Amazon Kindle Fire HD Strategy Could Be Apple Margin Headache

Summary: Amazon's move to mock the iPad mini price on its home page illustrates how the company plans to use its hardware as consumption vehicle model to its advantage.

Amazon is pitching its Kindle Fire HD directly against Apple's iPad mini on its home page in a move that also illustrates dueling business models.

Consider the nuances behind Amazon's home page campaign vs. the iPad mini:
  • Apple is primarily a hardware company and sells premium devices. 
  • Amazon is also selling tablets and aiming for high quality at value prices. 
  • Amazon's hardware pricing is cheaper because it'll sell the Kindle Fire HD at roughly cost and make money as consumers use the device.
For now, both designs co-exist well---and most likely will continue that way. However, Amazon is forcing its sponsored components design and if an whole market goes that route it will put stress on the iPad small.

When The apple company released its iPad small it took immediate aim at the Search engines Nexus 7. The discussion was that the iPad small was worth the $329 cost tag, which was a bit great to a few experts. Amazon is working the understanding that the iPad small cost is too great.

All Amazon has to do is be in the same community as the The apple company components features. Less expensive costs along with a powerful environment may take care of the rest.

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