Kindle Fire: Apple Says It Will Cause More Fragmentation

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Amazon’s first tablet, the Kindle Fire, is an Android device that looks nothing like other Android tablets. Amazon took an older Android version from Google, stripped it down and build on it a new mobile platform.

The Kindle Fire is appealing to potential tablet buyers not only because of its $199 price tag but also because of Amazon’s impressive tablet content offering. The company will offer buyers access to movies on-demand, music, eBooks and applications. Similarly, Apple offers the same tablet experience to iPad buyers who are able to access the same kind of content streams on the iOS device.

And it looks like Apple likes the Kindle Fire, or better said, it can appreciate what it will do to the Android platform. Since Amazon’s tablet uses a new custom Android OS version, the Fire adds another level of fragmentation to the Android ecosystem, which is something Apple can benefit from. At least that’s what CEO Tim Cook and CFO Peter Oppenheimer told Barclays analyst Ben Reitzes:

While the pricing at $199 looks disruptive for what seems to be the iPad’s most important rising challenge, the Amazon Fire – it is important to note that it could fuel further fragmentation in the tablet market—given it represents yet another platform. 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.

Sure, the Kindle Fire, expected to sell up to 5 million units this year, will surely steal some customers from Apple, but it may be a while until the iPad will start losing considerable market share to Android rivals.

Are you buying a Kindle Fire instead of an iPad or instead of a different Android tablet?