Amazon expected to sell 3 to 5 million tablets in Q4 2011

Amazon expected to sell 3 to 5 million tablets in Q4 2011

Summary: Forrester Research predicts that Amazon's tablet will be a huge hit in its first quarter of availability.

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Although Amazon hasn't even officially unveiled a tablet of its own yet, some tech insiders are ready to bet big on its success.

Sarah Rotman Epps, a senior analyst at Forrester Research, argues that Amazon can launch a tablet priced below $300, then Amazon will likely sell three to five million tablets in the fourth quarter of 2011 alone -- that is if we even see it this year.

In comparison, Apple shipped 4.69 million units of the iPad 2 in the second fiscal quarter after it launched this year, and then another 9.25 million during the third fiscal quarter.

However, Motorola shipped 440,000 Xoom tablets in its first quarter of availability, and RIM managed to do slightly better with 500,000 sold units of the BlackBerry Playbook.

Epps acknowledges on Forrester's blog that this is going to be a major battle for Amazon to take on Apple (and Google as the tablet is expected to run on Android), but she still posits that Amazon will at least become in second to Apple and become the leader in the Android space:

We see potential for Amazon not only to launch its own hardware as an "Amazon tablet" but also to be a platform for other OEMs, layering Amazon’s software and services over Android to provide a richer customer experience. In a year from now, we could see a range of "Amazon tablets" made by different hardware manufacturers.

While Amazon could possibly present Apple with a strong challenge in the tablet space, it's still too soon to tell. Not only have we not even seen what Amazon's tablet looks like or what it can do, but assuming that just because Amazon is a big name with lots of resources does not mean that it can produce a great tablet. Look at Hewlett-Packard.

However, looking at HP's TouchPad as an example from another perspective, Epps could be right with the sub-$300 price point argument. Just look at how well the TouchPad did when the price was slashed to $99. Although that was done for a number of reasons (including the fact it couldn't even sell at $299), there is definitely a lesson to be learned there. Most consumers don't want to pay $499 and up for a tablet with the exception of the iPad.

Thus, starting off with a lower price point from the get-go might at least one way of luring more customers into an Android-based tablet.

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Topics: Hardware, Amazon, Laptops, Mobility, Tablets

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43 comments
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  • RE: Amazon expected to sell 3 to 5 million tablets in Q4 2011

    That's the first quarter of sales, they don't mention what might happen after that. I'm guessing sales go way way down in a saturated tablet market. Not just for Amazon but for everyone, we've already seen it with HP's Touchpad.
    LoverockDavidson_-24231404894599612871915491754222
    • RE: Amazon expected to sell 3 to 5 million tablets in Q4 2011

      @LoverockDavidson_
      and lets not forget to mention specifically windows 8 tablets will meet the same fate, which is unfortunate since the tablet UI is the main focus of this release. Too bad they will have undertaken such a significant redesign for what may be a passing tablet fad.
      deathjazz
      • RE: Amazon expected to sell 3 to 5 million tablets in Q4 2011

        @willyampz
        But Microsoft Windows 8 isn't limited to just tablets. It will be used on the desktops as well. Microsoft saw the tablet fad and made their OS multipurpose.
        LoverockDavidson_-24231404894599612871915491754222
      • So why should that matter to MS?

        @willyampz

        Windows 8 will run on a tablet or computer, whichever you prefer to buy. MS will make money either way, the hardware makers, not so much.
        William Farrell
    • Saturated?

      That's the thing, though. The market is far from saturated. Apple has sold well, but only a tiny percentage of people have a tablet at this time. Most people are still waiting on the sidelines, watching to see what develops.

      What we have seen so far is the iPad, which is an expensive but attractive toy, a host of Android devices which are cute but also expensive and riddled with problems, and the Touchpad, which was expensive but created a storm of activity when it was dumped at a low price.

      There are two things necessary to get a tablet other than Apple's to sell: Price and ecosystem. Samsung and others have nice hardware, but at too high a price and with no ecosystem. Enter Amazon, who already has an ecosystem in place not only to rival Apple's but to leave it in the dust, and is both willing and able to subsidize the price to gain market share. Unlike Apple, Amazon will forge alliances with others to further their goal.

      Perhaps for the first time consumers will find that there really is another choice. If so, there is a vast untapped potential market out there for the taking.
      itpro_z
      • RE: Amazon expected to sell 3 to 5 million tablets in Q4 2011

        @itpro_z
        I don't think people are waiting on the sideline. Those who don't have one either thinks its too expensive or can't justify a reason for one. There has already been reports floating around (including comments by aser ceo) that demand for tablets seems to have flattened out. A lot of people don't want that to be true or want you to believe it could be true because its helping to prop up spending in that sector.
        rengek
    • Actually, at $99 HP TouchPad sales ...

      @LoverockDavidson_ ... went through the roof. HP cannot sustain the TouchPad at $99 but had they sold it at $250, they might have. If people have to spend $500, they will stick with the iPad (or go without). At the right price-point, the tablet market is a long way from being saturated.
      M Wagner
  • Frustrating to hear this stupid "if it were $99" argument

    "Just look at how well the TouchPad did when the price was slashed to $99."

    The TouchPad was not profitable at $99. In fact, it lost HP a ton of money. They were simply trying to get rid of inventory.

    It would be like Ferrari deciding to go out of business and to sell off all their stock at $10,000 / car. Ferrari sales would skyrocket. Would anyone truly suggest that it would therefore be a good business model to sell a car that costs $100,000+ to build for $10,000?

    There IS a huge market for 200+m.p.h sports cars as long as they are priced at $10,000. /sarcasm

    The better question is to ask how well a tablet that costs $98 would sell if priced at $99? My prediction is that even with only $1 profit per unit (discounting R&D and all overhead) that tablet would be an epic fail because it would be so fantastically bad that spending $99 on it would be a total waste of money.

    HP was likely losing money at $299 / unit. It was lowered to that in order to attempt to gain a foothold in the market. So looking at the success of the "$200 / unit money losing" $99 TouchPad as any indication of what a successful business model looks like is incredibly mind numbingly stupid. The profitable "$99 tablet with $299 worth of components in it" market does not exist.
    toddybottom
    • The point about the HP TouchPad ...

      @toddybottom ... is that WebOS is far more mature in look and feel than Android. (It took me less than ten minutes with both kinds of devices to figure that out.) You are correct that HP could not afford to sell it at $100 apiece but they might have been able to afforsd to sell it at $300 apiece and that might have made the difference between successfully competing in the tablet market or not.

      The $10,000 Ferrari is a flawed example because it costs the same to maintain an HP TouchPad as it does to maintain an iPad.

      That $10,000 Ferrari would cost thousands more per year to license, to fuel, and to insure than your average Honda Civic.
      M Wagner
  • Just had a crazy idea

    Why doesn't Amazon <em>buy</em> RIM?
    x I'm tc
    • Because the playbook has proven true the pre playbook predictions

      that there is very very little interest in a RIM tablet/ecosystem. Why would a company entering a race want to chain an anchor to their ankle before it starts?
      Johnny Vegas
      • RE: Amazon expected to sell 3 to 5 million tablets in Q4 2011

        @Johnny Vegas

        Has it? Selling 500,000 units is nothing to sneeze at. It's selling better than the Motorola Xoom, yet I haven't seen anyone suggest that the Xoom proves that there is no interest in an Android tablet.

        By my calculations, 500,000 units makes the Playbook #3 in the market, after the Galaxy Tab and the iPad, and the Galaxy Tab has been out for more than a year.
        Doctor Demento
    • Because Amazon is a retailer ...

      @jdakula ... and they want to provide you a tablet which will let you buy whatever you want, whenever you want it, no matter where you are located - from a retailer that you already trust. They are not a hardware company so they can afford to take a loss on every single tablet in order to get you to buy (not just content but everything else) from Amazon.
      M Wagner
  • Eat more unicorns

    Some of the most sophisticated high volume manufacturers in the world have tried to build tablets that are comparable to the iPad, yet cost less. Not one has come in below $300, and most are over $500. Yet Amazon has the capability to launch a tablet for less than $300? What do they know about manufacturing and supply chain management that has escaped Samsung, Motorola, and HP?
    Robert Hahn
    • It's all fantasy anyway

      @Robert Hahn

      I mean talk about pulling numbers out of the sky. Let's see assemble better hardware at lower cost than Apple can get, then sell it for significantly less than Apple (i.e. at a loss) then mix in a competitive ecosystem that doesn't yet exist= 4 million unit sales. Woohoo! Why it's so obvious and easy why isn't everybody doing it?
      oncall
      • Supply chain PLUS ecosystem EQUALS unbeatable Apple

        @oncall <br>I totally agree with you. There will not be any real competition to the iPad for at least 10 years (I predict closer to 20 years). An ecosystem does not pop up overnight.
        toddybottom
      • RE: Amazon expected to sell 3 to 5 million tablets in Q4 2011

        @oncall

        You have no clue what you are talking about. Have you tried Zune desktop for Zune HD and Win 7 phones? Music, video, apps. Check, check, check.

        The problem with Android is that Google doesn't appear to be interested in operating a store. Sure you have the App Store, but nothing for the rest. Then you have individual phone makers who are developing their own ecosystem, like Samsung. Too fragmented.

        Amazon does have the music, video and apps to sell. Now they need to convince us that it is so easy to do so on an Amazon tablet that we should buy a tablet from them.
        mstrsfty
      • I ask for a competitive ecosystem

        @mstrsfy

        And you give me Zune, which is not even available for tablets so, umm, is useless to this discussion. Video, music apps=competitive tablet ecosystem? That's all it takes eh? Sure sounds easy such that Walmart could toss one together over a weekend. Oh wait...
        oncall
      • Ah, but Amazon has had the ecosystem in place ...

        @oncall ... as long as Apple and Amazon is not saddled with Apple's overhead.
        M Wagner
    • RE: Amazon expected to sell 3 to 5 million tablets in Q4 2011

      @Robert Hahn
      Good question. Wouldn't that put Amazon tablet at cheap android tablets level except for the brand name, I don't see the specs would be that compelling.
      Ram U