How long will Amazon take to build on the success of its Kindle Fire tablet released last November? Not very long at all if a new report out is accurate.
Digitimes, the Taiwan-based site that tracks what component suppliers in the computer and device supply chain are up to, says its sources expect Amazon to introduce two new tablets this year. One, like the Kindle Fire, will be a 7-inch model, while the other will sport a 10-inch display. Both are expected out in the second half of this year.
While the online retail hasn’t been specific on how many Kindle Fire tablets it’s sold, it has said it sold millions of Kindles over the last fall holiday season, including both Kindle ebook readers and the Kindle Fire. Digitimes says Amazon shipped 3.98 million Kindle Fires in Q4, 2011, enough to vault the upstart tablet into second place, with a 14% market share, well behind Apple’s market leading iPad.
The move to expand the Kindle Fire line (or whatever the new tablets are called), suggests Amazon may shift it’s focus away from Kindle ereaders, though they’re likely to remain a low end staple of Amazon’s product line for some time.
Michael Mace, CEO of stealth startup Cera and author of the MobileOpportunity blog, says he expects Amazon to offer new models but would be “shocked” if it tried to compete with a model that matched the price of the iPad.
Such a scenario is particularly unlikely since Apple relies on high margins while Amazon is believed to sell the current Kindle Fire at a slight loss. Even if its unprofitable directly, the Kindle Fire is partly designed to help consumers buy more products at Amazon.com
Presumably, a 10-inch Kindle Fire would be priced even less than the recently discounted iPad 2, which now sells for $399.
“I believe the magic sale price for tablets is $199 or $299,” says Mace.
Digitimes was not the first to report the liklihood of Amazon introducing a new tablets this year. Pacific Crest analyst Chad Bartley said last month that his company is raising its 2012 sales forecasts for the Kindle Fire to 14.9 million from 12.7 million based on what it sees as the liklihood Amazon would introduce a 7- and 9-inch model by midyear. Digitimes claims Amazon has backed away from earlier plans to introduce a 9-inch (actually, 8.9-inch) device in favor of a larger 10-inch model.