Aside from Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) is one of the most interesting and successful tech plays in the market. The company is considered to be the online Walmart (NYSE:WMT). Amazon.com sells millions of products across dozens of product categories on its web site. It also manufactures and sells the Kindle, an e-reader. Although the stock price has acted as a roller coaster recently, the holiday season could shoot shares higher.
Amazon is preparing to release the Kindle Fire, its answer to Apple’s iPad tablet. The Kindle Fire is available for pre-orders, and will be released on November 15. While it is too early to tell if the Kindle Fire can burn a hole in the iPad long-term, its low price point of $199 certainly gives it a fighting chance against the lowest priced iPad at $499. Hewlett-Packard (NYSE:HPQ) and Microsoft (NASDAQ:MSFT) previously tried to challenge Apple with tablets, but failed to dethrone the tech king. The Kindle Fire’s release date also provides holiday shoppers with a fresh product, and could act as a catalyst for Amazon’s stock price. As long time Wall St. Cheat Sheet readers know, a ‘Catalyst for a Stock’s Movement’ is the ‘C’ in our CHEAT SHEET investing framework.
Although this is Amazon’s (NASDAQ:AMZN) first venture into the tablet world, pre-orders are already cooking. On the first day of pre-orders, a third-party research firm estimates the company sold 95,000 units. In comparison, it is estimated that the original iPad sold 120,000 units in its first day. Furthermore, estimates place sales at 250,000 units for the Kindle Fire’s first week of pre-orders. JP Morgan (NYSE:JPM) predicts that Amazon will ship around 5 million units for the fourth quarter, which would make the Kindle Fire the best selling Android (NASDAQ:GOOG) tablet.
The strong early success of the Kindle Fire means the new product could have a huge positive effect at the next earnings release and act as a catalyst to send shares higher. Amazon’s (NASDAQ:AMZN) CEO Jeff Bezos, already made it clear that early sales had exceeded expectations, and the company would be increasing production to produce “millions more” of the Kindle Fire.
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