(Reuters) – The Kindle Fire tablet may be the hottest selling gadget this holiday, pressuring Amazon.com Inc’s profit margins but giving the world’s largest Internet retailer potentially millions of new high-spending customers.
“The rumored numbers out on the Web are far too low,” said Mark Gerber, an analyst at Detwiler Fenton & Co. “Really strong pre-orders and the surprising $199 price means they will easily do five million units this quarter.”
Peter Rojas, head of gdgt.com and co-founder of gadget websites Gizmodo and Engadget, expects the Kindle Fire to be the hottest holiday product this season, ahead of Roku Internet TV boxes and Canon’s new PowerShot S100 camera.
“A lot of people started to have more than one computer in the home in recent years and cheaper netbooks fulfilled that need perfectly,” Rojas told Reuters. “The Kindle Fire could meet the demand for a second tablet.”
Apple’s iPad created a new segment of the personal computer market and now Amazon has created a new segment of the tablet market, according to Dominic Field, a partner at The Boston Consulting Group and author of a recent report on the tablet market.
“Our research suggests that $199 is the price point that mass market America was looking for in a tablet,” Field said. “This is the point at which it moves from being a very successful phenomenon for early adopters to the mass consumer market.”
Colin Sebastian, an analyst at RW Baird, has published a fourth-quarter sales estimate of three million Fire tablets, but he said five million units are possible if Amazon avoids production, shipping and other bottlenecks.
The Prime service costs $79 a year in the United States and includes free two-day shipping on eligible Amazon purchases. It also gives members free access to instant streaming of more than 12,000 movies and TV shows.
Amazon has over 12 million Prime customers and they buy at least three times more products after they sign up for the service, according to estimates from ChannelAdvisor, a software provider that helps retailers sell online.
The UBS analysts have more conservative sales estimates. But if half of Kindle Fire users sign up for Prime, Amazon could end 2012 with more than 20 million “heavy-spending” Prime subscribers, they said.
- Tablet Throwdown: Amazon Kindle Fire vs. Apple iPad 2
- Amazon’s tablet serious challenge to Apple’s iPad
- Apple iPad vs. Kindle Fire: What Apple’s Tablet Has That Amazon’s Lacks
- Amazon sets press conference, sparks tablet hopes
- Amazon Rumors: ‘Kindle Fire’ Tablet, Purchase Of Hulu Or Netflix And More
There are no comments yet. Why not be the first to speak your mind.