Amazon Taking on Apple and the iPad? It’s All About Pricing

Andrew Nyquist

Tablet, pc, handheldI was interviewed earlier today by SmartMoney on the Amazon Kindle tablet launch and asked more specifically for thoughts on the perception of the “Kindle Fire” being a real threat to the Apple iPad 2 – click here to read the article.

Now I’m not a product specific expert by any means, so I kept my thoughts very high level.  Here’s a summary:

 

1)   Amazon’s AMZN earnings and marketing machine and online retail presence may pose a bigger threat to the iPad than the Kindle Fire device itself.  Further, highly competitive pricing on the Kindle lineup will apply “media” pressure on Apple (AAPL) to reduce prices.  Just look at the headlines, many of which focus on price.  This isn’t to be taken lightly with holiday shopping season around the corner.

2)   This launch will test the brand of Amazon and the loyalty of Amazon Kindle users.  We know how deep Apple’s brand loyalty runs, but will existing Kindle users be willing to trade up?  And, further, will Amazon be able to drive significant new trial with the launch?  This will be huge.

3)   Amazon has a nice audience, and their tablet should and will find it’s place within the category, but will there be enough buzz to last through the holidays. The Kindle is a great product, but that was “their” product.  Tablets are largely Apple’s product and are already highly competitive.  Furthermore, the enduring excitement that comes with starting a category, like Apple’s iPad, or leading an innovative segment, like Amazon’s Kindle, isn’t there.  Will consumers just see this as another product upgrade?

Largely, I think the product will do well, but a lot will depend on how Amazon and its analysts define success.

Click here to read another recent article by SmartMoney where I was quoted/cited.

 

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