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Amazon Upgrades Low-Cost Fire Tablets, Cuts Fire HD 8 Price


Amazon.com, Inc. AMZN can no longer be labeled as just a retail giant. In the last few years, the company has diversified its offerings by entering into markets with significant growth potential.

Amazon has launched its own brand of electronic devices, entered the video-streaming market and formed an extremely successful web services platform. Not to forget, the company is also a frontrunner in the growing personal assistant market.

So, what are its latest hardware offerings? New upgrades to its Fire tablets namely Fire 7 and Fire HD 8. It also offers Kids Editions for both the tablets.

Coming to the price performance, shares of Amazon underperformed the Zacks categorized Electronic Commerce industry on a year-to-date basis. While the industry gained 46.9%, the stock returned 35.5%.


Fire 7 will now feature an improved 7-inch 1024×600 IPS display with a slimmer design and power-efficiency improvements. It will have better screen contrast and additional color options. The most lucrative upgrade is the extra one-hour battery life. However, there will be no price cut and Fire 7 will continue to be available for $50.

On the contrary, the Fire HD 8, which has an eight-inch display, is effectively identical to its previous model. However, on the cost front, the company slashed the price of Fire HD 8 from $90 to $80 (£80) and from $120 to $100 (£100) for the 16 GB and 32 GB version, respectively.

On the software front, both the tablets are equipped with Alexa voice-assistant support, making it more appealing for the buyers.

The shipping for both the tablets is expected to begin on June 7.

Additionally, Amazon announced Kids Edition models for both the tablets. On the hardware front, they will be same as the previous models. However, the new models will now come with a protective case. Moreover, Amazon is giving a two-year warranty, wherein it will offer replacement for damaged tablets, regardless of the cause.

Slowing Tablet Market

Per a recent report from IDC, consumer spending on tablets has been declining for the last few years. IDC reported that the worldwide tablet shipments declined 8.5% in the first quarter of 2017. This becomes the 10th straight quarterly decline for tablets.

Though Amazon does not report detailed sales figures, IDC estimated that Amazon sold 2.2 million tablets in the first quarter, down 1.8% and accounts for a 6% market share. Apple AAPL led the tablet market with a 24.6% share in first quarter, despite a 13% drop in sales.

However, Kevin Keith, Amazon's general manager for Fire Tablets, said that Amazon saw "double-digit growth" in its tablet sales in 2016. He also added that the company also saw double-digit growth for its Fire Kids Edition tablet in 2016.

The company expects these new upgrades to further expand its share in the tablet market.

Bottom Line

Amazon is one of the leading players in the extremely fast-growing retail e-commerce market. While the strong growth prospects are making the market more competitive by the day, Amazon continues to maintain and even increase its share on the back of its consistent and reliable services. Amazon’s scale of offerings, its broad reach and platform approach are integral to its success.

While Amazon has not been too successful with its line of “Fire” electronics in the past, the company’s Fire tablets have an edge when it comes to the price.

Even if Amazon does not make big money from tablets, it intends to increase the number of customers buying both physical and digital products from the company, such as movies, music, games and apps, thus increasing its revenues.


Amazon carries a Zacks Rank #3 (Hold). Other better-ranked stocks in the industry are Mercadolibre, Inc. MELI and PetMed Express, Inc. PETS, each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Mercadolibre, Inc. delivered a positive earnings surprise of 26.74%, on average, in the trailing four quarters.

PetMed Express, Inc. delivered a positive earnings surprise of 9.32%, on average, in the trailing four quarters.

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