A Barclay’s analyst comments recapping his meeting with Apple CEO Tim Cook is garnering some attention for its insights into how Steve Jobs’ successor views the competitive landscape.
Specifically, Barclays analyst Ben Reitzes wrote after his meeting with Cook and Apple CFO Peter Oppenheimer that the Amazon Kindle Fire’s $199 price “looks disruptive” but could also “fuel further fragmentation in the Android market given it represents yet another platform,” said a report on Reitzes’ comments in Business Insider.
“The more fragmentation, the better, says Apple, since that could drive more consumers to the stable Apple platform.”
Reitzes adds that he think Apple will eventually get more aggressive on pricing the iPad, but not compromise the product quality and experience.
Analyst Jack Gold said the issue of Android fragmentation isn’t anything new as a number of tablet vendors have tweaked the open source software to differentiate their products. But Kindle Fire is distinctly different because Amazon has done a lot more than competitors to create its own custom browser and software on top of Android.
“Like Apple, Amazon has created it’s own ecosystem, a kind of electronic glass into its own world of books, streaming media and music just as the iPad is a window into iTunes,” said Gold. “Google wants the same thing, but it isn’t there yet.”
Gold, principal analyst with J. Gold Associates, said unless the Kindle Fire proves to be buggy in some way, he expects it to be an instant hit that take sales away from Android competitors as well as iPad.
“It’s a question of what some people are willing to pay,” said Gold. “There are a lot of people who weren’t going to buy an iPad at $500 or $600 who will more readily plunk down $200 for a Fire. I think it’s going to force Apple to bring out a lower priced product sooner than they want to.”
Gold said he’s still getting plenty of “strongly worded” criticism from iPad fans for comments he made in a September report predicting that Android tablets will become the market share leader in 2-3 years just as Android phones have overtaken the iPhone in smartphone market share.
Of course, Android tablets in aggregate represents scores of vendors and all manner of different tablet form factors versus the iPad alone.