News Analysis: Even before it starts shipping, the Amazon Kindle Fire has been anointed as a sure hit in the field of 7-inch tablets. But with this distinction comes notice that a strong rival has already been identified-the Samsung Galaxy Tab 7.0.
I know that there's a lot of talk out there about how the Kindle Fire is an
iPad killer or that it will at least drastically cut into the sales of the
speculation is basically hooey
. So you can laugh dismissively when you read
articles. After all you know better. The Kindle Fire and iPad 2 are two
different tablets designed for two different markets and will have little impact
on each other.
the world of 7-inch tablets is a different story. The Kindle Fire is built on a
7-inch platform that's relatively free of most of the typical high-end tablet
features. It only has 8GB of memory, there's no Bluetooth, no camera, no 3G,
but also no high price.
$199 the Kindle Fire is designed to be a low-priced 7-inch tablet designed for
people who have fairly simple requirements, such as Web browsing, listening to
music and reading. Part of the reason it's so cheap (other than the fact that
it's subsidized by Amazon) is that it doesn't have a lot of features.
for many readers, it doesn't need a lot of features. It's got exactly what a
lot of users want, mainly a low price and ease of use.
there are still plenty of users out there who want more. They need Bluetooth,
they want 3G, and they want Android 3.2 ("Honeycomb"). This is what
Samsung is offering in its
new Galaxy Tab 7.0 Plus tablet
. The new Galaxy Tab 7.0 Plus is basically a
power users' wish list. It'll handle 802.11n bonded channels, so that you can
easily exceed the bandwidth of any known Internet connection. The Tab 7.0 will
feature HSPA+ so that AT&T can offer it at a subsidized price. If features
a full HD screen. I could go on, but you can see for
yourself on the Samsung site
is launching the device in Indonesia and Austria first, but the U.S. is high on
the list. The Tab 7.0 Plus should be here in time for the holidays. But how
will it fare in the face of competition from the Amazon Fire? Probably very
well. There are several reasons why.
Samsung Galaxy Tab 7.0 is already inexpensive. You can buy one over the
Internet from Amazon and other stores for around $300. Considering the added
features such as the cameras, the Android 3.2, the 11n speed and the 3G
connectivity, Samsung should be able to make a case for the extra cost if it's
able to maintain the $300 street price.
important, the Kindle Fire will have firmly established the 7-inch tablet in
buyers' minds. Plus with a basic tablet and e-reader selling for $200, it's
unlikely to be much of a stretch to spend an extra hundred on some nice add-on
features. Plus, you can get the Kindle client for Android already, so you won't
be giving up the e-reader capabilities.
course, that's assuming that Samsung can hold the lid on prices. If the Galaxy
7.0 Plus is launched competing with the iPad in terms of price, then it's going
to get the typical lackluster reception we have come to expect for other
expensive tablets that don't carry an Apple logo.
that Amazon has already sold more than 100,000 preordered Kindle Fires, it's
clear that the market is ready for an inexpensive tablet of some sort. It's
also clear that Samsung can make a tablet that's reasonably priced. The
question is, will it?
Samsung can release the Galaxy Tab 7.0 Plus at street prices in the $250 to
$350 range, they'll probably sell like iced watermelon in August. More than
that, and the sales levels will drop steeply. But I don't think that will
happen. Samsung has a pretty good track record of figuring out how low it needs
to sell a device to make money, and chances are good that it'll do that with
the Galaxy Tab 7.0 Plus as well.
and by extension the other makers of 7-inch tablets, has choices to make.
Amazon has clearly staked out the price point for a low-to-midrange 7-inch
tablet. There is room for tablets on the high end, which could include Samsung.
But where does the high end become too high? Probably when it starts bumping
into the pricing of the iPad. I suspect that many people would object to paying
$450 for a 7-inch tablet, no matter how good, if for 50 extra bucks they can
buy an iPad.
Apple does what I think it might do and continue to sell the iPad 2 at a lower
price once the iPad 3 is introduced, then the pressure on the 7-inch tablet market
really increases. Basically, there would be a $100 range between the bottom and
top of the market before you start getting into the iPad territory.
Samsung has an option of trying to price for the high end and maybe doing OK in
terms of sales, or pricing the new Galaxy 7.0 Plus aggressively so that it's
not much more expensive than the Fire and really taking a huge bite out of the
7-inch tablet market share. In the process, Samsung could go a long way in
helping Amazon define the 7-inch tablet as a preferred platform and opening up
the market even more than Amazon already is.