During the all-important shopping period of December last year, Amazon was selling over 1 million Kindle devices each week. That was predominantly thanks to the $199.00 seven inch Kindle Fire, Amazon’s first tablet offering. And while Amazon’s stock recently took a hit thanks to revenues that were not in line with analysts’ lofty expectations, several studies show that the profitability of the Kindle Fire comes over time as Kindle Fire owners continue to purchase applications, games and e-books from Amazon’s proprietary and massive digital library.
Buy the Kindle Fire for $199.
Online research firm Jumptap’s MobileSTAT report shows a 229% increase in tablet purchases during the 2011 holiday shopping period over that same time frame in 2010, and there is much evidence to support the argument that the Kindle Fire tablet was the predominant reason for the large uptick. They also pointed out that Amazon is solidly entrenched in second place in tablet market share with a full 30% of all tablets sold, helping Android tablets to 39% market share, up 10% over the Q4 results from 2010. Apple’s tablet market share dropped from 69% to 59% over that same period.
The Amazon Kindle Fire 7 inch color touchscreen tablet debuted at a $199 retail price, instantly and single-handedly changing the retail pricing strategy of the entire tablet marketplace. As mentioned above, Amazon can make up for that loss leader price by delivering access to their high-margin and low cost proprietary digital content. Apple is the only other major tablet player that provides their own digital marketplace, and because of this, the other tablet competitors are scrambling to discover a way to lower the price on their hardware and somehow make it up on content delivery.
This bodes well for the Kindle Fire in the future, and recent announcements have done nothing to detract from the popularity of the device. The new SlingPlayer app for the Kindle Fire allows for live viewing of television shows and sporting events on the Amazon tablet, as well as DVR recording capabilities. A simple Wi-Fi connection allows the SlingPlayer app to offer options such as watching the Super Bowl live from your Kindle Fire. And in a show of big-name third-party support for the Kindle Fire, Microsoft recently announced a customized Hotmail e-mail application made specifically for the Amazon tablet. The Kindle Fire tablet can hold up to 3,000 e-books at a time, and offers unlimited and free Cloud Storage for all Amazon content loaded onto the device. Buy the Kindle Fire for $199.
