Kindle Fire heat may be cooling passion for iPads

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The general wisdom has been that the Kindle Fire, Amazon’s new tablet, won’t compete head-to-head against the more expensive and feature-rich iPad. But a new survey suggests that interest in the Kindle Fire could bite into sales of the iPad.

A new ChangeWave survey of 2,600 early adopters found that 5 percent had pre-ordered or were very likely to buy a Kindle Fire. That’s compared to 4 percent of the same group who said they were very likely to buy the original iPad. Now, of course, the iPad went on to huge sales. But initially, consumers were more likely to be cautious because the iPad was the first real standout in the media tablet category, and came with a $499 starting price point. The Kindle Fire can sell itself as a cheaper, smaller and more media-focused version of the iPad, which is easy to grasp for many consumers.

But the ChangeWave survey also found that 26 percent of those people intent on buying a Kindle Fire are also planning on delaying or holding off on the purchase of an iPad. That should be more of a concern for Apple, because these are people who may have been poised to buy an iPad but are now content to see if a Kindle Fire will satisfy them.

Of course, the long-term success of the Fire depends on more than early buzz. RBC’s analyst Mike Abramsky, who shared the ChangeWave survey results in a note and is still bullish on the iPad’s prospects, said the Amazon tablet’s long-term prospects will depend on consumer and reviewer reactions to the Fire. So obviously, it will have to prove itself in the market, and consumers may take a look and then decide that the iPad is in fact what they want after all.

But the introduction of the Kindle Fire, and I would argue, the Nook Tablet , is giving the tablet market a little pause. Now, we have two pretty solid, low-priced alternatives to the iPad. Most people who want an iPad will still go that route, but for more price-conscious consumers, these new devices are going to catch some of their attention. With the Kindle Fire expected to sell 5 million units this year and pre-orders going well, we’re finally seeing some real competition emerging in the tablet market. But again, the proof is in the pudding, and the Fire and the Nook Tablet will have to justify themselves to consumers, low prices notwithstanding. If they can do that, this early buzz could open up the tablet market and prompt Apple to think about how it goes cheaper or smaller with upcoming devices.

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