Kindle Fire: A Gateway Drug to the iPad

Kindle Fire: A Gateway Drug to the iPad

Amazon’s impressive $199 Kindle Fire has been fairly successful, but can it compete with the iPad? MacRumor reports that, according to new research notes from two separate analysts, probably not – but both devices can still remain successful.

According to both analysts’ observations, the Kindle Fire is doing very well, but it isn’t posing a direct challenge to the iPad. Instead, the Kindle Fire appeals to a different type of consumer, and could actually encourage iPad purchases by acting as a “gateway drug”.

From Evercore Partners analyst Robert Cihra (reported by Apple 2.0):

While Amazon’s Kindle Fire has come out of the gates strong, as expected, we see Apple maintaining its competitive lead, if anything accentuated by what now looks like the only tablet to so far mount any credible iPad challenge apparently needing to do so by selling at cost […] Meanwhile Apple goes on as the only vendor able to cream off the most profitable segment of each market it targets, whether tablet, smartphone or PC.

Meanwhile, JP Morgan’s Mark Moskowitz echoes the idea, stating that Apple really isn’t seeing pressure from the Kindle Fire, and current owners of the Kindle Fire could “gravitate to more feature-rich experiences” later as a result of the Kindle Fire offering a taste of the tablet experience just big enough to make them want more.

GigaOM’s Darrell Etherington:

I think Apple’s optimistic outlook should pan out, however, as long as one thing remains true: tablets continue to encroach upon and replace PCs as primary computing devices for general users. In that case, the Kindle Fire and the iPad likely will enter into a mutually beneficial orbit, with the cheaper device’s drawing in first-time tablet users and the iPad’s acting as a sort of graduation gift for when they opt to use tablets as their main computers.

It’s a very interesting notion, especially considering that Apple executives “welcomed” the Kindle Fire from the very beginning, ultimately feeling it would do little more than further fragment Android, which would help Apple in the end.

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