Kindle Fire Android
December 6, 2011 by staff
Kindle Fire is the only tablet in the market to mount a credible challenge to Apple’s iPad, but it has had to do so by selling at cost, Evercore Partnersanlyst Robert Cihra wrote in an investment note reported by CNNMoney.
As noteworthy as that challenge is, it still won’t make much of a dent in Apple’s market lead, he said. Moreover, he asserted, it could make that lead starker by driving from the market Android tablet players who can’t compete with Amazon’s “razor blade” strategy. That strategy, hatched by King Gillette at the beginning of the 20th century, was to sell his hardware — the safety razor — at or below cost so he could land long-term customers for his content — razor blades.
While Kindle Fire could capture 50 percent of the Android tablet market next year, selling tablets isn’t the issue for Amazon, according to Stephen Baker, ananlyst with the NPD Group, a market research company.
“They’re selling lots of tablets at $199, but they’re not making any money at $199,” Baker told PCWorld. “Their goal is to create a long-term value proposition in terms of selling music and movies. What matters to them is creating that ecosystem around their content services.”
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