Is Amazon’s Kindle Fire HDX Not Selling Well?

With aggressive promotions/discounts, perhaps Amazon's vaunted Kindle Fire HDX isn't selling as well as planned.

Jan 22, 2014 at 12:00PM

Amazon's (NASDAQ:AMZN) rapid expansion into all corners of technology, from providing cloud services to developing state-of-the-art tablets, has been an impressive feat to watch. With a nod from Wall Street to continue to pursue its "profitless growth" strategy, the company has really managed to deliver on its vision to become, arguably, the world's most consumer-oriented name. That being said, while Amazon's new Kindle Fire HDX tablets are impressive, the real question is, are they selling?

The Kindle Fire HDX seems great
What Amazon has done with its Kindle Fire line of tablets is rather impressive. While these devices run Google's (NASDAQ:GOOGL) Android operating system, Amazon has actually taken Android and, essentially, built its own UI/ecosystem around it. While some consumers may prefer Amazon's "walled garden" and others may not, it's tough to argue that these devices do an impressive job of getting users hooked on Amazon, particularly given these tablets' aggressive price points.

Something that does Amazon further credit is the sheer quality of these devices. The Kindle Fire HDX models sport a top-of-the-line Qualcomm (NASDAQ:QCOM) Snapdragon 800 processor, extremely high-resolution, high-quality screens (either 1920x1200 or 2560x1600), plus a snappy and friendly user interface. All of this has been accomplished with fairly good build quality. Additionally, Amazon doesn't care about turning a profit on the actual device sales, so they're priced to move. But, is it working? 

Amazon goes to great lengths to move them
While Amazon is a well-loved brand, it's tough to ignore that Samsung and Apple really are the "top dogs" in the tablet market. Samsung is known for its sheer volume and scale, and Apple for its near complete dominance of the high-end tablet market with the Retina iPad Mini and the iPad Air.

Interestingly, Amazon is rather frequently putting these very nice Kindle Fire HDX tablets on sale, or offering exotic payment plans to push these products. For example, the cheaper HDX tablet was on $30 sale with a promo code until midnight on Jan. 21. Earlier in the holiday season, Amazon was offering a payment plan for the larger HDX that entailed four installments to be made over nine months. Isn't this a bit much for a $379 tablet designed largely to be a portal into the Amazon ecosystem?

Foolish takeaway
If you look at Amazon's best-sellers list for tablets, the various Kindle Fire tablets are selling extremely well, and there's no doubt that Amazon has a non-trivial portion of the tablet market. That being said, these tablets may not be selling as well as Amazon expected, given the very aggressive discounts and promotions that have already been offered for this fairly new device. These tablets are likely to sell in good quantity, which should mean good things for Amazon's silicon partner, Qualcomm, which is selling very high-end tablet chips. Whether Google really wins or not is a different story entirely, particularly as Amazon has gone to great lengths to make its version of Android truly proprietary.

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Ashraf Eassa has no position in any stocks mentioned. The Motley Fool recommends and Google. The Motley Fool owns shares of, Google, and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.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.

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