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Amazon Kindle Fire preorders strong, says analyst

Amazon's Kindle Fire tablet continues to see brisk preorders, according to a market research firm, and could approach the iPad in initial sales.

Amazon's $199 Kindle Fire may rival the iPad 2 in initial sales.
Amazon's $199 Kindle Fire may rival the iPad 2 in initial sales. Amazon

Amazon's Kindle Fire continues to rack up impressive preorders, according to a marketing research firm that's been tracking sales of the imminent Amazon tablet.

Direct sales through Amazon are now projected at 500,000 from September 28 through October 28, according to Carter Nicholas, CEO of eDataSource.

But Nicholas is quick to admit that isn't the whole picture. "I'm going to assume that for every unit sold on there's also a unit being sold to a Best Buy or Staples. So maybe 1 million to 1.5 million," he said in a phone interview Thursday.

Nichols said it's not unreasonable to think that Amazon would stipulate to a major reseller like Best Buy that if it is going to carry the Kindle Fire, it would have to order a large number of units, though these would not technically be preorders directly from consumers.

Amazon announced on November 8 that the new Kindle family would be available at more than 16,000 retail locations in the U.S. on November 15, including Best Buy, Target, Walmart, Staples, Sam's Club, RadioShack, and Office Depot.

"The Kindle Fire and other new products in the Kindle family will be some of the hottest gifts this holiday season," Wendy Fritz, senior vice president of Computing at Best Buy, said in a statement on November 8.

And Nicholas said the $199 price means more multiple orders. "I think it resets the bar. In our data we're seeing people ordering two and three of them. That's not the majority of people, but it is showing up," he said.

And sales will jump again when the device goes on sale November 15. "As soon as people can physically touch the Kindle Fire, sales are going to increase dramatically. The holiday effect is going to be the biggest," Nicholas said.

Ashok Kumar of Rodman & Renshaw said earlier in the month that Amazon could sell as many as 5 million units in the current quarter "because they have received record preorders." But in a research note this week, he restated that as "upwards of 4 million."

How does this compare with the iPad 2? Apple sold 1 million iPad 2 devices in the first weekend of sales, an estimated 2.4 million iPad 2s in the first month of sales, and 9.25 million iPads during the first quarter that the iPad 2 was available.

And in the current quarter, Apple is projected to sell between 12 million and 13 million units, according to Kumar.

The Kindle Fire is considered the first viable threat to the iPad because it will cost $300 less than Apple's least expensive model, yet offer many of the attributes of a higher-end tablet. These would include a dual-core processor, a fast Web browser, a relatively high-quality display, and access to lots of Amazon content.

General-purpose Android tablets, like the Motorola Xoom and the Samsung Galaxy Tab, have not fared nearly as well as the iPad. Motorola, for instance, shipped only 100,000 Xoom tablets in the most recent reported quarter.