When J.P. Morgan analyst Mark Moskowitz lowered, slightly, his iPad sales estimate for Apple’s December quarter this week, he cited better-than-expected momentum for Amazon’s Kindle Fire as one reason — but with an important caveat: He sees no structural change to the iPad demand environment.
In other words, the iPad juggernaut rolls on. And while the Fire may aspire to be the No. 2 player in the tablet market, it’s got a ways to go before it gets there.
And a battle to fight, one that may require a better weapon than the Fire — according to Moskowitz, anyway.
“We think that for any vendor to wrestle momentum longer-term from Apple, a fully loaded offering is a must, and here, the current revision of the Kindle Fire falls short,” Moskowitz says. “We think that, over time, consumers may come away disappointed with the Kindle Fire’s lack of functionality and smaller screen size. In our view, the Kindle Fire is the current netbook of the media tablet market.”
The netbook of the tablet market.
That’s a harsh analogy. Netbook sales, of course, have been in decline for a while now, with many claiming the iPad is partially responsible for their deterioration. And netbooks themselves have often been disparaged as cheaply made and underpowered, often by Apple, which has long taken a dim view of them.
As CEO Tim Cook said in 2010: “I’ve been very clear about my view of netbooks. I think they are an experience most people will not want to continue to have. People were interested in their price, but when they got them home, they said, ‘Why did I buy this?’”
Which is not to say that consumers purchasing the Kindle Fire are asking themselves that question. The device has gotten some decent reviews, is selling well and, according to some analysts, will continue to do so throughout 2012. But it’s conceivable that the question might arise among those whose expectations were too high.
“To be clear, the Kindle Fire is much less capable and versatile than the entry-level $499 iPad 2. It has a fraction of the apps, a smaller screen, much weaker battery life, a slower Web browser, half the internal storage and no cameras or microphone. It also has a rigid and somewhat frustrating user interface far less fluid than Apple’s.”