IDC: Kindle Fire to push iPad below 60% market share in Q4 - Page 2

Since Amazon is selling just over 1 million per week in the US alone, when they go internationnal they will probably sell more Kindle than Apple is selling ipads.

But I just dont get there business model: folks are buying it because its very cheap and I am not sure they are the kind of people who will spend a lot in the ecosystem. Apple has a client base that spends a lot, on top of this Apple is taking a 30% cut and Itunes sales only returns about 8 billions per year out of 100+ billions in revenu.

The Amazon stock is trading at 100 P/E. Do not touch that thing, its going to crash at some point just like netflix.

One thing is sure, people dont want to pay prices that are almost the same of the ipad for an android tablet. On the other hand, there is an hunger for cheap tablets sold buy "known" manufacturers.

I know what you are saying, and I too lament that the power of the iPad is so crippled by iOS and especially, by the policies dreamed up by the suits at Apple.

But I disagree that Apple's products will not be profitable for them in the long haul. Even the Mac makes them money, despite not selling very many of them.

Apple has momentum, and is now a household name. They gave up "Think Different" in favor of "Everybody's buying our stuff" as a meme.

Apple has got at least another 5 years of great success ahead of them. The product pipeline is set, and lots of people will buy their stuff.

Analysts always predict that android is going to lead in the future which is probably is a logical view because tbey are only going to release like 300 different types of tablet and so eventually people are going to buy them just like they did with smartphone. Apple only has one tablet that it upgrades every year and they sell like hotcakes, that is something to boast about. But Android saturates the market with some crappy tablets and some good tablets with so many tablets consumer feel that its time to jump the boat and purchase one . The difference with Apple is that they win the customer they don't drown them in products. Hey I'm an Analyst hehehe.....*sarcasim*

Samsung has announced an 11.6 inch Galaxy Tab. I think that it will be a better size for couch potatoes than Apple's smaller screen. I predict that the pricing will be competitive with Apple's tablet.

And the 7 inch devices, especially the inexpensive ones, are better for commuting or the beach or trips to the playground with the kids.

Apple's tablet will continue to be popular, but it is no longer the only good choice. Indeed, even now there are better choices, like the Transformer Prime, and in the future, if Apple is as obstinate about excluding features and options for consumers as they have been in the past, they will dominate their niche, but abandon most buyers.

If we did, then we could claim that Apple has a MUCH larger market share!

That's the ticket!

It figures out to keep some people guessing. Others consult the accounting rules or secondary sources which explain them. That is how it figures out.

If IDC's premise is true, then maybe Android developers can start focusing on tablet-sized interfaces that scale seamlessly from smaller screens to larger adding more interface elements as size allows.

I don't think that is what will happen though. I think Amazon will shut out other Android players with a superior content ecosystem and then move upmarket to challenge Apple all on Google's research dime. At around the same time, Microsoft's Windows 8 Metro will attack from the top end.

That will leave HTC, Samsung, Toshiba, Asus, Motorola, and Acer left standing but fighting for scraps.

Sure the Kindle Fire will get the iPad to drop under 60% THIS Quarter. It's the holidays and they don't adjust for returns anyway

But next quarter when the iPad 3 comes out folks will be buying bazillions, flooding the market and putting Apple back up at their typical 90%.

Yup, apple is a failure. they are only the 2nd most valued (market cap) company in the world. They have the majority of the profits in the phone market and make the most profits in the PC market. And the mp3 market as well.

Yes. Except Windows 7 needs to be given away for free to all hardware manufacturers.

Even if the Kindles is a POS, underpowered, low build quality, hobbled Android device, Amazon is playing the bragging rights game. The press will continually spout out the huge market share gains from Kindle and the huge market share lost of the iPad. Never mentioning the glaring inadequacies of the Kindle Fire and the real reason its sold at a loss.

Even if we pretend for a second that these two products are competing in the same market, market share still doesn't really matter. Profit share, and growing profit are what matters. iPad is way above 60% and will remain there by those measures for the foreseeable future.

Are you Amazon's accountant or financial analyst? I'm curious why anybody should believe your assertions.

Believe it or not, Amazon probably has at least a few competent folks who have worked out a business model for the Kindle Fire. Companies don't just invest millions (or billions) on a whim.

Except that folks who owned previous Kindle devices actually did buy a lot of content.

And with "one click" you can bet that the Kindle will sell a lot of apps, books, movies, etc.

I know it's hard to believe for some in these parts. But not everybody needs to buy a $500 tablet just so they can buy $5 apps. There is a price/capability threshold that is good enough for the average consumer. And the Kindle Fire is it. Once they get it, users will spend on content. I am betting that this will prove to be one of the smartest things Amazon ever did.

I think that is why the Fire will see some success because Amazon is skimming off the low end of people for whom the iPad is more capability than is needed. As far as consumption the only things it fails at are Magazines and comic books. It browses, it plays the more popular Android games that Amazon curates and chooses to sell, it gives you movies, TV and eBooks. That is a significant chunk of iPad usage right there.

I can see a parent buying an iPad for themselves and a Kindle or Kindle Fire for their children because it is "good enough" until they need an iPad for school textbooks or something like that.

It's actually worse than that. His wife is an instructional coach - and is responsible for teaching other teachers how to teach. The fact that she's apparently incapable of imagining anything different than the status quo is scary.


I'm not making the estimates. Values of $200 to $250 for the bill of materials have been published all over the web by various people And all of them have clearly factored in volume discounts since they're using volume pricing rather than list prices.

For comparison, when the same people do iPad BOM estimates, they're always way below the actual cost of production - which is available from Apple's reports. So if they're significantly underestimating costs for Apple (who sells fare more iPads than Amazon sells Fires), what makes you think that they're OVERestimating Fire production costs?

Exactly. I see the Fire as being purchased by two groups of people:

1. People who would never have spent the $500-800 for an iPad, anyway, so the Fire does not impact iPad sales in this group.

2. People who already have an iPad and buy a Fire as a secondary device. This could have an impact on Apple's market share if they would have bought a second iPad, otherwise. Many of these people will eventually buy another iPad, anyway and some may be disappointed with the Fire because of its limitations. Or, they may be perfectly happy having a combination of devices.

Only time will tell the results from those different groups. In the end, though, I suspect that:

1. Kindle Fire will do well in terms of total sales. Given that its price is 40% of the low end iPad, there will be people who can live with its limitations.

2. Amazon will eventually increase the price (probably spring or summer when the v 2.0 comes out) to try to eke out some profitability after they've established themselves as a serious player.

But if these Fire owners find that the tablet category is something they like they could easily want a larger, more full featured tablet for their next purchase. Hence, I think the Fire will ultimately help non-crippled tablet sales, which is why I think Amazon needs to grow their brand within a year to prevent that from happening.

I'm not making the estimates either, which have ranged from $150 and up. With different sources reporting different costs for the identically same component, just who is right? Perhaps none of them.

As for Apple's costs actually being higher than the BOM's reported by iSuppli and such, I get the impression you're in management or have owned your own business. If so, you know that cost accounting can be adjusted to show higher or lower costs/profits depending on what the purpose of the figures are. I certainly report them differently depending on whether it's intended for tax purposes, internal planning or used to influence a customer's buying decisions (perhaps by minimizing how much profit you're making from them). It doesn't make any of the figures a lie, it's just different accounting and reporting methods.

For reference, here's another BOM estimate from TechInsights. They're also considered a reputable source along with iSuppli:
http://www.eetimes.com/electronics-n...BoM-about--143

For those too busy to follow the link, they claim that further inspection of the Fire shows the BOM should really be $143.

I don't think Amazon will increase the price. It would not help them challenge Apple or other Android OEMs. I see Amazon releasing an 10 inch tablet next year for $299.

The Kindle Fire's most profitable pitch is Prime. If they are losing $5 per device (and reports say it's less than that), at $80 per year, if even 1 in 10 Kindle Fire purchasers subscribe to Prime, Amazon will come out on top. Contrary to popular belief, these devices just aren't that expensive to manufacture. Amazon has such a bare bones basic device. The software was free, other than the costs of skinning Android for the Kindle Fire.

I don't think it will hurt iPad sales that much. But that's simply because Apple has a knack for opening new markets. But in my mind, there will surely be some substitution going on. Anybody who just wanted a tablet to read or surf the web will surely consider the Kindle Fire to be a reasonable substitute. Put yourself in the shoes of the average consumer (non-Apple fan) and you'll begin to see how reasonable $199 looks for surfing, reading and watching movies. Especially, if you already get a lot of content from Amazon.

But if apps are a big focus then undoubtedly the iPad is king. If you want a bigger screen, the iPad wins out. Basically, for anything other than the most basic media consumption, the iPad wins.

Lastly, there's kids. Most folks here might chance it. Most real world parents are averse to giving kids a $500 device to play with. A $199 tablet with a few apps and movies for the kids, is good enough for long car or plane rides. And at that price, you can get each kid their own, instead of making all the siblings share an iPad.

Isn't that exactly what Apple paid some flak to say a few days ago?

If amazon wanted bragging rights, they would have released actual numbers. They haven't, so far, for the Kindle and I doubt they will for the Fire. "Millions and millions" is not an actual number.

But again, how do you account for profits from different business models? Amazon makes money selling content not hardware. Even with Android it's not so clear cut. Apple takes the whole profit from its hardware sales. With Android, the OEMs get some for their hardware, Google makes some from its services. But how do you account for second-order effects? Android devices hook people into the ecosystem. They may stay there even if they don't use Android after that first device.

It is worth noting that this is over a million Kindle products per week, not Kindle Fire specifically. They could be selling 800k of the other Kindle models and only selling 200k Kindle Fire and their statement would still be accurate.

Two pieces of advice: (i) Stop posting tripe; (ii) If you want to do that, at least take the trouble to read and digest the conversation that has transpired before.

The Fire is an experiment. If Amazon gets the returns expected in content sales then maybe it will go international.

In other words... don't hold your breath.

Two statements for you:

(i) Last I checked you don't run this place and your opinions carry no more weight than anybody elses. So you getting your panties in a bunch over the value of my posting is irrelevant.

(ii) I did read the entire thread and I was responding to somebody's previous comment, even though I didn't quote it. I can't help it if you are incapable of deriving the context from my post.

The many things people lump together as the Android market/user base/etc. are often misleading! And still true in some sense, if you find it interesting to consider all the things out there derived from Android* (like the Fire and various non-standard Asian versions; platforms that dont run Android market apps). But a bunch of devices that arent compatible with each other, from totally different companies, do not make a platform in the way iOS is.

* Actually you could consider all Android devices derived from iOS, too! Android wouldnt exist in anything but name (if that) if it werent for copying iOS.

So I consider the touch-OS market to consist of Apple-derived platforms + a tiny slice for Windows Metro

But with Amazon, have any of the Kindles ever been that popular outside the US?

Here in Canada, Kobo is bigger, because they are tied into our largest book retailer: Chapters.

Great analysis...

Except for 2 minor points:

1) The Fire and Nook are not tablets.

2) They do not run Android.


...In other news, IDC repports that Huffy's share of the personal transportation market has risen to 7.25% And that the Hispano-Suiza was next with 0.12% -- despite the fact it was discontinued in 1936.

As a peon in a large corporation I saw this first hand. Mind you this was not an electronics concern. In the end such moves almost put us out of business. So yeah deceptive practices like this are common.

In the case of Amazon though I do believe that initially they sold a large number of Fires but that has changed drastically as people have seen the poor reception for the device. In the end the competition is good for Apple, hopefully the new iPad models will reflect this. This is especially the case when things like Fire demonstrate just how well designed and support iPad is.

Also let's not forget that there is a huge difference in who these devices target. E-Readers really should be in a category of their own. From my perspective and E-Reader like Kindle is a legitimate device in its own right but really isn't in the same category as iPad.

You are right. Apple is anti-customer. You can see it in their stock price, analyst projections and actual sales, dismal as they are. Pitiful. Just pitiful. /sarcasm

That would be overkill ... For what theyvdo now. How about for tomorrow when there are new uses? After all, that is what tends to happen when new technology is introduced into an organization. Bright people are challenged to find new and better uses for the technology.

Times change. Saddling an organization with a solution that fits now is not always the best solution. Doing so tends to stifle growth.

Exactly. People keep comparing Android to Windows circa 1990, but there's the critical difference. Microsoft maintained an iron-grip on Windows and there weren't dozens of forks and variations and proprietary UI layers in the mix. The hardware varied back then but the OS didn't. Windows and PCs were a one-to-many relationship. Android and the hardware is turning into a many-to-many relationship. If Android is going to mutate like this, it's sort of disingenuous to group all these variations under one name.

Amazon has to pay a margin to the retailers.. I think I read that KF is available in 16,000 points of sale. I would expect at least a $50 mark up on those, so Amazon would only net $150. It also has to absorb the negatvie impact of at least 10% return rate that some have forecast.

Also Amazon must absorb at least $10-15 in free shipping.

Will the Q1 Market share iPad market share exceed 100% when KF returns exceed the Q1 KF sales?

Nice post....


Ha! I misread the following:

...Plus all the licensing feces they must be paying for all that "free" content you get with Amazon Prime.


Edit: I don't know which is deteriorating faster: my eyesight or my mental processes...

Just one more reason to stick a fork in it, imho.

I see a theme here, Dick...

From his statement, how can you determine what the school district needs are, or what they would like, or what is on their wish list? What is the concept that she (and apparently I) is missing?

He makes a totally valid point, sometimes a less expensive piece of equipment is all you really need to accomplish your goals. If a $600 Mac Mini suits your needs, why buy $2500 Mac Pro?

BTW, she is an instructional coach, which means she works with teachers, the principle, , etc.... not the kids.

This place is giving headline space to "analysts" the way run of the mill internet forums let people in their dens who haven't put on clothes in three days post their ground breaking opinions. There's sometimes very little difference between the two except for one puts on a suit and shows up at an office, and the same little difference in the validity of their proclamations.