Kindle Fire Tablet Rides Holiday Momentum Into 2012

 
 
By Clint Boulton  |  Posted 2012-02-04
 
 
 

Amazon (NASDAQ:AMZN) may have missed its analyst estimates for the fourth quarter, but the company's Kindle Fire tablet remains a hot ticket item.

Some 6 percent of 2,607 North American consumers surveyed in January claimed to own a Kindle Fire, double the percentage of a month ago, according to ChangeWave Research.  

Moreover, consumers appear to be pleased with the 7-inch, custom Android tablet, which Amazon began selling Nov. 15 for $199. Of 254 new Kindle Fire owners polled, 54 percent said they were "very satisfied" with the slate, compared with 38 percent who owned up to being "somewhat satisfied."

Apple's (NASDAQ:AAPL) standard-setting iPad secured a 74 percent approval rating from consumers ChangeWave surveyed in November. However, Strategy Analytics revealed that the Kindle Fire helped power market share for Android tablets to 39 percent market share for Q4, up from 29 percent a year ago.

What do Kindle Fire owners appreciate about the tablet? Some 59 percent of Kindle Fire owners said they appreciated the cost of the device above all else, followed by the color screen (31 percent) and ease of use (27 percent). The biggest knocks on the device include the lack of volume controls, camera and short battery life.

Yet the Fire also shows "tremendous potential" for bringing Amazon additional revenue. ChangeWave said roughly three in ten consumers who own Kindle Fires say they'll spend more money at Amazon over the next three months, compared with 19 percent of non-owners.

That confirms industry experts' expectations that the Fire provides a significant on-ramp for Amazon's digital content and services, such as electronic books, streaming movies and TV shows, and applications. RBC Capital analyst Ross Sandler said Amazon may be making roughly $136 in content over the life of its device.

The research came after Amazon reported sales of $17.43 billion for Q4. While that figure was up 35 percent from a year ago, it was $1 billion or so less than Wall Street expected.

Consumer confidence in the e-commerce company remains high. Amazon continues to outperform all of the other major online retailers in terms of where online shoppers will spend their money over the next 90 days, according to ChangeWave.

Meanwhile, some expect that while Amazon will continue expanding its digital good provisions, including a paid subscription video service to rival Netflix, others suspect the company could launch retail stores.

These wouldn't be typical retail stores. Mahalo Founder Jason Calacanis said Amazon could offer a giant showroom with display units of appliances and other goods to circumvent paying sales taxes.

"There wouldn't have to be any inventory; you would simply play with the stuff, talk to a professional and swipe your Amazon Prime credit card [or Amazon phone] and have it at your house in the next 24 to 48 hours," Calacanis said in December.

 

 


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