Timing isn't everything, but it's a lot. JP Morgan concluded after a meeting with Apple CEO Tim Cook that the success of Amazon's Kindle Fire could help iPad sales in the long run, because Amazon's low-priced tablet could serve as an inexpensive gateway drug leading consumers to want the good stuff.
(By "Kindle Fire" here we'll probably have to read "Kindle Fire and Nook Tablet," which are similar products at similar prices, and look to be meeting with similar success. I'll focus on the Kindle Fire in this argument, but imagine the Nook Tablet dutifully toddling along behind.)
Cook is right, but timing matters a lot here, especially considering Americans' straitened wallets. The Kindle Fire is a good-enough tablet at an impulse-buy price. It's a terrific gift for people who don't quite know if they want a tablet, for people who want a one-handed, portable tablet, or people who know they want a tablet, but don't want one with $500 worth of desire.
Yeah, yeah, the Kindle Fire took a beating today from "usability expert" Jakob Nielsen, who used it as a proxy to curse and damn all 7-inch tablets. For what it's worth, I disagree passionately, and I've used a bunch of 7-inch tablets—in fact, I prefer 7-inch tablets to 10-inch tablets much of the time.
Nielsen's claim that a 7-incher feels heavier than a 10-inch tablet is downright insane, and his issues with Web browsing seem to be about familiarity: of course if you're used to a 10-inch device, pages will look small on a 7-inch device. Once you get used to the 7-inch form factor, you zoom in and out of elements you want to view, just like on a phone.
In any case, Amazon is selling a lot of tablets. IHS iSuppli estimates it'll sell almost four million by the end of this year. New Kindle Fire owners will pretty quickly cotton on to its strengths and failings. It's good for Web browsing, great for watching Amazon videos, not so good for content creation, and it doesn't have enough apps. Maybe they'll start wanting an iPad as well.
An iPad Too Soon?
But here's Apple's problem; iPads typically come out in February or March. The Kindle Fire and Nook Tablet just came out. For the Kindle Fire to actually encourage iPad sales, as opposed to merely not interfering, Kindle Fire owners would have to not only get sick of their tablets within the next three months, they'd have to be willing to throw $500 very quickly after their $200 (or $250, in the case of that Nook.)
In the middle of a grinding, ongoing consumer recession, I don't see that happening. This won't necessarily dent iPad sales, as the U.S. tablet market is still in its infancy and the Kindle Fire is hitting a crowd of consumers who wouldn't have spent $500 on a tablet anyway. But it won't enhance them.
The real Kindle-encouraged iPad sales boost would then come with the iPad 4, or even with the iPad 3 during the 2012 holidays. But forecasts get cloudy that far out, because of the possibility that Android tablets might shape up. Think about how quickly Android phones ramped up from looking weak in 2009 to dominating the market in 2010.
If Google can finally get a grip on its tablet app discovery problems, we might see a very different market by the end of 2012—one where high-powered tablets like Asus's eee Pad Transformer Prime offer even more of a challenge to the iPad than the inexpensive Kindle Fire does.