Amazon tablet to release in 4Q11, but success doubted
Yenting Chen, Taipei; Joy Wan, DIGITIMES [Thursday 22 September 2011]
Market observers are showing concerns as to how Amazon will differentiate its e-book reader market from that of its tablet while making profits for both after the company's launch of the 7-inch tablet in fourth-quarter 2011.
Amazon's shipment goal for its 7-inch tablets has not been affected by Hewlett-Packard's (HP) possible move of giving up its tablet business, according to sources in Amazon tablet's supply chain, adding that shipments of components will be sufficient for making more than one million Amazon tablets by the end of September 2011.
But the sources remain skeptical whether Amazon can meet its shipment goal of four million units in 2011.
The sources also pointed out that Amazon may run a risk by releasing a 7-inch tablet when 10-inch models have mostly outperformed 7-inch competition over the past six months. In addition, the price cut strategy that Amazon uses has been gradually impaired by other low-priced models, such as the US$249 Nook Color and the US$199 IdeaPad A1, they said. It remains to be seen whether Amazon can replicate its e-book reader success in the tablet market, they said.
Amazon's success in e-book readers has also boosted revenues of its component suppliers. E Ink Holding, which supplies e-paper for Amazon, reported total sales of NT$3.47 billion (US$114.36 million) in August 2011. The supplier expects a total NT$10 billion in revenues for the third quarter, citing a positive outlook for second-half 2011.
E-readers at the assembly line. Photo: Digitimes archive