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Looking for Kindle Fire Profit Plays

The following video is part of our "Motley Fool Conversations" series, in which Motley Fool senior technology analyst Eric Bleeker and chief technology officer Jeremy Phillips discuss emerging trends in technology.

In today's edition, Jeremy and Eric look at profit plays around Amazon.com's Kindle Fire. The Fire is already proving to be a massive success, with an estimated 5 million tablets being produced this quarter. However, with the tablet being a small part of Amazon's business and the company selling the tablet at extremely aggressive margins, investors who believe in the Fire's success might want to look at which chip companies are winning component slots within the tablet.

In this video, Eric and Jeremy break down not only who's inside the Kindle Fire but also whether those companies could see a bump from their inclusion in the tablet and how sustainable their position is in future Fire versions.

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Eric Bleeker and Jeremy Phillips own shares of NVIDIA. The Motley Fool owns shares of Apple, Cirrus Logic, Qualcomm, and Texas Instruments. Motley Fool newsletter services have recommended buying shares of Amazon.com, NVIDIA, and Apple, creating a bull call spread position in Apple, and writing puts in NVIDIA. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Comments from our Foolish Readers

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  • Report this Comment On November 26, 2011, at 10:24 PM, jz1492 wrote:

    While the Kindle Fire comes with a very attractive sticker price, it isn't really a tablet class device.

    At 7", the screen is too small to be comparable to the iPad. It uses a phone class OS, and it's ridden with several shortcomings --exactly the kind that could turn it fast into shelf-ware.

    It even fails as a reader, with poor rendering of color magazines, ugly small text, poor daylight visibility and short-lived battery.

    On the Apple side, the 8GB iPod Touch, at the same price of $199, is comparable in screen resolution and capacity, in a smaller ultra-portable size, while besting the Fire in almost everything else: apps, music, games, books, the web, movies, iCloud, video-out, AirPlay, PC synchronization, ...

    I say the Kindle Fire fails miserably after the first wave of buyers get to use it in everyday life.

  • Report this Comment On November 27, 2011, at 8:22 AM, jargonific wrote:

    The problem for now is that the global world of stock speculation has pumped up the price of Amazon stock beyond what they will logically gain for now. That means that investors will lead what Amazon does since they will struggle to keep their investments intact. This is the cost of high speed trade, of super computers that take out capital every split second. AMZN goes up a hair and they sell, it goes down and they buy, and in doing this they pull OUT the capital all the time. That is what is killing stock investing for the average person. They will lose against these computers eventually, as their timing is brilliant, calculated, and based on scientific studies of investor practices. Wake up and smell the coffee. It's time to invest in small companies that do alternative energy, before its too late, and demand politically that governments protect them from corporate raiders like the ones at Total who snatched Sun Power away and put it on the shelf. This is how jobs and precious patents are lost.

  • Report this Comment On November 27, 2011, at 8:24 AM, jargonific wrote:

    We're staying with Broadwind for now. Sold with great reluctance after they came down. Bought back in below 50 cents and will hang on hopefully. BWEN is one co. we see as having potential, however, they seem to be already ripe for a take over by Siemans or some other company that 'hires' them.

  • Report this Comment On November 27, 2011, at 8:37 AM, foolindeed1 wrote:

    Amazon's own web site has hundreds of reviews of Kindle Fire's new owners that gave it 1 or 2 star reviews because of its choppy/laggy experience with this underpowered device. Also is it confirmed that a lot of Fire units have faulty Wi-Fi thus users have issues connecting to Internet. All pro reviewers on the web noted that Kindle Fire's performance is significantly worse than Nook Tablet from Barnes & Noble. 

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