The news is out for Amazon’s (AMZN) new Kindle Fire HD, and it is already changing the landscape for tablet devices. There will be a 7-inch and an 8.9-inch variant, running on Android 4.0. The entry-level device will be released in the U.S. for $159. The 8.9 inch device will sell for $299, well below the price of Apple’s 9.7” iPad. The 8.9” model will be shipped on November 20. The 7” model will be available on September 14th.
The tablet market is already crowded, but it is still dominated by Apple’s (AAPL) iPad both by profit margin and by market share. Google (GOOG) recently released the Nexus 7 that starts at $199. Apple might alter the tablet landscape once again if it announces a rumored iPad “mini.”
Competitive Pricing by Amazon
Amazon is selling the device for $40 less than Google’s Nexus 7, once again setting the standard for low-priced tablets. The entry-level device will come with a larger battery, a new processor, and twice as much RAM as its predecessor released last year. The device will also have a resolution of 1920×1200.
Kapitallists might shun Amazon.com stock: shares traded near a 52-week high and has a POP (Price of Profit) of over 70. According to Finviz.com, Amazon is trading at a P/E of over 300. Recall that Kapitall.com uses POP as an indicator to shows you how much you are paying for $1 of a company’s expected profit over the next year. Comparing Amazon to its closest tablet competitors, we get:
1. Research In Motion Limited (RIMM, Earnings, Analysts, Financials): Designs, manufactures, and markets wireless solutions for the worldwide mobile communications market. Market cap at $3.52B, most recent closing price at $6.72.
2. Google Inc. (GOOG, Earnings, Analysts, Financials): Google is the world’s most popular search engine. Market cap at $228.72B, most recent closing price at $699.40.
3. Apple Inc. (AAPL, Earnings, Analysts, Financials): Designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. Market cap at $633.94B, most recent closing price at $676.27.
Here is a chart of the three companies. Notice the rise in Amazon and Apple shares:
The above comparative valuation does not tell the whole story: Amazon is willing to operating at near-zero profit margins to gain market share. Amazon is offering a 4G LTE version of the device for $499. At a cost of $50 a year, users get 250MB of data monthly on AT&T. A data plan like that would normally cost $14.99 per month:
4. AT&T, Inc. (T, Earnings, Analysts, Financials): Provides telecommunication services to consumers, businesses, and other service providers worldwide. Market cap at $215.99B, most recent closing price at $37.44.
Amazon aims to make little or no profit from the hardware it sells. Amazon will make money from selling content. Other companies that sell content, such as music or video, include:
5. Pandora Media, Inc. (P, Earnings, Analysts, Financials): Operates as an Internet radio company in the United States. Market cap at $2.09B, most recent closing price at $12.57.
6. Netflix, Inc. (NFLX, Earnings, Analysts, Financials): Provides subscription based Internet services for TV shows and movies in the United States and internationally. Market cap at $3.15B, most recent closing price at $56.65.
Written by Chris Lau. To get a snapshot for each company, click on the company icon. To get more detailed fundamental information on any of the companies, open the snapshot and select “number cruncher.”
The author does not hold a position in any of the companies mentioned.
Use Kapitall’s Tools: Looking for ways to analyze this list?
Use this article snapshot as a launch pad (click here for help): Simply click on the links, and use Kapitall’s tab navigation to browse through the data…
Analyze These Ideas: Getting Started
- Read descriptions for all companies mentioned
- Access a performance overview for all stocks in the list
- Compare analyst ratings for the companies mentioned
- Compare analyst ratings to annual returns for stocks mentioned
- Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, Filings
- Research In Motion Limited (RIMM, Chart, Download SEC Filings)
- Google Inc. (GOOG, Chart, Download SEC Filings)
- Apple Inc. (AAPL, Chart, Download SEC Filings)
- AT&T, Inc. (T, Chart, Download SEC Filings)
- Pandora Media, Inc. (P, Chart, Download SEC Filings)
- Netflix, Inc. (NFLX, Chart, Download SEC Filings)
New to Kapitall?
1. New to the site? Click here to register for a free account, and gain access to more tools and data
2. Looking for more investing ideas like this? Click here to sign up for your free copy of Kapitall Weekly
3. Follow us on SeekingAlpha, Motley Fool, Nasdaq and Twitter
ABOUT KAPITALL WIRE
Kapitall Wire, which is not a broker/dealer, offers free cutting edge investing ideas, lively commentary and timely analysis of companies enhanced by interactive tools. And the Investing 101 section breaks complex concepts down to their basics, offering education to novices that doubles as a refresher course for more seasoned investors.
Kapitall Wire is a division of Kapitall Inc. Securities products and services are offered by Kapitall Generation, LLC, member FINRA/SIPC . Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.
Thank you for any other great article. The place else may just anyone get that type of info in such a perfect way of writing? I’ve a presentation subsequent week, and I’m on the search for such info.