Amazon’s $50 Fire Seen Sparking ‘Significant Change’ in 'Competitive Landscape’

Amazon’s introduction of its low-cost Fire tablet has sparked “a significant change in the tablet industry’s competitive landscape,” ABI Research said in a Monday report. At $50, the Fire’s price “is significantly lower than the average vendor selling price of $323,” ABI said. “It is a calculated risk that Amazon can afford to take as the company shifts its revenue focus away from solely hardware and toward recurring digital content sales.” ABI Research estimates Amazon sold 5 million units of its various tablet models in Q4 2015, it said. That was enough to rank Amazon third overall for branded tablet shipments in the quarter, behind Apple (16.1 million units) and Samsung (9 million), it said. For calendar 2015, Amazon sold 7.6 million tablets, ranking it fifth behind Apple (49.6 million), Samsung (34.1 million), Lenovo (11.1 million) and Huawei (7.7 million), it said. Most tablet suppliers are taking a “wait-and-see approach” to Amazon’s $50 Fire, ABI said. Going for such a low-ball price is “a path only few can follow, as vendors without content distribution rights and value-added services can only rely on the transaction price of their hardware to stay in business,” it said. “Conversely, content owners may find value in broadening their ecosystems by striking relationships with tablet vendors to get their programming in front of more users.”