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Amazon sets a new record in low-priced tablet

Posted: 14 Sep 2012     Print Version  Bookmark and Share

Keywords:Tablet computers  Kindle Fire  Nexus 7  HD 

Following the attractively priced Kindle Fire at Rs.11,055.56 ($199) last year, Amazon is planning to offer a more budget friendly version, called Kindle Fire SD, at an even lower price of Rs.8,833.33 ($159).

According to WitsView, the display research division of TrendForce, this price is 20 per cent lower than its peers and sets a new record in the low-priced tablet market.

Eric Chiou, WitsView research director, said that apart from the tablets, Amazon launched several other models at very low prices simultaneously. Although Kindle Fire SD's 1024x600 resolution is fairly common, it is leading the way in the tablet market with a competitive price of Rs.8,833.33 ($159). That is appealing to price-oriented buyers and consumers who hesitate to purchase tablets due to high prices.

As for the Kindle Fire HD, it has been compared to Google's Nexus 7. Both tablets use WXGA (1280x800) and direct bonding, which has less reflection and better transparency. Cost-wise, Kindle Fire HD applied the traditional GG structure for the touch module, with at least a higher cost of Rs.166.67- Rs.222.22 ($3-$4) compared to Nexus 7's one glass solution (OGS). The 16G of storage is twice as large as the Nexus 7.

Amazon bit the bullet and kept the price of the Kindle Fire at Rs.11,055.56 ($199), to regain the market share lost due to the release of Nexus 7. The competitive price confirms Amazon's conviction to keep their position in both low-priced and mainstream segments of the tablet market, especially as the iPad mini is expected to come out in the 4th quarter.

Based on WitsView's observations, it is common for operating system developers such as Google and content providers like Amazon to lower tablet prices with subsidies. Tablet brands which only make profit on hardware have lost their competitive edge in the market. Once the same pattern is duplicated to 10.1 and 10.6inch markets, it does not make much room for hardware manufacturers to survive.

The 8.9inch Kindle Fire HD features full HD (1920x1200), which is not the mainstream choice. Chiou said that the basic models of 10.1 and 9.7inches have been priced below Rs.22,222.22 ($400) and the price could further drop to approximately Rs.19,444.44 ($350) due to promotions in the 4th quarter.

Although Kindle Fire HD is equipped with one of the highest resolutions, the active area is only 77 per cent of 10.1inches. The relatively small price gap of Rs.2,777.78 ($50) shows less popularity than 7inch tablets. The sale performance is estimated to be suppressed by mainstream products such as 10.1 and 9.7inch tablets.

According to WitsView, although Amazon Kindle Fire showed weak sales during the first 3 quarters of this year amid the absence of new models, this year's Amazon tablet shipments are projected to reach 70 lakh to 75 lakh with the showcase of the Kindle Fire HD. Tablet prices will become more and more consumer-friendly, as shipments are projected to grow 37 per cent y-o-y in 2013 and climb above 13 crore units, if tablets continue to be affordable.

For more statistics and forecasts, click here.





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