Amazon has taken an interesting approach to their Kindle Fire tablet. While the company is trying desperately to knock the iPad off its perch as the top selling tablet, it is doing so while taking a loss on hardware. Of course, Amazon has decided that while it will actually make less per unit sold than it cost to produce each Fire, they will make up that money on the back end through app sales. If the sales figures the company saw on Black Friday (News - Alert) are any indication, they should be seeing some huge app sales after Christmas.
While the iPad costs more to buy, the two tablets run about the same amount of money to put together. This is why selling the Kindle Fire for $200-$400 less than the iPad was a calculated risk by Amazon. Selling the Kindle Fire for $199 means Amazon loses about two dollars per unit, while Apple (News - Alert) rakes in somewhere in the neighborhood of $300 per iPad sold. If Amazon was afraid that they were not only going to be selling cheaper tablets, but also not drumming up any interest thanks to the massive popularity of the iPad, the company's Black Friday sales numbers should assuage that fear.
Amazon doesn't usually give out specific sales numbers, but the company did issue a press release this morning in which it trumpets that it sold four times as many Kindle products as it did in 2010. The company adds that Black Friday in 2010 was a very good day on its own, so Amazon big wigs have to be smiling today.
While the Kindle Fire has long been rumored to be the iPad killer that the other tablets simply couldn't be, there have been those who don't believe the iPad will be knocked off its perch until a truly new tablet is revealed. It appears that the name brand recognition, as well as the price might indeed see the Kindle Fire become the more popular tablet before all is said and done. According to the same release, Amazon says that Target (News - Alert) sold more Kindle Fires than iPads on Black Friday. A sign of things to come?
Edited by Rich Steeves