Kindle to disrupt tablet market as cost becomes king
CCS Insight and Context predict big shake-up for tablet space as big boys get aggressive on price
The Amazon Kindle Fire will put a cat among the tablet market pigeons as consumers increasingly make buying decisions on price and features, rather than brand, two analysts have predicted.
Research from Context, in partnership with CCS Insight, claims that while Apple still dominates the western European tablet market, demand for other vendors' devices is creeping up. The Asus Eee Transformer and the Acer Iconia were singled out as two products to have enjoyed a degree of popularity this year.
Despite this, the Taiwanese pair lost market share in September. The two vendors' unit sales were flat sequentially, while the market grew 20 per cent around them. Context and CCS Insight conclude that, while demand for non-Apple tablets exists, current price points are hitting sales.
Seven-inch tablets currently account for just two per cent of units sold in western Europe, but the two research houses anticipate that the Kindle Fire will boost sales in this segment. They also predict that tablet and smartphone bundles offered by network operators could increase the competitiveness of the marketplace in the run-up to Christmas.
Gavin Byrne, principal analyst at CCS Insight, said: "Amazon's Kindle Fire could shake up the tablet market. Its keen price, combined with the marketing muscle of Amazon's website, will attract new audiences to the tablet market. In the longer term, Amazon's strong media offerings, including streaming movies and TV shows, may threaten Apple's dominance of this area."
The iPad-maker's pre-eminent position could be further threatened by the upcoming launch of second-generation models from players including Samsung and Asus. In the short term, non-Apple vendors are forecast to get very aggressive on price in the fourth quarter as they attempt to snaffle more market share and, in some cases, flush out excess stock in distribution.
CCS Insight and Context believe that, as the manufacturer landscape diversifies, customers will increasingly focus on cost when shopping for a new tablet.
Salman Chaudhry (pictured), mobile analyst at Context, said: "Clear price points and propositions are not yet established. It seems that consumers have tended to play safe and buy on the strength of the Apple brand; however, we are expecting factors like operating systems, apps and interworking with existing devices to become part of the decision-making process."