The $199 Amazon Kindle Fire is expected to put pricing heat on tablet market. And it's not just the iPad that will feel the pressure, according to an analyst and a cost analysis report today.
"It establishes a new price point for the low to mid-range tablet. Apple will likely have to respond," Ashok Kumar, an analyst at Rodman & Renshaw, said in a phone interview.
A report today from UMB TechInsights says Amazon will make a profit on hardware sales of its Kindle Fire "but probably only a third to a quarter as much as the Apple iPad and [BlackBerry] Playbook," according to estimates from TechInsights that show the Kindle Fire's bill of materials at $150.
That kind of profit margin loss-leader stance "can be viewed as a major blow to all Android tablet manufacturers who really have no way to compete since the channel mark-up would require [that] companies put their tablets at or below cost to beat the Kindle Fire price--and they still all lack the content that the Amazon storefront has," according to the report, citing Jeffrey Brown, vice president of business intelligence at TechInsights. … Read more