Amazon increases Kindle Fire orders
Amazon has recently increased its Kindle Fire orders to more than five million units before the end of 2011 as pre-orders for the machine remain strong, according to sources from upstream component suppliers. — Amazon already raised its order volume once …
Context & Ripple Effects
Amazon's Fire ramp has been climbing all autumn: a market research firm counted 95,000 pre-orders on day one in early October, and by October 7 AllThingsD was already reporting that Kindle Fire orders kept climbing. This latest report, sourced from upstream component suppliers rather than Amazon itself, says the company has raised its order volume a second time — past five million units for calendar 2011.
Every number here is unconfirmed supplier chatter, not an Amazon statement, which is typical for DigiTimes' channel reporting. But the direction matters more than the precision: at the Fire's aggressive price point, Amazon is committing to hardware volumes that treat the tablet as a loss-leader for its retail and media business rather than a profit center.
First-order effects
- Upstream component suppliers win immediately — a five-million-unit fourth-quarter commitment locks in build plans and component orders across the Fire's supply chain ahead of the holiday quarter.
- Amazon accepts the inventory risk on unconfirmed demand signals; if pre-order strength softens after launch, it carries the excess, and if it holds, rivals face stockouts.
Second-order effects
- Competing tablet makers are forced to respond on price rather than specs, since the Fire's sub-$200 positioning resets what consumers expect a media tablet to cost going into the holidays.
- Retail channel dynamics shift toward Amazon's favor: shelf space and holiday marketing attention flow to whichever tablet can actually ship in volume, pressuring rivals' Q4 sell-through.
Third-order effects
- If the pattern holds, tablets consolidate into a two-tier market — premium devices priced against the iPad and commodity media tablets sold near cost to feed content and commerce ecosystems — squeezing mid-priced hardware makers with no services business underneath.
- Supplier-sourced order tracking becomes the de facto early indicator for consumer electronics demand, since companies like Amazon disclose little and analysts increasingly read the component chain instead.
The trend: Consumer tablets are splitting into ecosystem-anchored hardware sold near cost versus standalone devices, with Amazon's order cadence signaling how fast the low end of that split is forming.