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Tuesday December 6, 2011 11:00 am

Apple believes Kindle Fire could help iPad sales

Posted by Andru Edwards Categories:

Kindle Fire

Apple is not overly concerned about the impact of the Kindle Fire on the iPad, and says the Amazon tablet might actually help iPad sales in the long run, according to a new report.

Analysts at JP Morgan met with Apple CEO Tim Cook and chief financial officer Peter Oppenheimer on Friday to discuss the long-term impact of Apple products, and when it comes to competitors like the Kindle Fire, "we believe that Apple is not too concerned about the low-priced entrants," the firm said in a note to investors.

If anything, the Kindle Fire, Nook Tablet, and other low-priced options might help introduce consumers to the tablet market, prompting them to eventually upgrade to more feature-rich devices like the iPad, the report said.

"In other words, we think Apple is not seeing much pressure from lower-price tablets, yet," JP Morgan wrote.

Amazon said recently that it had its best-ever sales for Kindle devices on Black Friday, with the Kindle Fire leading the pack. The company did not release exact sales figures, but earlier this month, an analyst said Amazon took 500,000 pre-orders for the Fire. In October, Apple said it had sold more than 40 million iPads since it first debuted last year.

"It has been our view that low-priced, reduced feature-set entrants, such as the Kindle Fire, are soap box derby devices stuck between a tablet and e-reader," JP Morgan concluded. "Meaning, we are not concerned much about competitive pressures until the second or third generations."

Data from IHS iSuppli last week found that the Kindle Fire was the number-two tablet on the market, but has a ways to go before it catches up to the iPad.

On the iPhone, meanwhile, JP Morgan said there is no indication that sales are tapering off. Cook and Oppenheimer said there are "ongoing supply constraints related to the iPhone, which did not exist prior to the iPhone 4S launch, [an indicator] of the product's success."

The free iPhone 3GS, meanwhile, "is not the top seller in the iPhone family, according to management, [but] it is introducing Apple's products to a wider audience of customers."

For more, see our Kindle Fire review and the Amazon Kindle Fire vs. B&N Nook Tablet vs. Nook Color: Spec Showdown.

This article, written by Chloe Albanesius, originally appeared on PCMag.com and is republished on Gear Live with the permission of Ziff Davis, Inc.

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