Amazon.com Inc. (AMZN) is trying to increase its market share in the intensely competitive tablet market with the shipping of Kindle Fire high-definition (HD) 7 and Kindle Fire HD 8.9 across 170 countries from Jun 13.
The Kindle Fire HD 7-inch and 8.9-inch devices are now available for pre-order at a price of $214 and $284, respectively. So far, these devices were only available in the U.S., the UK, Germany, France, Spain, Italy and Japan.
The 8.9 inch Kindle Fire HD comes with dual band Wi-Fi connectivity and MIMO technology that enable streaming and downloading of videos at a faster pace. The model features a 1,920x1, 200 HD display with 254ppi as well as a front-facing HD camera.
The new Kindle Fire HD also has an X-Ray feature, which provides useful insight about books or movies to the users. Besides, Kindle Fire HD also includes an upgraded version of Immersion Reading that allows the user to hear narration by a popular actor while reading a book.
Amazon entered the tablet market with Kindle Fire in late 2011 when Apple Inc. (AAPL) was already a major player. However, Amazon’s lower-priced Kindle Fire also witnessed very strong demand. Other players like Google Inc. (GOOG) and Microsoft Corp. (MSFT) have also stepped in to grab a share of the pie.
According to International Data Corporation (:IDC), Apple is still leading the market with a 39.6% share, having grown 65.3% from the first quarter of 2012, followed by Samsung with a 17.9% share and Asustek with 5.5%. Amazon is in fourth position with a mere 3.7% market share.
Amazon is one of the leading players in the extremely fast-growing retail e-commerce market. We view Amazon’s expansion into the tablet market as a defensive move, designed to protect its leading share of the e-reader market and increase the sales of books and other digital products through the Kindle platform. Therefore, device sales are relatively less important for the company than the e-commerce sales it generates.
While the strong growth prospects are making the e-commerce market more competitive by the day, Amazon continues to maintain and even grow its share on the back of its consistent and reliable service. Amazon’s scale of offerings, its broad reach and platform approach are the keys to its success.
Currently, Amazon has a Zacks Rank #3 (Hold).
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