I received my Kindle Fire last week and was feeling delightful playing with the gadget. When iPad came out, I thought about buying one for myself but I just couldn’t justify spending $499 for a gadget I knew I would not use much since I like to do most of the work on my trusty PC. However, I’m aware of the “mobility” factor for millions of users out there.
Here is why I think the Kindle Fire “may” impact Apple’s iPad sales growth.
1) Parent with 2+ kids may not want to buy each kid an iPad for X’mas. For the price of one iPad, parent can buy 2 Kindle Fire (Yeah! one for each kid!)
Each kid can now watch their own movies, play with their favorite apps, etc while traveling with parent (either in car or airplane).
2) With a much smaller form factor than iPad, taking the Kindle Fire with us wherever we go is a no-brainer. In other words, Amazon has taken the tablet PC to the next level in mobility!
3) Amazon has an amazing name brand that associates with reading, video, and music. Thus, people will more likely buy the Kindle Fire over other non-Apple brand tablets out there.
Will it replace iPad2? I don’t think so. iPad2 definitely has its advantage giving its size and features; but the Kindle Fire has the “potential” to take away prospective customers who were thinking of buying an iPad but now prefer the Kindle Fire giving the 3 points I mentioned above.
In summary, by January Apple earning report, we will know if the Kindle Fire impact iPad sales. And if it does, the price action of Apple won’t be a pretty sight.
Disclosure: I bought Apple Jan 2012 380 put option since price action last Thursday broke thru AAPL Nov 14th pivotal low. I also have my mental protective stop near the top of Nov 14th pivotal low as well in case I’m wrong.
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