Can the iPad 3 kill the Kindle Fire?

Apple's upcoming new tablet will be a potent weapon that can slow Amazon's newest Kindle.

By Trefis Feb 7, 2012 6:16PM
Image: young woman reading from Kindle (© Reggie Casagrande/Photographer)The tussle between Apple (AAPL) and Amazon (AMZN) in the tablet market is heating up as the Kindle Fire proves a significant threat to the iPad.

Although Amazon's Kindle Fire fell short of the iPad in customer satisfaction in a recent market survey by ChangeWave Research, it scored higher than other non-Apple tablets, such as Research In Motion's (RIMM) PlayBook. Surveyed users said the most attractive feature was its low price of $199 -- less than half that of an entry-level iPad 2.

Apple investors should keep an eye on the Kindle Fire but don't need to worry too much about its impact on the stock price now. Our current $550 price estimate for Apple stocks is about 20% above the market price (see our complete analysis of Apple here).


Amazon could make up for losses

One interesting finding from the ChangeWave survey is that nearly 29% of Kindle Fire owners said they will spend more money on Amazon's platform over the next 90 days, compared with 19% of non-owners. This is good news for Amazon, which sells the Kindle Fire at a loss in hopes it will spur more purchases of books, movies and popular television shows from Amazon's platform.


iPad 3 could change this equation

According to a recent report from DigiTimes, Amazon is cutting orders of the Kindle Fire from suppliers by half to 3 million units in the first quarter. Amazon reportedly expects slower post-holiday sales and the forthcoming launch of the iPad 3 to slow down Kindle Fire sales.


Apple iPad Units Sales

We expect the iPad 3 will be a high-performance iPad with some attractive features, including the Siri voice-recognition service that became a hallmark of the iPhone 4S. The new iPad may also have a high-resolution screen and a faster processor. According to some reports, the iPad 3 may be released as soon as March and may support 4G LTE networks even before the iPhone does (see The next iPad could get 4G LTE before the iPhone).


All these factors make the next iPad a potent weapon for Apple and can impact Kindle Fire sales, which is why Amazon might have decided to cut Kindle Fire orders for this quarter.

93Comments
Feb 8, 2012 1:17PM
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I like the Kindle Fire. I have nothing against Apple products in general, it is just that I cant afford their higher price structure.
they all do the same,,,they just have a different name~

Feb 8, 2012 3:55PM
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Our family was looking at buying IPADS or Kindle Fires for this past Christmas. Everyone in our house already has a laptop and we have a PC that we share hooked to one of our printers. We did the research ahead of time about what we were looking for and why we were considering buying the IPAD and Kindle Fire. Our answer? Entertainment and Accessibility. What did we end up with? Our family bought 4 Kindle Fires, which we all love! It's smaller and more convenient for all of us to take when we travel (our family travels a lot). If we wanted something as large as an IPAD, we would all travel with our laptops. And, if we have to do any heavy duty work requiring office applications we take a laptop. Otherwise, we all love and travel with the Kindle Fire. My Mom was so happy she didn't have to buy 4 IPADS! The Kindle Fire is half the price and just as good, if not better! We'd recommend it to anyone!!

Feb 8, 2012 1:23PM
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The iPad and Kindle Fire do not compete with each other that much. The Kindle Fire costs about 1/3 what the iPad costs. Price sensitive consumers will not buy the iPad.

The iPad will compete more with high end tablets with more comparable features.
Feb 8, 2012 3:07PM
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Used the Ipad 2 and Kindle Fire and from what I can tell I would say an apple fanboy wrote this article... The kindle fire CAN do most everything the ipad can do minus taking videos and it will only get better as more apps are created for it!! The Kindle fire is a great entry if your looking to get a tablet, PLEASE PEOPLE DON'T go out and spend $500+ on an low powered over priced PC (ipad) you don't even know how bad your being ripped off! Spend that $$$ on a laptop you could get a nice one for that much money!
Feb 8, 2012 9:55AM
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This is why I cant bring myself to buy an iPad...they are coming out with iPad 3 already??? If I had purchased the original iPad for $600, it would be obsolete already. Instead of creating a product that can just be upgraded for a nominal fee, they have to keep building new ones that you have to pay full price for if you want the new features.
Feb 8, 2012 4:46PM
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It's a matter of what you want the machine to do.  If you want a laptop substitute, the iPad is great.  If you want to read books, play games, and surf Facebook, the Kindle is really all you need.  I have a Kindle Fire (as well as an older e-ink Kindle) and it's perfect for what I use it for- playing games, killing time, surfing the internet when I'm out of the house.  I wouldn't have wanted to spend the $500-700 on an iPad to play Angry Birds, and I'm glad I had an easy other option.
Feb 8, 2012 3:21PM
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Kindle fire Rules.  Love that little device. Carry it around like a security blanket.
Feb 8, 2012 2:46PM
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Still.....The Kindle Fire is only $200.......how will the iPad compete with that?  They won't.
Feb 8, 2012 1:41PM
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I wish all you kids would quit whining. Stop for a moment and think about what you have and what is out there. It's ALL  good. Be thankful for what is available. We live in an age of quick satisfaction with  little regard for all the work that went into making any electronic product today. Shame on you all.
Feb 8, 2012 4:46PM
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I don't need to bash the iPad to speak in favor of the Kindle Fire. Apple priced a lot of people out of the market for an iPad. To me they aren't really competing products. As an iPhone owner I have a favorable impression of Apple products, they're great. But all of their products are WAY overpriced. That being said, if I was willing and able to pay $500 plus for an iPad PLUS pay monthly for data I would have had one a long time ago, no question. But I can't justify that kind of expense for a "nice to have" product. For $199 plus the wi-fi access that I already have, the Fire is perfect. It's a bit slow, but otherwise I love it.
Feb 8, 2012 7:15AM
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A friend has a Kindle, it does everything she needs, books, email, etc, all for a low price.  I've never understood the Apple thing, much too expensive, much too restrictive, and too much pomp.  I'm waiting for Windows 8 and see what's offered there, the new OS sounds terrific!
Feb 8, 2012 2:52PM
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kindle fire is the best bang for your buck hands down!!!! it is more compact and does everything that the i pads do....
Feb 8, 2012 2:20PM
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I have both an IPAD and a kindle fire. I prefer the kindle fire. I've had no problems with the screen or the apps. The price was right and it can pretty much do everything the IPAD can do from what I've seen.
Feb 8, 2012 4:20PM
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I bought a Kindle Fire on Sunday from Walmart.  Did you know that this week they are $199 PLUS you get a $50 Walmart gift card with the purchase!  $149!  A great deal!  And I like the Kindle Fire, very useful.  Enjoying it a lot.
Feb 8, 2012 2:42PM
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I have Kindle fire  feature of the Fire was its low price of $199 -- less than half that of an entry-level iPad 2.

I am Happy with it It does everything I wanted to do for more then half the price.
Feb 8, 2012 10:24AM
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WOW! Are you kidding? The iPad and the Kindle are not even the same type of device. An iPad is a full blown tablet device, while the Kindle Fire and the Nook Color are Readers. They do not have cameras and the cell phone connections are only in specific models. The Toshiba Thrive tablet and the Asus Tablet and things like that are comparable to the iPad. Please quit comparing apples and oranges.....

Feb 8, 2012 12:42PM
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Mac or PC? Come on, they both got their own negatives and positive. It does seem at times that Apple seem to be more concentrated on the quality part of technology lately, but they both do the same thing. For everything my wife's iphone 4s can do, my droid can too. They both works, and they both have issues. Its the same, just a matter of your own personal preference.
Feb 8, 2012 6:04PM
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You forgot to mention one important aspect of the iPad 3.  THE PRICE!  The masses want a device they can afford.   Kindle Fire is a device that functions very well for a very low price.   The iPad 3 is a consumer product that functions just as well at a very high price.  The iPad 3 is the $2000 Rolex watch  that is very accurate.  The Kindle Fire is the $29 Timex digital watch that is just as accurate. 
Feb 8, 2012 2:58PM
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Discussing these devices is alot like the Ford - Chevy debate. Good, bad or ugly... people like what they like. I've had Macs starting with the Apple IIE and PCs starting with the IBM 5150. As IT Admin for a company, I use or have used just about everthing out there. I live in a PC-based world simply because Mac has NOTHING when it comes to high-end DB/Web/Email servers. I will say that Mac devices are less prone to viruses and such but it is not simply because of superior technology. In the late 90's and 2000's, Microsoft started to dominate and with that domination came hatred towards them. For every one person looking to design a virus/spyware/malware/etc for a Mac, there are 25 people trying to do the same for a PC. And back on subjec (sorry), the comparison on devices in this article is outright idiotic. As many people have mentioned here, comparing the two is like comparing a hamburger patty to a prime piece of sirloin steak. The steak is (almost) always gonna win!
Feb 8, 2012 2:19PM
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I have been a tech lover and user for years way before it was popular and way before windows. I have more electronics then most people. I own 4 laptops 2 computers taht I built and 4 android phones a wii and a PS3. I do not own a tablet. I love a product that does things and does it well. A tablet is not one of those. A laptop cost  half a IPAD. So what do you get for that price. A CPU that is 5 times slower. a screen that is 70% smaller 1/20th the storage. It is a functionally inferior overpriced product. I know people will say it more mobile but you still need to put it in a bag to keep from damaging it on trips. If the thing was $200 or so ok I might buy it. I am not impressed by the wow factor I am a engineer. I have used my laptops sometimes for design work. You can not do that with a ipad no software and no cpu power even if you did. 3d graphics in design works take lots of RAM and CPUrotating several thousand point with lines in 3d design a ipad is not goig to pull off. I was a nerd in college still pretty much am. I perfer tech that does what it's suppose to do instead of trying to impress people I bought a overpriced toy. The Asus memo is coming soon with a quad core chip and is around $250 runs ICS and I might buy one of those. I can link it to my tv screen when home and have a wireless keyboard and mouse and it would have enough horsepower in the CPU to run things I want. The problem will still be trying to find design software, but since android is linus there is something that might work on it.
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