Amazon Kindle Fire First Tablet to Challenge Apple iPad?

Amazon's Kindle Fire might be the first "tablet" to get serious traction, other than Apple's iPad. In fact, Evercore Partners' analyst Robert Cihra now estimates the Kindle Fire will represent half of all Android tablet sales in 2012.

Shipments of Android-based tablets are expected to jump from 19 million to 20 million units in 2011 to 44 million to 45 million units in 2012, Digitimes says. 


Some might quibble, arguing that the Kindle Fire is an e-reader, not a tablet. But you might remember Apple CEO Steve Jobs insisting 10 inch screens were a minimum requirement for tablets. Amazon will own 50% of Android tablet market in 2012


IHS iSuppli said Friday that the Kindle Fire is expected to take second place in the global media tablet business in the fourth quarter, behind Apple's iPad. 

Amazon will ship 3.9 million Kindle Fire tablets during the last three months of 2011, according to a preliminary projection from iSuppli.Amazon Kindle Fire sales

Enterprises Probably Have to Support Macs

Forrester Research analyst David Johnson says "it's time to repeal prohibition and take decisive action" and support Mac PCs in enterprises. Forrester says enterprises have t support Macs

"Mac users are your HEROes and you should enable them not hinder them," he says. Forrester uses the acronym HERO for Highly Empowered and Resourceful Operatives, what it finds are "the 17 percent of information workers who use new technologies and find innovative ways to be more productive and serve customers more effectively."

One might say that enterprises lost the battle decisively with the advent of the iPad, which is a tool enterprise workers are demanding and using in growing numbers.


The iPad once viewed as simply a consumer device for media consumption is gaining traction at the enterprise level. Some of the largest companies in the world already use or plan to use the device as an enterprise tool. The rate of enterprise adoption in Fortune 100 companies is reported to be 65 percent according the Wall Street Journal and 80 percent according to Network World. High enterprise iPad adoption

The iPad Is Cannibalizing Macs, PCs, Smart Phones

Apple CEO Tim Cook says Apple is seeing iPad sales cannibalize Mac sales to some degree. Of course, he also argues tablets are cannibalizing PC sales, which most people intuitively might guess is happening. To the extent that consumers have to choose between spending money on a new smart phone or a tablet, one would guess there is some shift of spending towards tablets as well.

It isn't that the tablet displaces a smart phone in terms of function, but only that tablets are the new "hot" consumer gadget, compared to smart phones.

“Yes, we’re seeing cannibalization," Cook says. "Some people are electing to buy an iPad rather than a Mac."

"However, I think a larger percentage are choosing iPad over a Windows-based PC," he says.

iPad Is Eating Mac Sales

Bearish View of The Smart Phone Business

Here's a bearish view about the smart phone business. Microsoft and Apple are extracting royalty payments from Google Android suppliers, squeezing their margins.

Apple missed targets for iPhone sales and sales of Research In Motion’s BlackBerry have "collapsed," not to mention the recent multi-day global outage.

Analysts may argue that the rise of products like powerful tablets have hurt smart phone sales. Some of us think that is partly true. Tablet sales have grown much faster than did sales of Apple iPhones or iPods.

So attention now has been diverted to tablets, to some extent. But Mary Meeker, Kleiner Perkins Caufield Byers partner doesn't appear to share the pessimism.

But lower-cost smart phones now are about to pour onto the market, and the high penetration of mobiles means there still is a huge replacement market.

The Smartphone Business Loses Its Luster

Is Apple Working on 7.85-inch iPads?

Apple is currently testing 7.85-inch iPad displays from Taiwanese panel maker AU Optronics, according to The Economic Daily News. That is interesting because it would contradict earlier and emphatic statements from Apple that 10-inch screens were the "minimum" for a tablet device. 


But Amazon's Kindle Fire and Samsung's Galaxy Tab might have Apple "thinking differently" about smaller-screen devices.

The Economic Daily News predicts that Apple will launch a 7.85-inch iPad early in 2012.


Former Apple CEO Steve Jobs said in 2010 that screens smaller than 10 inches were too small to support great tablet apps.


Is Apple testing 7.85-inch iPad displays?

Amazon's New Kindle Fire Claims a Clear Niche

“Why should somebody buy this instead of an iPad?”


Up to this point, even the answer "it's cheaper" hasn't been possible, since most other devices actually cost as much, or more, than an iPad.


Amazon's Kindle is the first device that answers the question, and it is not about "speeds and feeds."


 Both the iPad and the new Kindle Fire are gateways to a rich content ecosystem.

That’s the difference that other tablet makers missed. Motorola, Samsung and Research in Motion have essentially been chasing the iPad on specs, building the best tablet they can manage at the same starting price of around $500. Watch Jeff Bezos introduce the Kindle Fire

The Kindle Fire is the first device with a good answer. It is much cheaper than an iPad and offers a digital content ecosystem that rivals Apple’s (fewer apps, but more books).

Also, Amazon built an alternative to the iPad, rather than a direct competitor. That's why some might say the Kindle Fire is something different. It is sort of an iPod "touch" content consumption device with a more-usable screen, that is optimized for multiple content types, including reading books and magazines, video and audio, plus web browsing.

Amazon's Kindle does not compete with iPad

There is an iPad Market, "Tablet Market" Has to be Created

So far, one might argue there is not an actual "tablet" market, but only an "iPad" market.

RBC Capital's Mike Abramsky sponsored a survey conducted by ChangeWave that found 85 percent of all tablet buyers plan to buy the iPad.

That doesn't mean an actual "tablet market" will fail to develop, just that it hasn't really emerged, so far. That isn't the case in the smart phone market, where Apple is a major contestant, but not the only significant competitor in a broader "smartphone market."

RBC Capital's Mike Abramsky has raised his fourth quarter iPhone and iPad estimates based on the results of a survey of 2,200 potential buyers. The survey, conducted in August by ChangeWave research, showed what Abramsky called "unprecedented iPhone 5 demand and strong back-to-school iPad buying intentions."

Abramsky says 31 percent of those surveyed said they were "very or somewhat likely" to buy the iPhone 5, significantly exceeding pre-launch iPhone 4 demand (25 percent).

With the iPhone 4 nearly 15 months old, 66 percent of existing iPhone users are very likely or somewhat likely to buy the iPhone 5.

About 54 percent of surveyed Sprint subscribers and 53 percent of surveyed T-Mobile subscribers say they are "significantly likely" or "somewhat more likely" to buy the iPhone, if available.

'Unprecedented' demand for Apple's iPhone 5

Over the Air Updates: Ecosystem Implications

Just about everything in the mobile ecosystem seems to have business model implications. Consider the way mobile devices get updated.

Apple has used the iTunes to push updates to its iOS mobile devices. When a new software update is available, users have to tether to a PC to load the update onto their mobiles.

When an update to Google’s Android operating system or HP/Palm’s webOS is released, users are provided an update notification and can update the software right on their phone.

You might argue that the "tether to PC" model was forced by the relatively primitive nature of the iPod, which established the practice. On the other hand, lots of people have noticed the curiosity of the need to connect an iPad to a PC to configure the tablet.

Oddly, Apple has been saying the iPad "is not a PC." Requiring a PC to activate every tablet might illustrate that in a sort of negtive way: the tablet update strategy isn't smart enough to allow a natively mobile device to update over the air.

But Apple appears to be readying over-the-air iOS updates, starting in the fall of 2011, for updates to iOS 5 devices.

The business model implications of the over-the-air updating are that it appears Apple has to come to agreement Verizon Wireless and AT&T about how to support the wireless updates.

That points out the subtle, but real gatekeeper functions mobile service providers continue to possess in the mobile ecosystem.

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Apple iPad Is Transforming Retail

About 41 percent of consumers who planned or were considering buying an iPad cited shopping as a primary reason for their interest, says eMarketer.

The iPad’s most dramatic impact for retailers might be its use in stores. Merchants are beginning to equip sales associates with iPads to aid customers with in-store purchasing decisions. Deloitte forecasts that in 2011, 25 percent of all tablets will be bought for business, and retailers will lead all industries in their adoption.

How the iPad Is Transforming Retail - eMarketer

iPad's Great, But How Good is It as a Blender?

Steve Jobs Hid iPad From Google

Steven Levy’s book “In the Plex” apparently reveals that Steve Jobs hid development of the iPad from Eric Schmidt while Schmidt was still on Apple’s board of directors.

Jobs reportedly didn’t like how Google’s OS was starting to match up blow for blow to iOS and didn’t want the same to happen with tablets. Jobs was angry because he felt that Android was ripping off the key features of the iPhone.

Read more here

Android Tablets Start to Take Market Share

No surprise here: as Android tablets appear in the market, Apple is going to lose some market share.

Do Tablets Affect When We Read?

Tablets might change how some people read, what they read, how much they read or what else they give up to read. Tablets might also change when people read. After analyzing about one million articles saved for later reading by Read It Later, the company suggests that tablets already are shifting the consumption of content, at least on the part of tablet owners.

The data suggests that iPad owners, for example, shift much of their reading away from PCs during work hours and towards "personal prime time" in the evenings.

Looking at the number of articles read each hour by Read It Later users on their computers, a significant amount of content was shifted towards the end of a user’s day (6PM – 9PM).

When a reader is given a choice about how to consume their content, a major shift in behavior occurs. They no longer consume the majority of their content during the day, on their computer. Instead they shift that content to prime time and onto a device better suited for consumption.

That reinforces the notion that iPads and tablets might wind up being used extensively "on the couch" and in the home, rather than as a replacement for a PC on business trips. One also wonders what happens to TV viewing, as reading is relatively more-immersive activity than much music listening, which happens when users are doing something else.

Is Mobile Affecting When We Read?

Verizon Gets Apple iPhone, Now the Questions Begin

How many AT&T customers using iPhones will depart for Verizon, and at what rate? How many current Verizon Wireless customers will switch to iPhone, and what will the retention impact be? Will Verizon Wireless get the right to sell the iPad, with native 3G connections?

Will Verizon Wireless get the right to sell a 4G version of the iPhone, and when? Same question for the iPad on the 4G network.

http://www.verizonwireless.com/b2c/splash/iphone.jsp

Amazon Kindle, Apple iPad Lead Reader Race

The e-Reader market has essentially become a two horse race between the Amazon Kindle and the Apple iPad, according to ChangeWave’s latest survey of more than 2,800 consumers.

The Amazon Kindle (47%; down 15-pts) is hanging on to a rapidly diminishing lead over the Apple iPad (32%; up 16-pts) among current e-Reader owners. However, the iPad’s share of the overall market has doubled since the last time ChangeWave surveyed e-Reader owners in August.

ChangeWave Survey - Amazon Kindle vs. Apple iPad

Enterprises Adopting iPads

About seven percent of corporate respondents surveyed by ChangeWave now say their company provides employees with Tablet devices, up about one percentage point since ChangeWave's previous survey in August.

The Apple iPad (82 percent) remains by far the most popular tablet for business purposes. H-P has 11 percent share and Dell has seven percent share.

As with other Apple products, the iPad’s satisfaction ratings are outstanding, with 69 percent of corporate users saying their company is very satisfied and another 28 percent somewhat satisfied with the Apple device.

The larger point is that tablet devices, lead by the iPad are finding a home in enterprises very quickly. The ChangeWave survey also suggests that enterprise adoption could double, to 14 percent, over the next quarter.

About 73 percent of respondents say the iPads are used for Internet access, while 69 percent report they are used for checking email. About 67 percent report that iPads get used for work away from the office.

Sales support is an application used by 46 percent of respondents, while 45 percent use iPads for customer presentations. In about 38 percent of respondents say iPads are used for laptop replacement.

ChangeWave survey - apple ipad tablet demand | InvestorPlace

Sprint Benefits from iPad

Sprint doesn't sell the iPad, nor does it have the right to sell 3G connections for iPads. Nevertheless, Sprint says it is benefitting from demand for Apple’s device. The reason is that most iPads seem to be of the Wi-Fi-only variety, and that means a wireless hotspot service adds value.

Dan Hesse, Sprint Nextel chief executive officer says Sprint Nextel has seen an uptick in demand for its "Overdrive MiFi" wireless-hotspot device, as people use it to connect their iPads to the Internet when on the go.

Sprint CEO: The iPad Has Been Good to Us

Tough Christmas Selling Season for Consumer Electronics is Forecast

The 2010 Christmas selling season for consumer electronics isn't looking so good, says Stephen Baker, NPD Group VP, at least from the retailer and manufacturer standpoint. Pricing levels continue to flatten, so average selling prices are flat.

Consumers have come to expect 20 percent to 25 percent price declines every year, so small movements of five percent or less are unlikely to inspire them to rush into the stores and buy.

The other issue is that consumers are in the midst of technology "refresh" cycles. Just half of all flat-panel TV purchases are now made by first-time buyers. And more than 80 percent of the notebook installed base was less than three years old at the time of NPD’s Household Penetration survey earlier in 2010.

With the possible exception of Apple's iPad and other new tablets, there does not seem to be some compelling new application or device to prompt a big upsurge in buying, Baker suggests.

Also, the 2010 Christmas selling season will face tough comparisons with the 2009 holiday season. In 2009, categories such as flat-panel TVs saw 25 percent sales increases, and notebooks were up twice that amount. It always is tougher to show current period growth when the comparison is to an earlier period with robust sales growth.

The exception will be the iPad and tablets, in all likelihood.

NPD’s research also indicates worsening consumer sentiment. "Consumers who were considering just cutting back on  purchases are now not planning to buy anything at all," says Baker.

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Steve Job Anti-Android Rant

More Granular Mobile Data Plans from Verizon Wireless

Verizon's new mobile broadband plans for the Apple iPad seem crafted for usage somewhere between smartphones and PCs.

Smartphone owners typically are expected to consume hundreds of kilobytes a month.

Users of mobile broadband for their notebooks or netbooks might consume a couple gigabytes a month.

Tablets that might be used heavily for content consumption could in some cases represent heavier demand that that, but not as much as many PCs on fixed connections. More granular pricing will be helpful, even though users might be expected to worry that they do not know enough right now to pick the best plan.

Carriers can help by providing better usage tools, communicating with customers and by being more flexible about allowing end users to shift plans when their usage behaviors change.

Users have gotten pretty comfortable with "buckets of usage," and mobile broadband buckets ultimately should be as acceptable as voice buckets have been.