Home Technology Amazon’s Kindle Fire Appeals To Both Low & High End Segment: BCS

Amazon’s Kindle Fire Appeals To Both Low & High End Segment: BCS

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Barclay Plc (LON:ARC) (NYSE:BCS)’s believes that the new Kindle Fire tablet launched by Amazon.com, Inc. (NASDAQ:AMZN) will help the company gain market share over the competitors in the core eReader and low-end tablet markets. Additionally, the impressive new hardware and software upgrades the new Kindle will also pose a grave threat to the popular iPad from Apple.

Amazon’s Kindle Fire Appeals To Both Low & High End Segment: BCS

The report from Barclays estimates that for the year 2012, Amazon will sell about 14.3 million tablets, which is an upward revision from an earlier Barclays report on the Kindle. For 2013 Amazon.com, Inc. (NASDAQ:AMZN) is expected to sell 21.9 million tablets, again an upward revision from 18 million tablets earlier. Along with the increase in the number of devices, the new tablet line is available in various price ranges, which will help boost the popularity of devices from the online retailer, across various demographic segments. Backed by these factors and also due to the availability of Kindle Fire in Europe, Barclays has kept its Kindle eReader estimates unchanged at 12.5 million units in 2012 and 14.6 Million units in 2013.

The unchanged numbers from Barclays clearly highlights the fact that Amazon will not only expand its market share in the low end tablet market but also with its high-end 8.9’ form factor Kindle Fire HD models. The company could gain some market share in the premium segment also, which will boost its Electronics & other general Merchandise revenue. Apart from the various tablets, the significant hardware upgrade and even more attractive software upgrade, will surely make the new offering from the company popular among the users and “should drive incremental digital media attach rates (and Media revenue) as well.”

Despite lukewarm reviews of the initial Kindle Fire, the company was able to sell out after the launch.  According to the estimates from Barclays, Amazon sold around 7 million devices between the fourth quarter of 2011 and second quarter of 2012, and has captured around 22 percent of the US tablet market and about 5 percent of the global market. The Barclays report is optimistic about the sales of the Amazon.com, Inc. (NASDAQ:AMZN) tablets, but at the same time expects that the devices could face competition from new devices like Google ‘sNexus 7 Tablet and the anticipated iPad Mini. Even with such competition, Amazon’s huge and loyal user base backed by “aggressive enough pricing, made enough substantial hardware and software upgrades, and will see enough incremental unit sales uplift from availability in Europe”, which will help the company overcome the threat from the rivals.

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Aman Jain
Personal Finance Writer

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