Amazon Kindle Fire Eats in to iPad Sales

Estimates indicate that Apple [AAPL] sold 2 million fewer iPads this past holiday season. It is estimated that almost 16 million units were to be shipped but figures hint at about 13 million were shipped. A lot of that shortfall is believed to caused by the Amazon Kindle Fire.

The Amazon Kindle Fire is in a different pricing category. Comparing the two devices the iPad sells for around $500 while the Kindle Fire sells for a couple of hundred dollars. This attracts an audience who are not in the market for a $500 tablet. It also attracts those who are buying a tablet as a gift for someone. You are more likely to send a Kindle Fire than you are an iPad to someone.

“These are customers that either would have purchased a $100 Kindle or no tablet at all. There are some customers who clearly wanted to gift a tablet this year, and it’s cheaper to gift a Fire than an iPad. That’s where the impact comes in.”

As with all estimates, we’ll never know the actual and specific numbers, but putting data together we can get a good idea of trends and see changes. The Kindle Fire from Amazon is the first Android tablet to really make a dent in the sales of the Apple iPad. We expect to see more from Amazon over the course of 2012 and perhaps even a larger tablet with a screen size to match the iPad. Rumours are also hinting at Apple releasing a smaller 7.X inch iPad although I personally think Apple will stick to a single model with the 9.7 inch screen which of course will come in WiFi/3G variants.

Source 1,2

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