iSuppli estimates Kindle Fire shipments at 3.9 million

[Mopetar]

iSuppli has released estimates that place the Kindle Fire shipments for this quarter at 3.9 million.

Although this is just an estimate, and there's the usual shipped vs. sold debate, I think that in this case Amazon's sell through is probably close to whatever they've managed to ship given that the product is new and that the price is so low compared to most other tablets.

It will be interesting to watch the Fire and how it continues to sell over time. Amazon has been fairly aggressive with the price of the Kindle in the past so it's conceivable that they may try to get the starting price of the Fire even lower.

 

[pm]

It will be interesting. I'm curious to see what the next iteration of the Kindle Fire looks like. I've always been more of a fan of the ~10" tablet than the smaller sizes. If I want a portable tablet, I'll use my smartphone. So I'll be curious to see what Amazon comes up with that will be closer to what I personally would think about buying.

 

[Bateluer]

It will be interesting. I'm curious to see what the next iteration of the Kindle Fire looks like. I've always been more of a fan of the ~10" tablet than the smaller sizes. If I want a portable tablet, I'll use my smartphone. So I'll be curious to see what Amazon comes up with that will be closer to what I personally would think about buying.

Rumors suggest it'll be Tegra based. If it follows the current Fire, Amazon will also strip out things like cameras, SD card slots, microphones, etc. Not necessarily a bad thing, keeps costs down.

 

[BladeVenom]

It will be interesting. I'm curious to see what the next iteration of the Kindle Fire looks like. I've always been more of a fan of the ~10" tablet than the smaller sizes.

A 10" tablet would be the next logical step for Amazon.

 

[Pliablemoose]

I dunno, depends on how much money Amazon wants to burn through.

 

[DaveSimmons]

> I dunno, depends on how much money Amazon wants to burn through. ( Online activity )

But the Fire doesn't have 3G so they aren't paying for that, just for their cloud services. And getting people hooked on their streaming music and video may well translate into more sales of music and video.

 

[Pliablemoose]

> I dunno, depends on how much money Amazon wants to burn through. ( Online activity )

But the Fire doesn't have 3G so they aren't paying for that, just for their cloud services. And getting people hooked on their streaming music and video may well translate into more sales of music and video.

So it's almost like Kindle Fires were subsidized in a slightly different manner than phones? And the company would make up the cost in sales of goods and services?

Wow, that's a flipping genius move by Bezos.

 

[goog40]

I'm curious how profitable digital music and video sales are for Amazon. From what I understand, Apple doesn't really make much from iTunes after paying the content owners and their own operational costs. And the cost for digital movie rights is going up.

Apple is still breaking even on the iTunes Store - and the App Store for that matter - according to recent disclosures by Apple CFO Peter Oppenheimer. "Regarding the App Store and the iTunes Store, we're running those a bit over break-even, and that hasn't changed," Oppenheimer stated during a recent quarterly financial call. The break-even status remains despite paid download volumes approaching 2.5 billion songs annually.

That was from January 2010.

 

[theeedude]

> I dunno, depends on how much money Amazon wants to burn through. ( Online activity )

But the Fire doesn't have 3G so they aren't paying for that, just for their cloud services. And getting people hooked on their streaming music and video may well translate into more sales of music and video.

I think they screwed the pooch by not having HDMI out on the Fire, so users can't watch their Amazon content on TV. Maybe it was a requirement by the content providers.

 

[Pliablemoose]

I think I'll hold out for a returned unit...

http://tech.fortune.cnn.com/2011/12/03/how-many-kindle-fires-are-being-returned-to-amazon/

 

[manly]

So it's almost like Kindle Fires were subsidized in a slightly different manner than phones? And the company would make up the cost in sales of goods and services?

Wow, that's a flipping genius move by Bezos.

I feel the word genius is bandied about too frequently. 😉

Amazon's cloud business is the only "logical" reason they're sporting a 90 P/E ratio. They've already made a massive investment, so using some of the excess capacity to support Kindle Fire is hardly material to their bottom-line. I love Amazon, the company, but the 2000-style stock valuation is not going to hold up.

I think I'll hold out for a returned unit...

http://tech.fortune.cnn.com/2011/12/03/how-many-kindle-fires-are-being-returned-to-amazon/

I like the Apple 2.0 blog, but guessing a 10% return rate is pretty questionable analysis.

 

[DaveSimmons]

I think they screwed the pooch by not having HDMI out on the Fire, so users can't watch their Amazon content on TV. Maybe it was a requirement by the content providers.

Newer TV sets, blu-ray players and media streamers like Roku already support Amazon video streaming, so Amazon said they prefer to have customers use those for TV set viewing.

So it's almost like Kindle Fires were subsidized in a slightly different manner than phones? And the company would make up the cost in sales of goods and services?

Music, movies, apps, Kindle books. Also, they lose money on the free Prime instant videos but sell you paid ones later and get you to buy more physical goods from them to use the 2-day shipping.

Apple can only sell you music, video and apps while Amazon can also get you to buy a vacuum cleaner and a winter coat.

 

[Pliablemoose]

Music, movies, apps, Kindle books. Also, they lose money on the free Prime instant videos but sell you paid ones later and get you to buy more physical goods from them to use the 2-day shipping.

Apple can only sell you music, video and apps while Amazon can also get you to buy a vacuum cleaner and a winter coat.

Wow, that's amazing stuff, I'll bet they sell like hotcakes.

I have to admit I'm a little biased, though. I've scored a couple of discounted Android tablets, a $99 HP Touchpad, a discounted PlayBook for <$200 and have a couple of iPads, I like my tablets to have a few more features, and I have to admit, I'm a bit of a fan of how Apple does stuff too.

Account: xxxx-xxxx Your Day buy order for 875 AAPL at market price was executed at $380.1278. See order # 470 for details.

 

[Mopetar]

I'm curious how profitable digital music and video sales are for Amazon. From what I understand, Apple doesn't really make much from iTunes after paying the content owners and their own operational costs.

Amazon probably makes a little bit more for a few reasons. The biggest is that they probably get a better deal from the content owners. Until Amazon started their music store, Apple was pretty much the only game in town. Also Amazon has been involved in the cloud business longer than Apple and has probably been able to run their operation at a lower cost.

I think I'll hold out for a returned unit...

http://tech.fortune.cnn.com/2011/12/03/how-many-kindle-fires-are-being-returned-to-amazon/

Interesting article, but I'm not sure if I'd buy the correlation between one star ratings and returns. I'm not even sure if the Amazon product rating is a good representation of the overall feelings of Fire owners. After reading some of the Fire one-star reviews (as well a few of the iPad 2 reviews linked from the article) I can't help but come to the conclusion that there are a lot of idiots writing reviews and don't understand how rating scales work.

 

[Pliablemoose]

Interesting article, but I'm not sure if I'd buy the correlation between one star ratings and returns. I'm not even sure if the Amazon product rating is a good representation of the overall feelings of Fire owners. After reading some of the Fire one-star reviews (as well a few of the iPad 2 reviews linked from the article) I can't help but come to the conclusion that there are a lot of idiots writing reviews and don't understand how rating scales work.

The thing is, when you cast a wide net of potential customers, you're going to get a few knotheads, as evidenced by the largely way off the mark 1 star reviews.

You and I both know a significant number of consumers are going to purchase the Fire and expect a full fledged tablet experience, and they're not going to get it. Obviously the Fire is a runaway hit, and will continue to be very popular.

Fire purchasers are likely already Amazon customers, I know I am, primarily because of Prime and no taxes. Will the Fire really bring in more $? It will be interesting to see if Amazon will earn enough $ of increased sales from the Fire to continue it's plans of a larger tablet.

 

[Mopetar]

You and I both know a significant number of consumers are going to purchase the Fire and expect a full fledged tablet experience, and they're not going to get it. Obviously the Fire is a runaway hit, and will continue to be very popular.

I disagree. People who understand and follow technology will know exactly what they're missing, especially if they've used other tablets, but there are far more people who've never used a tablet than there are tablet owners, and most of them don't follow the tablet market. They don't know what to expect, and for them, the Kindle Fire will probably be good enough.

It's also $200. If they expect the same experience as a $500 tablet they're just as stupid as anyone who buys a Focus and expects the same experience as a Mercedes.

 

[Pliablemoose]

I disagree. People who understand and follow technology will know exactly what they're missing, especially if they've used other tablets, but there are far more people who've never used a tablet than there are tablet owners, and most of them don't follow the tablet market. They don't know what to expect, and for them, the Kindle Fire will probably be good enough.

It's also $200. If they expect the same experience as a $500 tablet they're just as stupid as anyone who buys a Focus and expects the same experience as a Mercedes.

I think our only disagreement is on what a "significant number" represents.

 

[LikeLinus]

The thing is, when you cast a wide net of potential customers, you're going to get a few knotheads, as evidenced by the largely way off the mark 1 star reviews.

You and I both know a significant number of consumers are going to purchase the Fire and expect a full fledged tablet experience, and they're not going to get it. Obviously the Fire is a runaway hit, and will continue to be very popular.

Fire purchasers are likely already Amazon customers, I know I am, primarily because of Prime and no taxes. Will the Fire really bring in more $? It will be interesting to see if Amazon will earn enough $ of increased sales from the Fire to continue it's plans of a larger tablet.

iSuppli says they are losing $2 on every tablet. The problem here is they do not know the actual supply agreements and it's more of a ballpark guess at this point. Even so, that's really only $8 million dollars loss.

Sounds pretty easy to recoup that money if you ask me. Kindle users on average purchase 3.1 times as many books as they did twelve months ago. Factor in music, video and possible new customers to Amazon and their purchases for ANY product, $8MM is a softball number.