If you make it cheap, they will come. That’s the lesson Amazon has learned with the release of its Kindle Fire tablet, which according to iSuppli is on track to become the second-most-popular tablet, after Apple’s iPad. The Kindle Fire has only been on sale for two weeks.
According to the IHS iSuppli Display Materials & Systems Service, Amazon will ship 3.9 million Kindle Fire units during the last quarter of 2011. That’s more than twice IHS’s predictions for Samsung or Barnes & Noble, both of which are set to ship around 1.3 million units of their tablets. At that rate, Amazon will own 13.8 percent of tablet market share, and increase the total number of 2011 tablet shipments by 7.7 percent to a total of about 64.7 million tablet units.
“Nearly two years after Apple Inc. 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, IHS senior manager of tablet and monitor research.
If true, Amazon will have to drown its tablet offerings in secret sauce to get anywhere near Apple in tablet sales. IHS predicts Apple will sell a whopping 18.6 million iPad units during the last three months of this year, giving it a total of 65.6 percent of the market. This lead will likely remain, or increase, when Apple releases the inevitable iPad 3, which is rumored to debut in March. At that time, the price of the iPad 2 will drop, making it more popular than it already is.
Of course, the rumor mill is already speculating that Apple could take the low road, and release a new, less expensive iPad model. But let’s be realistic: that’s just not going to happen.
Still, it seems the low-end tablet route is working well for Amazon, whose Kindle Fire, which sells for $199, is well below the cost of most tablets. The online retail giant is also rumored to have both a smaller, 8.9-inch version of the Kindle Fire, as well as a smartphone, in the works for 2012.
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