On November 14th, a day ahead of schedule, Amazon released the greatly hyped Kindle Fire – a tablet that some dubbed a potential “iPad-Killer”, but for the most part was designed to support the integration of digital content from Amazon’s broad range of services. To investigate whether the Fire would be able to live up to the hype surrounding its release, Chitika Insights conducted a research study measuring the overall online activity of Amazon’s latest Kindle product. Despite the rumors abound projecting the Fire to outsell all other tablets, potentially even the iPad, as the reviews and data begin to trickle in, an alternate story may be emerging.

To quantify the level of online activity of the Kindle Fire, Chitika Insights ran an impression based study to monitor web browsing behavior of Kindle Fire users dating from November 14th until November 30th, a time period covering over two weeks and hundreds of over one billion ad impressions. This was done by constructing an index with a maximum value of one hundred to represent the level of online activity seen for the Kindle Fire.

As can be seen above, although the Kindle Fire web traffic experienced modest growth in first week or so following its launch, its usage truly begins to ramp sharply on November 26th, hitting its highest point in our sample. However, this rapid spike of growth is short-lived as Kindle Fire activity appears to enter a period of decline on the 26th, falling more than 85% from its November 26th peak. It would seem that although the Kindle was able to attract a significant user base given its mid-range price point of $200, once the allure of the device wore off, user activity fell as well.

The Kindle Fire was supposed to be a sleek, high functionality tablet – a purported “iPad killer.” What happened?

Notwithstanding an appealing visual storefront for books, movies, apps, and an extremely attractive price point, across the Chitika network, Kindle Fire web usage seems to have fallen. There are several major factors which may explain the potential lack of interest:

  • In an effort to develop a unique OS and user experience, Amazon failed to make the device truly accessible for all users (e.g. heavily curated app selection, User Interface problems, Silk security issues)
  • Hardware limits the functionality of the device (small hard-drive, no 3G support, lack of camera or physical volume control, etc.)
  • While the $200 price point is less than half as expensive as the iPad, its limited feature set might not provide consumers enough bang-for-buck value

The Kindle Fire certainly is a step in the right direction for Amazon and one of their most impressive tablets to date. It offers significant benefit at a relatively low cost, and if you’re willing to pay the extra mile, you can gain access to services such as Amazon’s Digital Content platform. However, if you are expecting a full-fledged tablet, you may be disappointed with functionality, given the Kindle Fire is more of an E-reader+.

With the current level of competitiveness in the tablet market, currently dominated by the iPad (enjoying a 68% market share), it appears that Amazon has a long way to go in terms of offering the complete and viable tablet experience. Will this usage downtick prove to be simply a small bump in the road for the Fire, or will it be the beginning of a longer and more pronounced decline? With what we’ve seen so far, it would seem that, while Amazon may be able to attract temporary attention by offering a shiny device at a mid-level price point, in order for Amazon to truly compete in the Tablet in the future, they may want to place greater emphasis on producing a product that falls in step with consumer demand on points other than an attractive price point.

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