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Kindle Fire to Challenge Apple iPad

According to third-party reports available online, the growing sales of the Amazon Kindle Fire potentially took away revenue from sales of anywhere between 1 and 2 million units of the iPad in the fourth quarter of 2011.

The comparison between Kindle Fire and iPad 2 may seems a little unjustified in technical aspects, as the latter’s technical features are way ahead, but when it comes to market statistics Amazon Kindle Fire is challenging Apple’s tablet.

Despite not having as many high-end features as the iPad 2, Kindle Fire has been Amazon’s best-selling product since its release on the US market on November 2011. Kindle Fire’s UK release date was rumored to be set for January 2012.

2011 bore witness to the explosion of the tablet market, with almost 70 million units sold, meaning the market more than doubled its volume of sales compared to 2010. Volume figures are expected to record a compound annual growth rate (CAGR) of 80.4% to reach almost 200 million devices in 2014.

Apple’s brand remains the most popular amongst tablet users, holding more than 83% of the global sales volume. As of December 2011 Apple had sold more than 40 million iPads. This continued domination seems to be mainly influenced by brand awareness and customer satisfaction with the product – some 74% of iPad owners say they are “very satisfied” with their devices.

With one in five planned tablet buyers (22%) indicating they will purchase the Kindle Fire, multimedia-capable tablets are no longer the exclusive province of Apple. For the first time since the original iPad was launched, it faces direct competition from a second-tier tablet manufacturer, with Amazon claiming 20,000 Kindle Fire pre-orders a day. Additionally, according to estimates from RBC Capital, Fire could be making the e-commerce giant a cumulative lifetime operating income per unit of $136 in content sales.

Despite the fact they offer some similar applications, Apple’s iPad 2 and Amazon’s Kindle Fire devices are designed for different purposes. While Kindle Fire is primarily designed by Amazon to deliver Amazon content such as books, movies, and magazines to its users, the iPad is a full tablet PC. As the two are not fully substitutive, the purchasing decision comes down to price, size, mobile needs and photo/video capabilities.

The future will most likely see more tablets from Amazon, as the company tries to gain a greater share of the low end of the tablet market by focusing on product development. Amazon is believed to be developing 8.9-inch and 10-inch tablets, in addition to the 7-inch Kindle Fire.

Find this interesting. You may also like Amazon Case Study: Kindle Fire to Challenge Apple iPad or our top level reports on Amazon & Apple 

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