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Apple feels no heat from Kindle Fire

Apple CEO Tim Cook and CFO Peter Oppenheimer tell analyst that more Android fragmentation is good for the iPad.

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Eric Mack
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Apple says it's not sweating the Kindle Fire. CNET

Apple's not too concerned about competition from Amazon's upcoming Kindle Fire tablet--at least that's the message it wants investors to hear.

Barclays Group analyst Ben Reitzes spoke to Apple CEO Tim Cook and CFO Peter Oppenheimer about the threat the new $199 e-reader/tablet hybrid poses to their uber-dominant iPad. Apparently the two execs were as cool as ice cubes in a fire-proof box on the matter.

After the conversation, Reitzes wrote in a note to investors that the low price point will likely make some waves, but that the Android-based Kindle Fire also means more fragmentation in the tablet market--a phenomenon that has helped keep the iPad on top of the heap. Here's more of what Reitzes had to say:

While compatible with Android, the Apps work with Amazon products. The more fragmentation, the better, says Apple, since that could drive more consumers to the stable Apple platform. We believe that Apple will get more aggressive on price with the iPad eventually but not compromise the product quality and experience.

That remains to be seen. Amazon has so far contended that it's not looking to compete head-to-head with the iPad. The Kindle Fire's specs are significantly more spartan than those of Apple's slate, and--coupled with the disruptive price point--target a completely different type of tablet buyer (the iPad 2 starts at $499).

The Kindle Fire has sold at a brisk pace since going up for preorder on September 28; it ships November 15. So, if it's truly a different group of people that would buy the Kindle Fire (i.e. those who were never buying an iPad anyway) the real question may come to be: Does Apple want to revamp its approach and pricing to compete with Amazon? Or continue to rule the roost on the higher end?

(Via Boy Genius Report)