Can Amazon’s Kindle Fire beat Apple’s iPad in sales?
Kindle Fire vs iPad
After the announcement of Amazon’s Kindle Fire tablet, 3.9 million units were shipped to consumers in Q4 of 2011 reaching 14.3 percent of the global tablet pc market.
With this volume of sales Kindle Fire becomes the second best selling tablet right after the Apple’s iPad. During the same quarter Apple shipped 15.4 million iPads and saw its share of the tablet market fall to 57 percent from 64 percent a year earlier.
Kindle Fire’s success comes at the expense of Apple as well as Samsung, however. Samsung sold 2.1 million tablets for an 8 percent market share, down from 11 percent a year earlier. Despite the disruption, Kindle Fire’s success will contribute to an overall increase in tablet shipments of 7.7 percent during the quarter.
“Nearly two years after Apple rolled out the iPad, a competitor has finally developed an alternative which looks like it might have enough of Apple’s secret sauce to succeed”, said Rhoda Alexander, senior manager for tablet and monitor research for IHS. So, what is the secret of Amazon’s Kindle Fire success? It seems that “Amazon, with the Kindle Fire, has found the right combination of savvy pricing, astute marketing, accessible content and an appropriate business model, positioning the Kindle Fire to appeal to a brand-new set of media tablet buyers” said Alexander.
Apple and Samsung have some of the most loyal customers, so marketing to that segment is not going to bring a new entrant much. The Kindle Fire costs $199, less than half the price of the cheapest iPad. It has a seven-inch (17.78-centimeter) screen, smaller than the iPad’s 9.7 inches (24.6 centimeters), connects to the Web using Wi-Fi and is powered by Android, so the gaining 14 percent market share comes from new tablet consumers entering into the market at an affordable price not by directly challenging the competitor. Amazon can afford to drop the price of the device and take a loss on the hardware, but using Kindle to drive sales of e-books, applications and physical goods that comprise the majority of the company’s business while other competitors cannot.
All these circumstances could further increase the market share of the Kindle Fire tablet and getting it close to the iPad and even surpassing it. Anyway it is hard to believe that Apple would stand aside and watch it competitor’s rise. Rumors are already spreading that Apple will soon lunch a 7” tablet, known as the iPad Mini that could be priced at $200 directly challenging Kindle Fire.