Jay Yarow is one of several to sound the alarm over Pacific Crest's decision to cut its Kindle Fire estimates from 8 million to 6 million units for the holiday quarter and 12.5 million to 10.5 million for next year. Yarow immediately compares Kindle Fire estimates to much loftier expectations for Apple's ( AAPL) iPad. Curiously, Yarow uses Citi's numbers (23 million iPads this Q and 83 million for fiscal year 2013) to make his point. Should we really be looking to Citi for insight on Apple? But, listen, Yarow is a sane and logical guy, just like TheStreet's Chris Ciaccia. Chris and I disagree with one another on the notion of competition between Amazon and Apple as well as the former's lofty valuation. It's all good. I understand the AMZN bear case. I also understand why very few people have the guts to short the stock. However, I can't dig why so many otherwise intelligent colleagues fall hook, line and sinker for the Amazon versus Apple meme. Next to Howard Stern, Jeff Bezos might be the most misunderstood and, by some, disrespected guy in showbiz. After 13 years with a consistent message -- we're all about investing to seize long-term opportunity -- and a exponentially increasing stock price, how can any mere mortal have the nerve to criticize Bezos? Does anybody really think the guy is dumb enough to believe Amazon can sell more tablets than Apple? He's probably shocked to unload around 30% of Apple's total in a quarter. He's not that stupid so stop making this inane comparison. Numbers don't mean a thing anyway. We do not know how many Kindle Fires Amazon sells because Amazon doesn't tell us. If you trust analyst "estimates" after the week these cats had with AAPL I have a bridge in Brooklyn up for barter. Again, consider the source. Not only did Yarow use Citi for iPad estimates, he labeled Pacific Crest's take on Kindle sales a "devastating report." Pacific Crest -- the same firm that tripped over Citi to downgrade AAPL early in the week, slashing its price target from $645 to $565. We might get there by the end of the month!
Granted two different Pacific Crest analysts cover Apple and Amazon, but birds of a feather ... To make it all the more comical, Pacific Crest cites "weak demand" for lower Kindle Fire projections. Really. That's insightful. They take it a step further, though, by calling Kindle Fire "a highly seasonal item." Man, these guys are breaking some freaking ground this week. Did they all go on a Wall Street analyst retreat over the weekend or something? If so they came back refreshed, comfortably numb, blissfully ignorant or maybe just stoned. Let's get something straight. Amazon uses Kindle Fire as a loss leader. Place it in the context of how traditional retailers use loss leaders. Not everybody who walks through the door takes the bait and buys the loss leader. Loss leaders represent just one strategy retailers use to get people to buy stuff -- and more of it -- consistently. That's how Amazon rolls. It provides several points of entry: Kindle Fire and other possible loss leaders, digital content, Amazon Prime, Subscribe & Save. The list goes on. And it continues to grow. Amazon is perfectly content selling a modest number of Kindle Fires (either for a loss or right around breakeven; again, this is something we do not know because Amazon doesn't tell us). Each Kindle Fire it sells acts like an Amazon credit card. Amazon is equally as happy living in a world where a majority of mobile traffic takes place on iOS devices and most e-commerce occurs via Amazon.com platforms. All of this talk about how many Kindle Fires Amazon sells ... it's B.S. Amazon doesn't report that number, not because they're hiding something, but because it's absolutely irrelevant just like so many other talking points the bears latch onto. Follow @rocco_thestreet --Written by Rocco Pendola in Santa Monica, Calif.