the threat.

According to Barclays Group analyst Ben Reitzes, who recently met Apple CEO Tim Cook and Chief Finance Officer Peter Oppenheimer, the company views the Fire more as a tool to divert developers from Android, fueling “further fragmentation in the tablet market.” Because the Kindle Fire apps work only Amazon products, the success of the tablet could erode support for Android alternatives – and that can only help Apple.

“The more fragmentation, the better, says Apple, since that could drive consumers to the stable Apple platform,” the analyst writes. Although Apple is likely to trim the iPad’s price the Cupertino, Calif. company will not “compromise the product quality and experience,” he adds.

The first Amazon Kindle Fire tablet, a 7-inch model, goes on sale November 15. A larger version, perhaps 10-inches, will probably launch during the second half of 2012.

What do you think? Is the Kindle Fire a threat to iPad, or just to other Android tablets? Let us know in the comments.

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  • thomin

    I don’t think the Fire will steal many iPad sales and neither will it erode Android. It opens up the tablet market to a new demographic. That’s all…for now at least. In the long term, it will probably harm Apple more than it helps, but then that’s the nature of competition. Bring it on I say. 

  • Yokevin1

    No way this doesnt harm apple.  Apple relies on iTunes sales for a large part of its revenue stream.  Each opportunity where apples loses to a Kindle means they cant get to that revenue stream for books, music, video, etc….they are locked out.  So even though its more of a “low end” device not all users utilize the high end features and that is the immediate threat to Apple revenue.

    That said its hard to say how quickly the Fire will take off and if the infrastructure is up to snuff for these other media outside of books. It may be a different demographic….book readers vs video/music focused people IMO are possibly a different breed.  Ultimately it is the infrastucture that made Apple successful and the ease of use…..that drove the industry for its more expensive products to success.

    Should be a good battle to watch.

  • Daniel Harris

    I’m sure that’s just lip service and they actually do see the Fire as a threat. If they have any sense at all they will take all competitors seriously no matter how much marketshare they have. It’s not good to be over confident says the turtle to the hare.

  • Ian1175

    It may harm sales a little but not in the short term ! you have gotta admit though it is a nice piece of tech for the price and in these times a lot of people have to buy on price.

  • CharliK

    Not could but will. Every variant on the theme does fragment Android. 

  • CharliK

    People who buy on price were never likely to buy an iPad so when they go to get a whatever it isn’t cutting into Apple’s sales. Tim and Peter know this thus why they aren’t worried. 

  • CharliK

    The Fire isn’t designed for the same audience as the iPad, anymore than the Mac Pro is designed for the same audience as the MacBook. 

    Tim and Peter and crew know this and know that those that are in the audience for the Fire were 99% never likely to buy an iPad so they weren’t going to see a sale anyway. When the Fire goes on sale the iPad market share will go down in percent not because the iPad sales went down but because the total tablet number went up when the folks that were’t going to get an iPad because it wasn’t right for them get a Fire because it is. 

  • CharliK

    iTunes isn’t as big as you think. It is in fact barely more than a break even game. The contract fees, the server costs etc eat up all but perhaps 1/10th of 1% of the cut that Apple gets. Thus has been discussed numerous times. Apple’s money comes from hardware sales. 

    By a similar token Amazon uses their music, kindle books etc more as a loss leader to get folks to their site to buy other things, including hardware, which is where their money mainly comes from. 

  • Nivrad6Dm0n

    I think it could be a future threat but not now. Amazon would wipe out those other alternate apps
    and would maybe effect Android. That would be great news for Apple. Amazon could also make another company lose their grip in the tech industry and could make Android to buy off another company to balance their equality with Apple. Its like the motorola thing again. 

  • djrobsd

    good luck with that dude, hope u aren’t holding too much apple stock.  

  • gareth edwards

    I believe it won’t so much fragment the Android slate/pad market as allow it to mature very, very quickly.  The downside to other Android operators will be that the mature Android platform that the Android market wants will be, for all intents and purposes, a closed system – like Apple’s. Amazon know that consumer tie-in is the key to success and they know that the tie-in is based on a solid, well thought out, friendly and understandable offering. Amazon has this in it’s brand and it’s store. They are the ONLY competitor in DroidLand® that understands this and has the infrastructure to make it work.

    I would imagine there will be meetings going on in the background as we speak with bigwigs from the top android hardware partner brands lining up to get on the Amazon gravy train. They will know that Amazon has it stitched up for the Droid mass market going forward and will want it.Maybe it will go down like this. Amazon run their own flavour of Android and have their own hardware. Third parties get an in if they skin their devices as ‘Amazon compatible’ and run Silk as the default browser? They get a sales partner in Amazon, pushing their kit out and Amazon gets more users coming through the doors?Either way, what ever happens I like what Amazon are doing (apart from the snoopy Silk browser), they have a good vision of where their take on the tablet is going and it’s a good bet it’s gonna be huge.

  • CharliK

    you mean that Apple stock that is at $400 a share against Amazon’s $216. 

About the author

Ed SutherlandEd Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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