Amazon.com could sell 2.4 million Android tablets in 2012, only cannibalizing the company's Kindle e-readers a touch, according to Piper Jaffray analyst Gene Munster.
Amazon.com has not confirmed the existence of an alleged
Android tablet computer, but that isn't stopping one analyst from modeling unit sales for the erstwhile Apple iPad rival.
Piper Jaffray analyst Gene Munster said he believes Amazon
could sell 2.4 million Android tablets in 2012, following a late 2011 launch in
time for the holidays.
Munster is basing his information on a recent report by
Creative Strategies analyst Tim Bajarin, who
wrote that Amazon is aiming to release at least one tablet computer based on
Google's Android operating system in time for the holiday 2011 season.
Bajarin
said in a PC Magazine piece that the e-commerce giant plans on releasing a 10-inch tablet,
and possibly a 7-inch tablet, later this year.
Bajarin expects the 7-inch tablet to be priced at $349,
with a 10-inch model offered for $449. Those prices assume Amazon will
subsidize its tablets similar to the way it does with its Kindle e-readers. Amazon,
for example, began
selling an ad-supported Kindle for $114 last month.
Indeed, Munster believes an Amazon slate would join the
Kindle e-reader family as a means to an end, representing yet another vehicle to
peddle the popular Kindle digital book application.
Munster said his expected Amazon tablet sales of 2.4
million units will add just a "fractional contribution" to his 2012 estimates
for the company, presenting no measurable impact on sales or earnings.
"Our overall Kindle sales (tablets and traditional
Kindles) currently account for 3 percent of overall Amazon sales, but would
account for 4 percent of revenue in 2012 if the tablet is a reality,"
Munster wrote in a research note May 27.
With a tablet (or tablets) likely costing three to four
times the cost of the Kindles, the analyst also expects the Amazon tablet will
only slightly eat into its Kindle e-reader count next year as Amazon will
continue to mark down Kindle prices.
Munster believes Amazon will sell 13.5 million Kindle e-readers
in 2012, up from 7.3 million in 2011, but down from his current modeling of 15
million units.
The introduction of a new Android tablet invariably invites
comparisons to Apple's iPad. Amazon's 2.4 million tablet unit sales would hardly post a threat to the iPad, which the analyst expects will sell 44.8 million in 2012.
Munster has anecdotal evidence to support his belief. He
noted that in a survey of 250 iPad buyers conducted during the iPad 2 launch,
nearly 80 percent of people who bought an iPad did not consider any other
device prior to buying.
"Apple's customer loyalty and significant market
share leaves a number of competitors fighting for less than a third of the
tablet customer base in CY12," Munster said.
The remaining questions about the Amazon tablet(s) are
legion.
How much will it really cost? Who is making the tablet(s) and what software beside the Kindle app for Android
will make it on the slate(s)? Will Amazon support Google's Android Market, as
well as its Amazon Appstore for Android?
WiFi-only or WiFi+3G? What carriers will offer it? Amazon has become cozy with all of the carriers by selling their phones through the Amazon Wireless store.
People became convinced Amazon was building a
tablet after the company
launched its Android Appstore in March. Amazon CEO Jeff Bezos left little doubt
when he cryptically
told Consumer Reports to "stay tuned" when asked about a tablet.
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