What a Prediction!! With the Launch of Amazon’s Kindle Fire Tablet, Analyst Prognosticates That Amazon Will ‘1) launch a 10″ tablet priced below $300 in early 2012, and 2) purchase the streaming business of Netflix’

Sep 28, 2011  •  Post A Comment

Here’s quite a prediction we read about this afternoon at Barron’s website: "[Analyst] Collins Stewart’s Mayuresh Masurekar, who rates Amazon shares Neutral, this afternoon writes that the Fire could be a prelude to Amazon buying Netflix’s streaming operations:

‘We believe the tablet launch and the integration of Amazon’s ebooks, digital music and digital movie offerings with the tablet indicate accelerating pace of innovation at Amazon to stay ahead of the secular shift to digital format. We believe there is a high likelihood that Amazon will: 1) launch a 10″ tablet priced below $300 in early 2012, and 2) purchase the streaming business of Netflix.’ "

According to the Barron’s piece, another analyst, Fred Moran of The Benchmark Company–who has a "buy" rating on Amazon stock, writes "Reviewing [Amazon CEO Jeff] Bezos’s letter to customers about the devices, Moran remarks that Amazon is ‘subsidizing the cost’ of the Fire to lure customers to Amazon’s ‘Prime’ subscription service, which generates $79 per person per year for free shipping, movie streaming and other features.

“ ‘One of the most interesting and potentially impactful announcements was Kindle Fire customers receive a 30-day free trial of Amazon Prime,’ he writes. ‘This is a direct threat to Netflix. Anyone with a Kindle Fire and Amazon Prime may have little use for Netflix streaming. In addition, Amazon Prime members are more likely to shop first at Amazon, driving loyalty at the traditional eCommerce business.’ "

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