Amazon's new tablet lineup, ranging from a $159 repriced Kindle Fire to the all-new $499 Kindle Fire 8.9-in. HD 4G, pose little threat to Apple's tablet dominance, several analysts said. See also: iPad Mini price in UK.
On Thursday, Amazon CEO Jeff Bezos unveiled several new tablets and a refresh of its one-year-old Kindle Fire, at prices that ranged from $159 to $499. The latter is the entry price of Apple's iPad line.
Bezos took on Apple during his time on stage, comparing Amazon's business model with the Cupertino, Calif., company's approach. "We want to make money when people use our devices, not when they buy our devices," Bezos said.
He also directly pitted the $499 Kindle Fire 8.9-in. HD 4G against the iPad, claiming that with the Kindle Fire's $49.99 annual data package, consumers will see "more than $400 in year-one savings" compared to a similarly equipped 32GB iPad and a comparable data plan.
While some experts and online pundits immediately said Amazon just became Apple's No. 1 rival, other analysts disagreed.
"While there were some interesting new features and upgrades from the original version that could provide increased competition for non-Apple tablets, we walked away from this announcement with even greater confidence that the iPad will continue to dominate the tablet market at the mid-to-high end," said Brian White of Topeka Capital Markets, in a note to clients.
"The 4G version ... will have a difficult time gaining traction, while the November 20 dates are much too far into the future," White added.
Brian Marshall of the ISI Group -- like White, one of many analysts who have Apple stock as a "Buy" recommendation -- was just as certain that Apple had little to worry about.
"While Amazon's new products look impressive, we believe Apple remains the dominant vendor/platform of choice for smartphones/tablets," said Marshall in his note to clients.
Their reasons centered around several factors, including Apple's App Store, which offers hundreds of thousands more apps than does Amazon's, Apple's iCloud storage and synchronization service, and the expected launch of a small iPad, dubbed the "iPad Mini," perhaps as early as next month.
The last of those three -- the iPad Mini -- is Apple's ace, White and Marshall said.
"We believe the soon-to-be-launched 'iPad Mini' at a $250-$300 price point, possibly a bit lower, will expand [Apple's] addressable market opportunity significantly with a 7.85-in. tablet and potentially eventually surpassing sales of the regular-sized iPad," White said.
Bezos said Amazon would also offer a Kindle Fire HD -- sporting a 1,280 by 800-pixel display -- for $199 starting Sept. 14, and a Wi-Fi version of the Fire 8.9-in. HD for $299 in late November. Both prices would be in the iPad Mini's ballpark if the analysts are correct.
Patrick Moorhead, principal analyst at Moor Insights & Strategy, writing in Forbes, also pitched in on the Kindle vs. iPad tussle.
Arguing that Amazon's move was "by no means [a] victory," Moorhead cited several advantages Apple held, including the yet-to-be-confirmed iPad Mini. "The sheer fact that Apple will launch a tablet at that low price will bring in consumers in swarms," he wrote. "Yes, consumers will be able to get the Kindle Fire HD 8.9-in. tablet with 1,920 by 1,200-pixel resolution for $299, but they're also not getting the Apple brand and experience."
The three analysts concluded that Amazon, even with impressive hardware, aggressive pricing, and a content ecosystem in the best position to take on Apple, ultimately won't be able to unseat the iPad. According to IDC, the iPad accounted for 68% of all tablet sales in the quarter that ended June 30, up nearly seven percentage points from the year's first quarter.
"This announcement will do little to halt the momentum of Apple's iPad franchise that continues to gain momentum around the world," White predicted.
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is [email protected].
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