Market Overview

One Popular Kindle Fire Feature the iPad 3 Will Not Have

It's the number-one reason that consumers buy the Kindle Fire. But is it enough to stop Apple from maintaining its lead in 2012?

According to a new survey from ChangeWave Research, 59% of Kindle Fire users bought the tablet not for the screen, book selection, battery life, or the size/weight of the device. Consumers most frequently purchased Amazon's (NASDAQ: AMZN) first tablet because of the price.

While this has been the primary assumption since the day the new tablet was unveiled, ChangeWave has provided us with the first time that any data has been gathered to support this view.

changewavefeb2_kindle_likes.jpg

If, however, you take a close look at the rest of the survey's results, you will notice a very troubling trend. For starters, “color screen” came in as the second most popular feature. In an era where virtually every device in the world (even appliances!) features a color screen, is that really something to write home about? These results suggest that a large number of the consumers surveyed were owners of the colorless Kindle e-readers. To them, the color screen might seem like a significant upgrade. To the rest of us, it's no different from the zillions of other devices we use every day.

In terms of satisfaction, ChangeWave reports that 54% of Kindle Fire users are satisfied with their tablet purchase (as of January 2012), whereas 74% of iPad users are satisfied with theirs (as of November 2011).

changewavefeb2_tablet_comparison.jpg

That's a significant gap, but the difference isn't as great as one would expect. Granted, these surveys are not apples-to-apples comparisons. Whereas Apple (NASDAQ: AAPL) might have very high expectations for their $500+ tablet, Kindle Fire shoppers may have acquired the device with the belief that you can't expect the world from a $200 device. And since the iPad and Kindle Fire data were acquired separately (and during different months), the results must be taken with a grain of salt.

Consumers also have a wide range of dislikes for the Amazon-built device, which include battery life (it's too short), the lack of 3G/4G functionality, the weak number of available apps, and the small screen size. These are all things that the iPad excels at, especially app content. (Apple is, of course, the inventor of the “app store” concept.) What's interesting is that consumers were more upset by the lack of an up/down volume button than the absence of a camera.

This could be because consumers decided to buy the device knowing it didn't have a camera, thus reducing their disappointment. But I'm willing to bet that very few consumers knew that Amazon had gone the cheap route and decided to exclude a proper volume button. Reportedly, no one hated buttons more than Steve Jobs, but even the iPad (and the iPhone and iPod Touch) have volume controls. Why would Amazon skimp on a feature so important? To turn a profit or reduce its loss, of course.

While the aforementioned data may not guarantee that the inevitable Kindle Fire 2 can meet or exceed the sales of the original, Amazon's primary (retail) market is on the rise. According to ChangeWave, 20% of the people surveyed plan to spend more money at Amazon.com, versus 3% at Costco.com (NASDAQ: COST), 3% at eBay (NASDAQ: EBAY), 2% at BestBuy.com (NYSE: BBY), 2% at Walmart.com (NYSE: WMT), and just 1% at Target.com (NYSE: TGT). On the downside, 11% of the survey participants said that they would spend less at Amazon, versus 4% at Costco.com, 8% at eBay, 8% at BestBuy.com, 5% at Walmart.com, and 4% at Target.com. Among the six retailers in question, Best Buy might be in the worst position. Amazon's decline, however, is worth noting – even though the company still comes out ahead (20% – 11% = 9%).

When the iPad 3 is released this quarter or the next, you can be sure that it won't retail for $199. In fact, you can be pretty sure that when Apple marks down the cost of the iPad 2, it won't retail for $199 either ($250 to $300 seems more likely).

Judging by the growth of the iPad brand, however, one thing is clear: when it comes to Apple-made tablets, the price may very well be the last thing on consumers' minds.

Follow me @LouisBedigian

Posted-In: Amazon Apple iPad iPad 2 Kindle FireSuccess Stories Tech Best of Benzinga

 

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