By Luanne Teoh on 10-12-2011

Finally — after many months of speculation, Amazon announced the release of four Kindles on Septmeber 28th — three eReaders and one 7 inch tablet known as the Kindle Fire.

The Kindle Touch 3G and non-3G ($99 & $149) and Kindle Fire ($199) are only available on pre-order right now, scheduled to be released on November 15 and November 21 respectively.

Prior to its release, we wrote a blog post guessing that the Amazon Tablet will cost around $250 — but at whatever the price point, it will be the first serious contender to Apple’s iPad.

Amazon is expected to sell at least 3 million units of the Kindle Fire.

However, is this pre-order strategy that’s slated for release just before Thanksgiving and Black Friday shopping a way for Amazon to gauge just how many pre-orders it can chalk up to in order to gauge the demand?

According to cult of android it managed to secure an internal inventory management lookup report of the Kindle Fire pre-order and reported that:

“ These leaked shoots show that orders for Amazon’s Android-based tablet are racking up at an average rate of over 2,000 units per hour, or over 50,000 per day. In the five days since Amazon put the Kindle Fire up on their official site, over 250,000 tablets have been pre-ordered. If this level of consumer demand for the Kindle Fire continues, Amazon will have 2.5 million preorders for the device before it officially goes on sale on November 15th.”

Those numbers make the Kindle Fire’s launch likely to be the biggest tablet launch in history, beating both the iPad and iPad 2 in first month sales — we will just have to wait and see.

Click on image to enlarge

With the exception of a camera, Amazon has managed to create a tablet that rivals most other tablets in the market in terms of functionality — at a fraction of the cost. The only current cheaper tablet in the market is HP’s TouchPad at $99 which has been liquidated and is unclear if HP will be manufacturing more since its abandonment of the WebOS business.

While Amazon has presented itself as a serious contender to Apple with the unveiling of its product, pricing and content ecosystem — Amazon Kindles and Amazon.com is still very much a U.S. focused product and service.

In contrast, Apple iPads are available in 64 countries. According to Forrester, it is estimated that by the end of 2011, 50% of iPad sales will come from outside of the U.S.

Here is a quick comparison on the tablet prices in the U.S market currently for 16GB models:

It is estimated that it costs a total of $209.63 to produce each Kindle Fire. For each unit sold, Amazon loses $10.63. Even though the Kindle Fire may be a loss leader, the content ecosystem, value chain and seamless product buying experience will more than make up for the loss.

Whatever the case, Amazon has clearly set the Android-based tablet pricing standard from this point forward.

Image courtesy of cultofandroid.

About Luanne Teoh

Luanne is a senior correspondent for BizTechDay focused on Small Business Tech, Mobile and China based in San Francisco. In the last 17 years, she has helped launch start-ups and turned around failing operations. Her international work experience include both public and private corporations in Southeast Asia, Australia and North America. She has previously worked for Oracle Corporation, SonyBMG Music, Universal Music, Catcha Media and SOH Inc. Apart from a keen interest in technology, Luanne is also and avid explorer of the globe, cultures and people.

Leave a Reply