The popularity of electronic gadgets among kids has led
) to add certain features to its ebook reader. In addition to the
FreeTime feature, Amazon also added the FreeTime Unlimited
feature exclusively for kids to its Kindle Fire and Kindle Fire
A study by Nielsen revealed that 77.0% of children use tablets
to download games, 57.0% for educational purposes, 55.0% use it
as an entertainment device while traveling and 43.0% of children
use tablets to watch shows or movies. Thus, this segment of
the market offers sufficient opportunity for tablet makers that
Amazon obviously wants to tap.
FreeTime Unlimited is particularly aimed for
three-to-eight-year-old kids. This 'easy-to-use' feature offers
kids a broad range of content such as movies, books, apps and
games. They can also view shows from
Walt Disney Co.
), Sesame Street, Nickelodeon and DC Comics.
Amazon is charging $4.99 a month for a single subscription and
$9.99 monthly for multiple-child membership. As for its Prime
members, Amazon is charging $2.99 and $6.99, respectively, for
the multimedia service.
The tablet market is a very competitive one and Amazon cannot
afford to miss out on any opportunity to grow its still-small
customer base. Amazon's prime competitor
) is also not behind as it launched 20,000 educational apps in
the App Store with 1.5 million iPads being used in schools.
According to IDC, 27.8 million tablets were shipped worldwide
in the third quarter of fiscal 2012. Apple shipped 14.0 million
iPads and led the market with a 50.4% share. Samsung was
next in line with 18.4% market share. Amazon ranked third
as it shipped 2.5 million units for a 9.0% share.
Amazon's Kindle Fire has a long way to go. However, strategic
measures, including the addition and upgrading features, and the
targeting of key markets can generate higher revenues.
In this respect, it should be borne in mind that Amazon is
more concerned with the sale of digital goods (books, video and
so on) through its Kindle platform. Unlike the other tablet
makers, Amazon makes a good deal of money from non-Kindle
platforms as well. Its Kindle platform is a way for it to protect
these sales and the strategy has proved successful thus far.
Amazon's third quarter revenue was $13.81 billion, up 7.6%
sequentially and 26.9% from the year-ago quarter. This was better
than management expectations and more or less in line with the
Zacks Consensus Estimate. Excluding the unfavorable currency
impact, revenues increased 30.0% year over year.
Amazon, Apple and Disney all have a Zacks #3 Rank, which
implies a 'Hold' rating in the near term.
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