The imminent arrival of Amazon's Kindle Fire tablet has depressed sales of Apple's iPad 2 according to new research.
We saw this with the sales of Apple's iPhone 4 in the weeks leading up to the release of the iPhone 4S: it was exactly that holding off on purchases which led to Apple missing Wall Street estimates for the quarter's earnings.
A new survey indicates that Amazon's Kindle Fire tablet is causing some prospective iPad purchasers to think twice.
Conducted by ChangeWave Research and reported by Fortune, the survey asked 2,600 "early adopter types" about their purchase plans for the Kindle Fire, which will be released next on Tuesday.
Of those surveyed, 26 per cent of those planning to purchase a $199 Kindle Fire responded that they were delaying or putting on hold a purchase of Apple's $499-to-$829 iPad 2.
Of course, this is in no way the be all and the end all of the story. What will happen when Amazon's Kindle Fire is actually released is that some will buy it, some will wait and see and some will, having seen, go and buy an iPad. The interesting question will be how many go and do each.
Perhaps the Kindle Fire will become a serious rival to the iPad, perhaps it won't: we're reliant upon waiting and seeing what people actually do before we can work that out. And it's only after that that we can find out which is going to be the dominant business model.
Apple makes great kit, no doubt about that, but it charges great kit prices for it too. Then it makes a further margin on selling content (music, videos, movies, books) to go onto that kit. Nothing wrong with it but it is a model that might be vulnerable. Vulnerable to someone using the Gillette tactic ("give away" the razors in order to sell more razor blades) as Amazon is. Price the Kindle Fire at just about break even point and hope to make the profits by having a larger installed base to sell the content onto.
Your guess is as good as mine as to which method is going to win out: we'll have a reasonable idea in about a year I would guess.
Amazon certainly thinks the Kindle Fire is going to do well:
Demand for Amazon's 7in tablet, the Kindle Fire, is sufficiently strong to prompt the online retailer to increase its production orders by 42 per cent, it has been claimed.
Amazon originally asked to be sent 3.5m Fires from Taiwanese factories before 2011 is out. Now it wants 5m of the devices, say component makers, according to Digitimes.
