Technology News

Price of a new tablet computer is in the fire raises questions about Amazon.com Inc., the ability to keep pace with demand, and the device is already on the edge margins.

Amazon CEO Jeff Bezos has proven to be a millionaire fire Wednesday at a price lower than expected at $ 199.

Bezos said that Amazon will make "millions" and the pill, no deeper. However, he urged customers to advance the device at first.

"When Bezos joked that people should get their pre-orders quick, it was not just a selling point," said Brian Blair, an analyst at Wedge Partners. "It was this warning will sell."

When the Kindle first came out in 2007, Amazon has not done enough, and e-reader sold out in less than a week. This meant the company missed the sale and received a device to lower the hands of customers' limiting the rapid adoption.

"I hope they learned their lesson from the last time," said Vinita Jakhanwal, iSuppli analyst at IHS, which follows the supply chain of electronic components.

Amazon spokesman did not respond to a request for comment Thursday.

Amazon has aligned 4-5000000 fire screens in the fourth quarter, which is a "significant" amount, Jakhanwal added.

However, the technology used to screen for at least four a year and have already been produced in large quantities, which reduces the risk of supply shortages, Jakhanwal said.

One of the components have been rare in the first half of 2011, the 10-inch screen, mainly because of the IPAD, Bradley Gastwirth according to technology research company strategy ABR investment.

"This is probably one of the main reasons that Amazon started with 7-inch form factor," he said.

Specialized components still others may be in short supply and that could limit the number of fire can be done quickly, Jakhanwal said.

Other parts of the unknown, according to Blair Wedge is. But he expects to re-run of 2007 selling the fire quickly.

Colin Sebastian, an analyst with RW Baird, Amazon had the same tablet sales forecast on Wednesday, is concerned about potential supply shortages of things. 2000000-3000000 expects unit sales this year and next year 4-6000000.

Amazon has better data on consumer demand and the supply chain it did in 2007, said Scott Devitt, an analyst at Morgan Stanley.

"But price point of $ 199 could stimulate greater demand, if supply is possible, and something to consider," he added.

Part of the success of Apple Inc. with IPAD and other products has been driven by its tight control over its supply chain that ensured she got enough pieces before its rivals.

"Apple's supply chain, manufacturing and distribution capabilities to provide a competitive advantage for Amazon, which can be difficult to produce more than a few million fires Kindle for Christmas," said Gene Munster, an analyst PiperJaffray.

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$ 199 Munster of fire and other stakeholders about the profit margins on Amazon as well.

Amazon still compete aggressively on price, often pick up losses when it enters new markets. The company is now branching into several new areas and its profits have suffered.

Apple enjoys gross margins of 30 percent on the iPad. This is partly because the company offers digital content at a lower cost to encourage the purchase of such equipment. However, Munster estimated that Amazon will probably lose about $ 50 on each Kindle fire seller.

Anthony Clement, an analyst at Barclays Capital, expects Amazon's pro forma operating margin of 3.2 percent in the fourth quarter, down 160 basis points more than a year earlier.

However, Amazon hopes to make up any losses on the fire Kindle by additional purchases of other company's products and services that users of the device.

Morgan Stanley Devitt cites the example of the ebooks. Lighting the fire can increase purchases of digital books, which accelerates the disappearance of physical libraries, he said.

In fact "lead to an industry with fewer traders and therefore higher margins in the long term," said Devitt.