Amazon’s iPad Killer Won’t Hunt – KFHD 8.9″ Gets a Price Cut

Kindle-Fire-HD-8[1]So it seems Amazon was a tad optimistic when they launched the larger Kindle Fire HD last fall. That 8.9" Android tablet , which Amazon was sure everyone would want to buy at $299, now costs only $269. What's even more surprising is that the 4g model also got a price cut. It now costs a mere $399, or $100 less than it did yesterday. Damn. For a 4 month old tablet that is a heck of a price cut.

Amazon is also making the Wifi model available in the UK, Germany, France, Italy, Spain and Japan today, but IMO the big news are the drastic price cuts.

And yes, both price cuts were extreme. 20% is obviously a big cut, but for the $299 Wifi model Amazon cut the price on the same day that they expanded availability. I think the expansion probably saved Amazon from having to cut the price even more.

What we are looking at today is the aftermath of Amazon's first big hardware mistake.

Amazon had enjoyed a year of success in selling the original Kindle Fire. They weren't the largest maker of Android tablets but they were enjoying great success in the US  market and ranked high just from that one market. And Amazon had enjoyed 5 years of seeing Kindles outsell other ereaders.

But then Amazon decided to take on the iPad, and that's where things went wrong. Suddenly Amazon's hardware wasn't as appealing as they expected, which makes some sense - and not just because the KFHD 8.9 wasn't the iPad.

If I had to guess, I would bet that Amazon misread the market behavior and the customer use cases. Amazon thought that they would be able to sell a limited function media tablet in the higher price ranges.

That made the 8.9" KFHD an odd duck. The thing is, all of the 10" iPad competitors are pretty hefty Android tablets in their own right. They can be used as media devices, but they can also be used as a work tool, education tablet, or be used for any number of jobs that the KFHD can't do very well.

$300/$500 is an awful lot of money for a device that is just a media tablet. If people are going to invest that much in one device it needs to do a lot more. Sure, a tablet that is designed just for consuming content can have some success at the 7" size and the lower price points, but once you hit $300 and $500 it's just not possible.

And when it comes to the limitations of the KFHD I am speaking from experience. I have a KFHD, and while I do use it as a work tool I think it does a terrible job. Switching from one app to another takes too long, the background notifications don't work, and it seems like the carousel takes joy in disappearing the apps I use the most.

Just about the only reason I keep using the KFHD is the Amazon Instant Video.  That is the one Amazon product that you can't find on any other Android tablet, and it is not enough to justify the $300 and $500 price tags.

And that means Amazon is either going to have to go looking for new price points or a new model. Today they've chosen to drastically drop the price, but who know what tomorrow brings.

About Nate Hoffelder (11389 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader: "I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

15 Comments on Amazon’s iPad Killer Won’t Hunt – KFHD 8.9″ Gets a Price Cut

  1. $30 isn’t a huge cut. OTOH, the $100 cut on the 4G model is a pretty good drop. It seems to indicate which model had the more sluggish sales, doesn’t it?

    • IMO 10% off is a sign that sales were sluggish. But you are probably correct in that sales of the 4g model were likely terrible.

      On the other hand Amazon did just expand the number of markets that could buy the Wifi model. They could be hoping that the extra sales will prevent them from having to drop the price another 10%.

  2. Glad I bought mine at full price. Oh wait…

    Anyway, I have both the 7″ & 8.9″ versions. I’ve found I really prefer the 7″ one. But with previous experience with a Motorola Zoom, I learned I don’t like fuller sized tablets. So, I hope the issues with the 8.9″ don’t trickle down & affect the popularity & availability of the 7″ model.

  3. $269 is the same price as the Nook HD+. Probably not a coincidence I think.
    Although without the special offers the Kindle is still more expensive than the Nook HD+ which has no advertising.

    • If the Nook had a camera, it would probably be more expensive.

      • If the KF had the same size/resolution screen as the NOOK HD+ it would be more expensive.

        • My eyesight isn’t exactly perfect so I have a difficult time telling the difference between an 8.9″ 1920 x 1200 resolution at 254 PPI and a 9.0″ 1920 x 1280 pixel resolution at 256 PPI. I need a stronger eyeglass prescription, I suppose.

  4. Not good news for B&N’s Nook expansion in Europe.
    Or will B&N open op the HD tablets and add Google Play to make their tablets more attractive?

  5. I’m happy with my HD8.9–it is exactly what I expected it to be–but at $399 I would’ve stretched for the 4G. Not that I really need it but it might come in handy on travel.
    Then again, we all knew a price cut was coming anyway.

    As to the $30 cut on the base model? It’s less than the $50 cuts they explored before.
    So I suspect they found sales a tad slow at $299 and a tad faster tham necessary at $240, so… $269.

  6. There’s actually a $70 price cut for the 32 GB Wi-Fi model. IIRC, it was $369 and it’s now $299.

    I’m also considering the 4G model for a travel gadget. $50 for a years worth of data is pretty decent…250 MB per month should be adequate for checking email.

    • I’ve found the Kindle email app to be adequate as a low-end email browser.
      And since Chrome works fine the browsing experience is about 90% PC grade…
      It’s a perfectly acceptable webpad + color ebook reader.
      And the screen rocks.

  7. Somebody around here // 13 March, 2013 at 4:54 pm // Reply

    Is there any precedent of a 4-month-old product getting a price drop? $30 may seem insignificant but if the 32GB has dropped $70, and the LTE $100…wow. That’s serious.

    Right now I can only think of products that were obviously struggling. Other than mega-duds like the Kin and Touchpad, I remember the 3DS got a massive price drop. But even that one was after six months. And for Amazon, certainly I can’t remember anything like this. Every time they dropped the price of a Kindle, it was because a new one was announced/incoming. And right now we’re six months away from any announcement.

    So yeah, the Kindle Fire must be doing pretty badly. At least the HD version.

    • Oh, there is plenty of precedent in all sorts of markets.
      Especially in the annual-refresh consumer product categories like TVs, audio/video accesories, etc.
      In this case, look to the generic PCs of the 90’s that would get quarterly refreshes and price drops. With android aspiring to PC-level ubiquity and generic support it may be that it will also get similar pricing/refresh curves.

      One further point to consider: according to the rumor mill we are within the next couple of months due for a Nexus 7.7, an 8in Samsung tablet (with unspecified pricing) and a Retina iPad mini. Amazon may be making a virtue out of necessity and reositioning the FireHD8.9. Amazon originally positioned the FireHD models as Premium tablets at less-than-premium pricing, which more-or-less worked with the 7in and 16GB HD8.9 but, despite seriously undercutting the comparable iPad, the LTE model at $499 was well outside the value-buy category.
      At $399 for the 32Gb LTE model it does fit and compares nicely to the Retina Mini and 32GB Nexus 10.

  8. This doesn’t seem that earth shattering to me. Isn’t the iPad also seeing reduced sales whereas the iPad Mini it seeing increasing sales? I think the truth of the matter is that Amazon had it close to right with a 7″ tablet as a media consumption device. It seems most people prefer the 7-8 inch size. So Steve Jobs might be wrong in regard to his statement that anything under the original iPad size was too small – it depends on the use case.

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