The Low price of the Kindle Fire sparks questions over adequate supply, pre-orders soar

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The ultra-low prices of the recently launched Amazon Kindle tablet have raised questions on whether the company will be able to maintain the availability of the device in keeping with the high demand on its already minute margins of profit. The Kindle Fire was unveiled by Amazon’s CEO Jeff Bezos at a price of $199 which was much lower than most had expected.  The Kindle Fire is available for pre-order for $199.

According to Bezos, the internet vendor is manufacturing millions of units of the tablet; however he didn’t specify any more, only urging the prospective buyers to pre-order the device as soon as possible. An analyst named Brian Blair said that the advice of Bezos to the users to pre-book the device wasn’t just a sales gimmick, but that it is actually quite probable that the device will sell out.

This was just what happened when Amazon first launched the Kindle in 2007, as the company hadn’t made enough units of the eBook reader, the Kindle sold out in under a week, this lead to the company losing out on a large number of potential sales as more availability would have gotten the device into more hands at that time, thus limiting the scope of quick adopters.

Vinita Jakhanwal who is an analyst with HIS iSuppli hoped that the internet shopping giant has learnt its lesson from that incident. A spokeswoman for Amazon did not comment when she was approached for an opinion this Thursday. Jakhanwal added that Amazon has reportedly ordered around 4 to 5 million screens for the Kindle Fire during the fourth quarter which is a very significant amount according to her.

The technology that Amazon uses for the displays of the Fire is quite common as it has been around for more than a year and many other tablet manufacturers already use it for their devices, thus it is unlikely that Amazon will face a supply shortage for displays. This is unlike the 10 inch touchscreen displays which were severely short in supply during the first half of this year due to the extraordinary high production and sales volumes of the Apple iPad during that time.

Bradley Gastwirth from ABR Investment Strategy said that this is one of the biggest reasons why Amazon could have decided to go with a 7inch display for its tablet. However, the inadequate supply of any of the tablet’s other components could still limit the manufacturing of the Kindle Fire.

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