Amazon’s Kindle Fire tablet is expected to ship 3.9 million units to become the second biggest-selling tablet computer in the fourth quarter of 2011, according to market intelligence company IHS iSuppli. These figures would give Amazon a 13.8 percent market share of tablet shipments globally, trailing the Apple iPad’s 65.6 percent but considerably ahead of number-three tablet vendor Samsung’s 4.8 percent.
“Initial market response strongly suggests that Amazon, with the Kindle Fire, has found the right combination of savvy pricing, astute marketing, accessible content and an appropriate business model, positioning the Kindle Fire to appeal to a brand-new set of media tablet buyers,” said the senior manager for IHS iSuppli’s tablet and monitor research division, Rhoda Alexander.
The arrival of the Android-powered Kindle Fire should contribute to a 7.7 percent increase in IHS iSuppli’s forecast for total tablet sales for 2011, from 60 million units to 64.7 million. The total shipment level will be 273 percent up on 2010’s 17.4 million units while 287.2 million tablets are expected to be shipped in 2015.
The much lower price of the Kindle Fire compared to other tablets will play a role in the expanding sales of non-Apple tablets, according to the market intelligence firm. The group believes the US$199 selling price is lower than the US$201.70 it costs to make each Kindle Fire, which has “created chaos in the Android tablet market,” according to Alexander.
“Most other Android tablet makers must earn a profit based on hardware sales alone. In contrast, Amazon plans to use the Kindle Fire to drive sales of physical goods that comprise the majority of the company’s business. As long as this strategy is successful, the company can afford to take a loss on the hardware—while its Android competitors cannot,” she said.