The Kindle Fire has caught a great deal of attention on the tablet computer market despite only being in release for a few weeks. This success is leading some to predict that the device is bound to cut deeply into sales of other tablets using the Android operating system, accounting for up half of those devices sold.
According to CNN Money, Robert Cihra, a member of financial firm Evercore Partners, made this claim in a December 5 note to his firm's clients. He attributes the veracity of this prediction to Amazon's ability to manufacture the Kindle Fire at cost – it loses approximately $2 for every unit sold – while profiting strictly off of e-commerce, tablet computer accessories and other services facilitated by the device.
The news source reports that with this business model, Amazon may be primed to significantly impact the business of companies making Android-powered tablets in the hopes of profiting directly from those devices. However, Cihra's research also stated that while the Kindle may viably compete with the iPad due to its cost, it is not likely to overtake Apple in the tablet market.
Regarding the price of the Kindle Fire, Amazon CEO Jeff Bezos told the Telegraph, "We're a company very accustomed to operating at low margins. We grew up that way."