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As if investors really needed any more evidence that Amazon.com (Nasdaq: AMZN ) was gearing up for an imminent product launch of its second-generation Kindle Fire on September 6, the e-tail giant is giving us just that. As usual, don’t expect too many hard numbers. In their place, you can expect some vague and generic statements.
The most specific number still isn’t all that specific
The company has now announced that its Kindle Fire is sold out, adding that it quickly became the "#1 best-selling product across the millions of items available." Amazon also claims to have captured 22% market share of domestic tablet sales over nine months. That’s about the most specific number Amazon has ever officially given us on Kindle Fire unit sales, as opposed to the "millions" that it frequently tells us it has sold, which could theoretically be anywhere from 2 million to 999 million.
I pulled up worldwide tablet shipment estimates from IDC, which totaled 70.6 million between Q4 2011 and Q2 2012, which would have implied 15.5 million Kindle Fire units, except that Amazon’s figure was for "tablet sales in the U.S." Additionally, the Kindle Fire is only available in the U.S., so most of the worldwide market remains out of bounds. IDC does provide its own estimates of Kindle Fire unit shipments, though.
|Quarter||Estimated Kindle Fire Shipments|
|Q4 2011||4.7 million|
|Q2 2012||1.2 million|
CEO Jeff Bezos called the Kindle Fire the "most successful product launch in the history of Amazon," thanking the "millions of customers" (there’s that "m" word, again) who made the device’s success possible.
Can you hear me now?
Make no mistake: This press release is a loud proclamation to the world that a new Kindle Fire (or two) is en route exactly one week from today. It’s not as if Amazon would pull the plug for no reason, which would be like saying, "Party’s over, everyone. It was fun while it lasted, but we’re going to stop selling our most successful product in history cold turkey, because Jeff Bezos has gone off his rocker." Yeah, right. On the contrary, Bezos is as sharp as ever.
No, this is no accident. Clearly, production has been ramping down, while Amazon let its inventory sell down just in time for the unveiling of a new model, accepting Google’s (Nasdaq: GOOG ) Nexus 7 challenge, and shouting, "En garde, Big G!" Even as it crosses multi-touch swords with the search giant, it will need to keep looking over its shoulder, as Apple (Nasdaq: AAPL ) is almost assuredly watching from the sidelines, and waiting for the right moment to pounce and enter the 7-inch ring with its iPad Mini in October, hoping to blow all rivals out of the water in an aggressive move down-market.
Big G or the E-tail King?
It’s widely expected that Amazon will drop Texas Instruments (NYSE: TXN ) for the tablet’s processing brains, and that NVIDIA (Nasdaq: NVDA ) has scored that seat with its quad-core Tegra 3 chip -- the same one powering the Nexus 7. The display should get upgraded from the current 1024 x 600, and match the Nexus 7’s resolution of 1280 x 800. We may see a camera added, while the first-generation model lacked one. Unlike Apple’s supply chain, which is full of leaks, not much else is known about Amazon’s new device.
The tablet should also be thinner and lighter, and sounds like it will exactly match the Nexus 7 in all the important categories, including the processor, screen size, and resolution (and therefore also pixel density). I’d also expect pricing to stand pat at $199 and, in that case, the real choice that potential buyers are faced with is which platform and ecosystem they prefer.
The Nexus 7 carries Android 4.1 Jelly Bean, and the Google Play content storefront. Amazon should, again, use a heavily modified, or forked, version of Android, but it remains to be seen which version it might have tinkered with. Google definitely has an advantage in apps, but Amazon has an enormous selection of books and movies. Heavy users of Google services would prefer the Nexus 7’s tight integration, but Amazon Prime members will have plenty of benefits with Amazon devices.
Sit tight, investors. All will be known in just one week’s time.
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