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Old 02-16-2012, 02:58 PM   #1
Jessica Lares
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Amazon Steals 14% Tablet Market Share In Q4, Apple Share Drops To 57%

http://techcrunch.com/2012/02/16/ama...e-drops-to-57/

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According to the research firm, Apple’s market share in the tablet arena dropped from 64 percent in Q3 to 57 percent in Q4, with Amazon nabbing a 14 percent share.

It would seem as though that $200 price tag on the Kindle Fire was temptation enough for tablet buyers, but according to IHS research Apple customers were more swayed away from the iPad by the iPhone 4S than they were the Fire.
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Old 02-16-2012, 03:30 PM   #2
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One problem with headlines like this is that obscure as much as they enlighten. Market "share" doesn't drive a company's revenue; total sales do. Amazon is certainly to be congratulated for the success of the KF and 4 million sales in a quarter is nothing to dismiss. But the overall tablet market expanded tremendously in the last quarter of 2011 and Apple sold 15 million iPads in that quarter even while their market share dropped.

In short, this isn't a game where one firm "wins" and another "loses." Amazon has been extremely successful with the KF. Apple continues to be spectacularly successful with the iPad.

A more interesting comparison, I think are the sales figures for KF versus the Nook Tablet. While Amazon was moving almost 4 million units, B&N sold almost 2 million NT's. That's very good news (and at least to me somewhat surprising) for Barnes and Noble considering that their brick and mortar business is in a deep black hole.
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Old 02-16-2012, 04:22 PM   #3
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Keep in mind that the Kindle Fire is a loss leader, whereas the iPad is a high-margin money maker by comparison. It's easy to take markesthare with a loss leader, but harder to convert that into profit through add-on sales (though it's definitely possible).
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Old 02-16-2012, 05:00 PM   #4
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Quote:
Originally Posted by scrapking View Post
Keep in mind that the Kindle Fire is a loss leader, whereas the iPad is a high-margin money maker by comparison. It's easy to take markesthare with a loss leader, but harder to convert that into profit through add-on sales (though it's definitely possible).

That's a good point. I read somewhere recently that although the sales of the iphone represent 35% of the market, apple gets 80% of the profit generated by smartphones.
I don't know about your last sentence, though - the whole point of amazon selling the Fire as a loss leader is to generate sale of add-on amazon content.

All I know is - I'm glad they're selling a lot of them so that it's bound to get decent support from developers.
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Old 02-16-2012, 05:49 PM   #5
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I don't know about your last sentence, though - the whole point of amazon selling the Fire as a loss leader is to generate sale of add-on amazon content.
What don't you know about that sentence? I simply say it's hard to do, but that it's not impossible. I don't see any contradiction there.
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Old 02-16-2012, 11:41 PM   #6
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Quote:
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Keep in mind that the Kindle Fire is a loss leader, whereas the iPad is a high-margin money maker by comparison. It's easy to take markesthare with a loss leader, but harder to convert that into profit through add-on sales (though it's definitely possible).
Can't remember where I saw it here, but someone had this to say about the Fire and iPad.

Fire - hardware is used to promote sale of content (apps, movies, music, etc.)

iPad - iTunes (movies, music, apps, etc.) is used to generate hardware sales.
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Old 02-17-2012, 01:13 AM   #7
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What don't you know about that sentence? I simply say it's hard to do, but that it's not impossible. I don't see any contradiction there.
True, but Amazon has a tremendous advantage in terms of sales of items other than the digital content designed specifically for the KF. Prime members spend two to three times more at Amazon than other consumers. Growing the "Prime" market segment is much of what the Kindle Fire is all about.
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Old 02-17-2012, 01:48 AM   #8
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In short, this isn't a game where one firm "wins" and another "loses." Amazon has been extremely successful with the KF. Apple continues to be spectacularly successful with the iPad.
The consumer wins with choices!
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Old 02-17-2012, 11:11 AM   #9
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Keep in mind that many people were buying the new iPhone instead of the ipad.
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Old 02-17-2012, 11:20 AM   #10
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True, but Amazon has a tremendous advantage in terms of sales of items other than the digital content designed specifically for the KF. Prime members spend two to three times more at Amazon than other consumers. Growing the "Prime" market segment is much of what the Kindle Fire is all about.
But, on the other hand, the iPad is sold world-wide; the Fire is US-only. This headline which talks about Amazon taking a 14% market-share I'm guessing is referring to the US market?
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Old 02-17-2012, 11:25 AM   #11
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So many people are stuck with what to give for the holidays and I believe this is one of the biggest reasons the KF sold so well. If it was released at any other time, sales (while still perhaps pretty good) would have paled in comparison over the course of the same amount of time on the market. How many IPADs were given as a gift?

I'm pretty sure Apple is working on a smaller tablet, the KF perhaps one of the biggest reasons why.
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Old 02-17-2012, 08:26 PM   #12
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I think most of the fires were sold pre-launch.
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Old 02-17-2012, 08:56 PM   #13
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But, on the other hand, the iPad is sold world-wide; the Fire is US-only. This headline which talks about Amazon taking a 14% market-share I'm guessing is referring to the US market?
Actually, you make a good point. The iPad sales are definitely worldwide so I suspect all the others are, too. And, of course, that means the FK sales outside the US are miniscule. Should be noted, though, that some KF's are sold to folks outside the US. There a literally hundreds of complaints on the Amazon review page from non-US consumers complaining about the limits on their devices.
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Old 02-17-2012, 08:57 PM   #14
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I think most of the fires were sold pre-launch.
No way. No firm figures available but most estimates put pre-launch orders at perhaps as many as a million probably considerably less.
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Old 02-17-2012, 08:59 PM   #15
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Keep in mind that many people were buying the new iPhone instead of the ipad.
That's probably true but it's odd that the author would make that point without considering that people might have bought the iPhone 4S rather than the Kindle Fire.

Again, no definitive data but at least one estimate I saw a few weeks ago estimated that KF sales cut iPad sales by about 1 million units in the fourth quarter.

Having done this kind of work for a number of years, it's very difficult to come up with definitive answers. Just how many people who purchased a KF would have been willing to spend another $300-$500 for an iPad? Some, but many of those consumers would have foregone a purchase rather than spend the additional money even if that were an option for them. Without some fairly sophisticated experimental tests, trying to determine how many KF purchasers would actually have purchased an iPad is very difficult.

Last edited by jsh1120; 02-17-2012 at 09:04 PM.
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