Strategy

Kindle Fire puts the heat on the iPad

While the Kindle Fire can't match the success of the iPad yet, its startling growth shows it is a viable alternative tablet at a great price.

No one’s predicting the downfall of the iPad— there’s a fine line between bold and stupid— but Amazon’s Kindle Fire will singe away tablet market share from almighty Apple, to say nothing of Samsung and Motorola. While the company hasn’t announced when the product will be available in Canada, it’s only a matter of time before it shakes up our market as it has done elsewhere. Between the low-end price and high-end media options, and packing an Amazonian content punch, the Fire is positioned just differently enough to appeal both to not-quite-ready-for-iPad consumers and as an auxiliary tablet for iPad families.

Critics point to its small screen size, and lack of camera, mobile connectivity or slot for removable storage. Justified gripes all—but not at US$199. Kindle owners get unlimited storage in Amazon’s cloud through Wi-Fi, which also serves up access to more than a million book titles, including free bestsellers in the Kindle Owner’s Lending Library, and more than 100,000 TV shows and movies. Kindle’s Netflix and other apps offer even more ondemand streaming. And with Amazon’s oneclick purchase technology, it’s all just a single tap away. It’s the perfect doorway into Amazon’s growing digital ecosystem that is competing head-to-head with Apple’s iTunes, App Store and iCloud. The Fire also directly taps Amazon’s mammoth analogue portfolio, ranging from appliances to garden supplies.

The Kindle Fire has managed to maintain the momentum it got with the burst of hype at its debut. Research firm IHS has forecast that Amazon would ship 3.9 million of the devices in the last three months of 2011, representing a 13.8% share of the global market. Although that’s not yet much of a threat to Apple’s 65.6% market stranglehold, it’s almost triple Samsung’s share. “A competitor has finally developed an alternative which looks like it might have enough of Apple’s secret sauce to succeed,” IHS researcher Rhoda Alexander concluded. Robert Cihra, another industry analyst, thinks Kindle Fire could “vaporize” other tablets running the Android operating system, and comprise 50% of Android tablet sales this year. Between that and reports that Amazon will unveil a bigger, 8.9-inch version by mid-year, Apple should expect to feel a lot more heat.