Kindle Fire sales have cannibalised iPad

Amazon is munching on Apple's tablet market share, analyst firm revises iPad estimates
Adam Smith

January 4, 2012
Kindle Fire

We’ve all heard the boasts from Amazon about how well its Kindle devices have sold over the Christmas period, led by the new 7 inch tablet the Kindle Fire.

Well analysts are now chiming in with their estimations of how Amazon’s new slate has affected the tablet market, in particular regarding the iPad.

In fact Morgan Keenan, an investment research outfit, has just cut its iPad shipment numbers for Apple’s final quarter of last year.

The firm is now estimating that Apple will ship 13 million units of its tablet in the quarter running up to the end of December. That’s considerably down from the previous guess of 16 million.

However, the iPad still represents 21% of Apple’s revenue in the quarter, which is up from 17% the previous year – although down from 24% in the previous quarter.

This is slightly alarming news for Apple, with Morgan Keenan estimating the Kindle Fire has sold 4 to 5 million units through. Considering the Fire has only been available for half of the final quarter of 2011, that’s pretty impressive.

The research firm reckons that the Fire has cannibalised between 1 and 2 million iPad sales this Christmas, which accounts for much of the drop in its shipment estimations.

That certainly makes a further case for Apple to be looking at a budget end tablet. Whether that will be a mini-iPad seems rather unlikely, particularly given the company’s previous stance on 7 inch tablets and their lack of suitability for a full app experience.

Bringing out the iPad 3 with its new super-resolution display and then keeping the iPad 2 on, dropping the price as a budget alternative, seems a more likely course of action.

There was better news on the iPhone front for Apple, however, with Morgan Keenan raising its shipment estimate for the smartphone in the last quarter from 27 to 29 million units.

It’s certainly clear that the iPhone 4S has been a big success, despite a somewhat lukewarm reception from the press in terms of the changes it introduced (or lack of them).

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