Amazon is putting competition with tablets under pressure

Low prices and new business models, especially against Apple

Amazon is putting its competitors in the tablet market under pressure with the presentation of its new Kindle Fire products. The aggressive pricing is well below the offers of many competitors and, according to some experts, even gives Amazon losses for every device purchased, as the Wall Street Journal reports. In the fight for valuable users, whose hunger for apps and services has aroused the desires of tablet manufacturers, Amazon is trying everything to chase away the industry leader Apple users: The low prices are subsidized by advertisements that users can only get rid of for a monthly fee.

"Monopoly-like market shares like Apple's for tablets are not very long-lasting. Every newcomer is a danger. Amazon products are very cheap and the equipment also sounds good. They are said to be so great that all iPad users overflow immediately According to the trade press, however, it will not be Fire models. The fact that Google is also offering a well-made tablet at a loss price with the Nexus 7 tablet is strategically smart and increases the pressure on Apple, "says Eerik Budarz from Silvia Quandt http://silviaquandt.de opposite pressetext.

Tablet price war

Tablet: Price war flares up (Photo: Wikipedia, copyright Simon Branney)

Technical tie

Although the technical features of the various tablets are no longer very different from one another, Apple's high-priced devices are still the most popular products on the market. According to a study by the market researcher IDC, Apple sold an impressive 2012 percent of all tablets in the second quarter of 68. In contrast to the smartphone sector, the throne of the high-tech company from Cupertino is not yet wobbling here. Amazon's dumping prices could change that now. The cheapest entry-level model in the Fire product range costs just 159 euros. Apple iPads are not available for less than 399 euros.

This enormous price advantage will give competitors and consumers food for thought. A saving of almost 250 euros should be attractive even for die-hard Apple fans. The more expensive Fire models are also cheap compared to comparable Apple products.

Aggressive methods

At the presentation of the new devices, Amazon boss Bezos admitted that the group would not make a profit or even a loss when selling the hardware. He added, however, that Amazon wants to earn its money selling apps and services on the Kindle platform. The online giant as a business is therefore of little interest to the online giant. "It will be interesting to see whether Amazon will manage to establish successful additional services. This will be more difficult in Europe because the market for e-books is not yet as advanced as it is in the USA," said Budarz.

Experts expect that Apple, which normally notoriously refuses to adjust its high prices, will at least respond with a new product. A smaller iPad, which is supposed to be cheaper, is expected this year.

In order to cushion the expensive pressure on the competition financially, Amazon designed its new products as an advertising platform. The home and unlock screens are filled with advertisements by default. It was only after pressure from users that Amazon announced that it would offer an opt-out option for $ 15. So Amazon is exhausting every opportunity to be able to sell its hardware cheaper. Nevertheless, analysts are currently assuming that Apple's competitors can only argue for second place even with cheap prices. Because the apple servants have something that the competition does not yet have: a huge range of apps specially adapted for the iPad.

"That is also one of the reasons for Amazon's advance. The group needs a broad base in order to be able to sell many additional services. The principle is therefore similar to that of razors, where the devices are almost given away, but the blades cost a lot of money. In the end only has to get the same or at least a similar amount over a longer period of time, "explains Budarz.

(ck) 11.09.2012/XNUMX/XNUMX

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