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Analysts Call Amazon Kindle Fire a 'Gateway Device' for iPad 2

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By Vincent Funaro, Christian Post Reporter
December 6, 2011|3:25 pm

The Amazon Kindle Fire seems to be competing best this holiday season with the tablet market's current leader the iPad 2.

However, the Amazon Kindle Fire is now being called a “training wheels” device for customers that will likely upgrade to an iPad in the end.

J.P. Morgan analyst Mark Moskowitz recently commented on the two devices in a note to clients this past Friday stating that the Fire was similar to a "gateway device."

“In our view, Apple appeared confident in its position of strength in the tablet market continuing,” said Moskowitz. “We believe that Apple is not too concerned about the low-priced entrants. If anything, we think that Apple views the Kindle Fire as a device that stands to bring incremental consumers to the tablet market, and here, these consumers could gravitate to more feature-rich experiences.”

In other words consumers who buy an Amazon Kindle Fire will enjoy the device for a time, with it is being a great low-priced tablet, however once the appetite for a tablet is wet for a customer, they will begin to desire a bigger and more powerful device such as the iPad 2.

Most consumers seeking a tablet want to buy either an iPad 2 or an Amazon Kindle Fire, according to most recent surveys. However, Apple’s dominance has remained untouched in this area.

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“While Amazon’s Kindle Fire has come out of the gates strong, as expected, we see Apple maintaining its competitive lead, if anything accentuated by what now looks like the only tablet to mount any credible iPad challenge apparently needing to do so by selling at cost; not to mention Amazon’s success may just vaporize other ‘for profit’ Android tablet OEM roadmaps,” said Fortune’s Philip Elmer-Dewitt in a recent statement.

Moskowitz, along with some other analysts in the industry, recently met with Apple CEO Tim Cook and left the encounter confident in Apple's plans to continue delivering a quality product with the iPad brand.

 

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