(By Alexander Crawford)
The Kindle Fire has a 7-inch display and runs on Google’s Android software. At a price of $199, it’s less than half the cost of the cheapest iPad ($499), and demonstrates Amazon’s low-cost approach versus Apple’s high cost, high margin strategy.
The lower cost comes with some product limitations: the Kindle Fire does not have an embedded camera or microphone, nor does it have 3G access (it offers Wi-Fi connectivity). The 7-inch screen is also significantly smaller than the iPad’s 9.7”.
Several other tablets have famously tried and failed to take away significant tablet market share from Apple this year: Hewlett-Packard’s (HPQ) TouchPad was discontinued one month after its arrival to the scene, while Research in Motion’s (RIMM) PlayBook shipped less than half of the number of units that analysts expected, reports Bloomberg.
“Amazon is really the only other guy, the only other potential tablet player, that has a similar offering to what Apple has,” analyst at Wedge Partners Corp. Brian Blair said in an interview with Bloomberg last week. “If you look across their product offerings, they have content that none of the other tablet makers currently have because they have content on the media side.”
Indeed, Amazon hopes to leverage their status as the world’s largest online retailer to put forward a bestselling tablet. The product is closely tied to Amazon’s “large and growing content library of movies, magazines, and music,” according to Bloomberg.
“The company has built a tablet-optimised shopping application, with simplified and streamlined pages with none of the clutter of the main website. The app is pre-installed and sits at the bottom of the Fire’s main screen (users can get rid of it if they want).”
Do you think that Kindle Fire will gain market share where other potential iPad competitors have failed? Does Apple have reason to worry?
To help you invest with this idea, we compiled a stock list of companies with a hand in the tablet market:
analyse These Ideas (Tools Will Open In A New Window)
1. Apple Inc (AAPL): Market cap at $ 370.15 billion. It popularised and has dominated the tablet computing industry with the iPad, which generates more than 89% of tablet internet traffic.
2. Amazon.com Inc. (AMZN): Market cap at $ 101.78 billion. The online shopping giant helped pioneer the E-Book industry with its popular Kindle line of products. They are now releasing the Kindle Fire tablet.
3. Google Inc. (GOOG): Market cap at $ 174.15 billion. Google’s Android operating system is currently the most widely used smartphone platform and the second most popular tablet platform. It is used by most non-iPad tablets and non-iPhone smartphones, including the newly introduced Kindle Fire.
4. Research in Motion (RIMM): Market cap at $ 11.87 billion. The BlackBerry maker has released the BlackBerry PlayBook, a tablet PC that runs on the BlackBerry platform, which is mainly targeted at corporate clients.
5. Motorola Mobility Holdings (MMI): Market cap at $ 11.30 billion. The Motorola Xoom is an iPad competitor that runs on the Android OS (like the Motorola Droid line of smartphones). Google made an offer to buy Motorola for $12.5 billion last month.
6. Sony Corp. (SNE): Market cap at $ 19.31 billion. Sony recently debuted the “Tablet S.” Sony’s Reader line of touch screen E-books is a competitor of the Amazon Kindle. Sony is also expanding its line of touch devices with products like the Dash.
7. Panasonic Corp. (PC): Market cap at $ 23.35 billion. Panasonic’s business electronics division sells a line of rugged tablet PCs that accompany its line of Toughbook notebooks. It has also announced a new Toughbook tablet that will run the Android OS.
8. Dell Inc. (DELL): Market cap at $ 27.68 billion. It is challenging the iPad with its Streak tablets that run Google’s Android OS. It also has a “convertible” tablet, the Inspiron duo, which is a hybrid between a laptop and a tablet.
9. Synaptics Inc. (SYNA): Market cap at $ 761.55 million. It develops touch screen technology and manufacturers touch screen displays which are used in tablet PCs, smartphones, and many other touch devices.
Interactive Chart: Press Play to see how analyst ratings have changed for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
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