Launch of Low-Cost Amazon Fire Tablet Sparks Change in Competitive Landscape
When Amazon recently launched its Fire Tablet for $50, ABI Research reportedly identified that there was set to be a significant change in the tablet industry’s competitive landscape. The Fire’s price is significantly lower than the average vendor selling price of $323. 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 that the company sold five million of its various tablet models during the final three months of 2015. At this figure, Amazon ranks third overall for branded tablet shipments for that quarter and fifth for the full 2015 calendar year.
“Unlike other tablet manufacturers, Amazon views hardware as a commodity and emphasizes focus on its recurring digital content revenue stream, generated from selling digital books, music, TV, and video programming to owners of its devices,” says Jeff Orr, research director. “The incredibly low pricing of the Fire Tablet is a smart and strategic move, as few others can afford to accept a lower margin on their tablet devices in favor of driving a surplus of content-related revenues.”
For more information, visit www.abiresearch.com.