Kindle Fire Could Make Tablet Market a Two-Horse Race

 
 
By Don Reisinger  |  Posted 2011-11-07 Print this article Print
 
 
 
 
 
 
 


 

5. Consumer excitement seems groundbreaking

Looking around the tablet space, it's hard to find a single model besides the iPad that has excited consumers as much as Amazon's Kindle Fire. That's a key component in the fear the Kindle Fire brings to the tablet space. The original Kindle e-reader was highly popular with consumers. It set the stage for consumer interest in the Kindle Fire and helped ensure that it won't be ignored when it starts shipping. Unlike so many previous tablet models, Apple and the other rival tablet makers can't just dismiss the Kindle Fire.

6. It's anybody's game

Unfortunately for the Kindle Fire's competitors, none has been able to establish a dominant position in the Android tablet space. In fact, the tablet market is very much up for grabs right now. Since the Kindle Fire is widely expected to grab some significant market share, that means Amazon seizes the market position that the other Android vendors have been trying to take.

7. It could significantly hurt margins

As noted, the Kindle Fire is significantly cheaper than most tablet competitors. If it catches on, the competition will be forced to drop the prices of their own tablets or offer new less-costly devices to stay in the race. While that might help sales, it could also negatively affect margins. Currently, tablets are profitable. But if the Kindle Fire takes off, there's no telling if that will still be the case.

8. It limits future software opportunities

The Kindle Fire's Android installation is an important component in this story. If the device is successful, it will mean consumers will increasingly turn to Android-based devices. That means companies that aren't offering Amazon on the tablets will need to think about doing so fast. After the Kindle Fire launches, it might very well become a two-OS race in the tablet market.

9. Integrated services push investments up

Like Apple, Amazon has decided to integrate its many services into the Kindle Fire. So, customers will find Kindle ebooks, have access to the company's MP3 store and be able to store content in the cloud. If the Kindle Fire proves successful, other competitors might need to develop and integrate their own services to keep up. And that can be costly.

10. Think about the retail partnership

Amazon's position as a huge online retailer should also strike fear in the competition. After all, the Kindle Fire's competitors rely upon Amazon to sell their own products. If the Kindle Fire takes center stage on the company's site, how might their own devices be affected? Amazon's huge customer base is not only a tool to beat competitors; it's a tool to keep competitor sales at bay.

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Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Gearlog.com. Since then, he has written extremely popular columns for CNET.com, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at http://twitter.com/donreisinger.
 
 
 
 
 
 
 

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