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Kindle Fire cannibalized 1M to 2M iPad sales 'at most' this holiday

post #1 of 53
Thread Starter 
The launch of the $199 Amazon Kindle Fire had a detrimental effect on iPad sales for Apple, but the company is still expected to report record sales this quarter, a new report states.

Investment research firm Morgan Keenan on Tuesday trimmed its projected iPad sales for the holiday quarter from 16 million to 13 million. While less than previously expected, the 13 million total would easily best the record 11.2 million iPads Apple sold in the previous quarter.

Analyst Travis McCourt expects the iPad will generate 21.3 percent of revenue for Apple in the December quarter, up from 17.2 percent in the year-ago period, but also less than the 24.3 percent it represented in the September quarter. Part of his rationale for trimming projected iPad sales is Amazon's $199 Kindle Fire.

"Based on data from Amazon, we believe the Amazon Fire likely sold 4-5 million units this holiday season," McCourt said in a note to investors, "which probably means maybe 1-2 million cannibalized iPad sales at most."

Amazon revealed last week that it was selling more than a million Kindles per week leading up to Christmas. But the Kindle family includes Amazon's e-ink readers as well as the new Kindle Fire. Amazon did not provide specific sales data for any of its tablet-style hardware.



McCourt also on Tuesday increased his projected iPhone sales for the holiday quarter from 27 million to 29 million. He expects iPhone revenues will represent 47.5 percent of Apple's total revenues in the December quarter, up from 38.8 percent in the September quarter and 39.1 percent in the same period a year ago.

As for the Mac, McCourt has reduced his estimate from 4.9 million units to 4.8 million units over the holidays, which would be down from the 4.9 million Macs Apple sold in the September quarter. But that's a prediction that runs contrary to Apple's recent historical trends.

For example, a year ago Mac sales grew from 3.89 million in the September quarter to 4.1 million over the holidays. In 2009, Macs grew from 3 million sales to 3.36 million in the December quarter.

McCourt said 4.8 million Mac sales for Apple over the holidays would likely represent "another strong quarter of market share gains." He believes the global PC market will be largely flat year over year, while Apple will see 17 percent growth from 2010 over the same period.
post #2 of 53
No, no, no! Only other Apple products can cannibalize iPad sales. "Cannibalize" means eating your own. It's a word with a precise meaning that provides a very convenient shortcut for referring to a specific situation when analyzing markets. The word you are looking for is "displaced" or "grabbed".
post #3 of 53
It's ok...

I bet many of those Kindle Fire owners will end up getting an iPad after they get to play with their friends' iPads they got for Christmas.
post #4 of 53
Another day, another analyst report. Fodder for trolls and fanboys. Let 'er rip!
post #5 of 53
Yeah, so much for the "oh, it's not an iPad competitor" theory
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post #6 of 53
first amazon doesn't post k fire sold/ delivered
and
what's the return rate of fire vs iPad

i've never talked with anyone that has returned an iPad, they only buy more

looking forward to the ipad 3 to get the ipad 2 refurb at lower price point for my mother in law first computer and ip 3 for my wife
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post #7 of 53
Quote:
Originally Posted by Michael Scrip View Post

It's ok...

I bet many of those Kindle Fire owners will end up getting an iPad after they get to play with their friends' iPads they got for Christmas.

That is the Official Apple Line.

But there is no hard information to prove anything like that.
post #8 of 53
Quote:
Originally Posted by NOFEER View Post


i've never talked with anyone that has returned an iPad




I've never talked to anybody who has returned a Kindle.

Proof positive!
post #9 of 53
Quote:
Originally Posted by tundraboy View Post

No, no, no! Only other Apple products can cannibalize iPad sales. "Cannibalize" means eating your own. It's a word with a precise meaning that provides a very convenient shortcut for referring to a specific situation when analyzing markets. The word you are looking for is "displaced" or "grabbed".

The writer saw cannibalize in a context close enough and since it's a newer word it's sexier than the other older words. Like the way decimate is sexier than devistate and emulate is sexier than imitate. Their meanings are secondary to their sexiness.
post #10 of 53
Quote:
Originally Posted by tundraboy View Post

No, no, no! Only other Apple products can cannibalize iPad sales. "Cannibalize" means eating your own. . . ".

Right on, tundraboy. Do journalists not have to take any English courses or does Ingrish pass muster?

A few people might have gone cheap (chinched?) and bought at the fire sale, but they got what they bought and it wasnt an iPad of any meaning, by drunk or by sober.

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post #11 of 53
There is always going to be a % of parents who buy the wrong present.
post #12 of 53
Even with no data, intuitively it had to cannibalize some number (except, er, cannibalize" means eating ones own products). Because some people dont know that all tablets are not equally good; and might have easily afforded an iPad if they knew there was a reason, but they were just uninformed buyers.

But I bet an even larger number than that will be turned, by getting a Kindle, in favor of an iPad eventually, in future. Because its a taste that makes them appreciate the convenience of a tablet form factor, yet its also a bad experienceslow, lack of good apps, misc. glaring flaws (no volume buttons, awkward screen shape). Many of them will come to wish for an iPad, when they might never have really thought about a tablet before Amazon gave them a cheap taste.

And after all, their Kindle books can be read just fine on their future iPad! And they wont have bought many Kindle apps to worry about losing because there just arent many and they dont work so well that theyd be missed!

If someone gives up on their mediocre Kindle gets an iPad next timebut can still buy Kindle booksthats a win for Amazon AND Apple. Amazon didnt want the hardware sale anyway; thats a loss for them. And Apple can stand to lose some e-book sales; they want to sell iPads (hardware + OS) first, and e-books are secondary to Apple.
post #13 of 53
Any mention of how many regular Kindles were "cannibalized" by the sale of the FIRE?
post #14 of 53
Cuz it's not to smartness:-))
post #15 of 53
I m waiting on some blogger to publish the rate of return of the kindle & Fire. I know it will be at least 10%. I was in a Staples 2 days after christmas and there were 3 people returning theirs.
post #16 of 53
There's a reason as to why they don't break the numbers out. They don't want to put any 'water' on the Fire that they are losing money on.

My mom did get a Kindle Fire from my step father this weekend, and I used it a bit. After using the iPad, it really was too hard on the eyes and difficult to navigate. If you are into reading, the original Kindle is the smartest choice. The small text and lighted screen of the Fire gets very tiring on the eyes.

The browser on the Fire was a lot faster than I had read it to be. Very snappy. I did however find myself asking what do I do next with this? I felt that if books wasn't my main thing, then it wasn't very well laid out.

So the moral of the story is, if you want a Kindle, save your money and get the original and leave the color work and heavy lifting to the big boys.
post #17 of 53
Quote:
Originally Posted by Mugzy View Post

Any mention of how many regular Kindles were "cannibalized" by the sale of the FIRE?

They don't actually publish their numbers, so we'll probably never know that.

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post #18 of 53
Quote:
Originally Posted by cowhide View Post

I m waiting on some blogger to publish the rate of return of the kindle & Fire. I know it will be at least 10%. I was in a Staples 2 days after christmas and there were 3 people returning theirs.


I noticed that the KF 1 & 2 star ratings on Amazon.com have stagnated have held steady for the past few days. Guess Amazon must be blocking them They have been running at about 19.5%
post #19 of 53
Quote:
Originally Posted by bloggerblog View Post

Yeah, so much for the "oh, it's not an iPad competitor" theory

Any Android powered device is a direct competitor to any iOS device. Simple. Anyone who believes otherwise has their head buried in the ground.
post #20 of 53
Come on guys, hardly worth the discussion. There are people who cannot afford the iPad no matter what and have to settle for third best, there will always be a market for Kindle, albeit a small one. If Kindle users become iPad owners it will be in the secondary market and only after the frustration level has reached its peak... Had an iPad been within their budget, they would have certainly purchased one in the first place.

No one of means wakes up in the morning and declares, "today, I think I'll buy the cheap emulator because it's a free country and I have a right to purchase something inferior if I want to dammit!"
post #21 of 53
Quote:
Originally Posted by franktinsley View Post

The writer saw cannibalize in a context close enough and since it's a newer word it's sexier than the other older words. Like the way decimate is sexier than devistate and emulate is sexier than imitate. Their meanings are secondary to their sexiness.

Oh dear! O dear! Cannibalism is now sexy. Times are changing rapidly.
post #22 of 53
"As for the Mac, McCourt has reduced his estimate from 4.9 million units to 4.8 million units over the holidays"



I wonder what data point enabled him to be soooooo precise. What is he drinking to believe that such a small change in his estimate is material to anyone?
post #23 of 53
It is too easy for analysts, pundits and platform fanatics to group things counter-intelligently:

> Does it have wheels? It's a car, therefore Trek is being out-sold by Chevy by an order of magnitude - struggling to keep pace with Detroit automakers.

> Does it run Android? It's automatically a competitor for iOS, even if it is not the same class of device as those running iOS. Frankly I'm surprised someone like our dear slapppy hasn't cited all the Android smartphones with a music player app on them as leading the market against iPods.

> Conversely iPads are outselling rectangular smart photo frames by a factor of 1 miilion to 1. So Apple has completely owned the rest of the smart photoframe makers hands down!

Just like Steve Ballmer wants Windows in everything, Andy Rubin and Larry Page want Android in everything. It really doesn't matter that the device doesn't need to use it, or that it is a category of device that Apple doesn't make - as long as Android (or Windows) wins the check-off-the-largest-number-of-devices competition. And that's all that matter to Android fanatics anyway. Having lost the battle for the desktop, the open source folks have to shrilly proclaim whatever victories they can cobble together.

Besides since no real numbers are being used in these prognostications, its all smoke and mirrors until real numbers are actually used.

What exactly is a Kindle Fire? Well first off, with the name Kindle attached to it, and an existing ereader image and market, most people will perceive this as simply a more advanced ereader - which is essentially correct. That it runs an implementation of Android is a selling point only for those whose preference is for that label - so credit Amazon for doing a very clever market segment capture with that as well. Is it a direct competitor for the iPad? Not at all. Did some people buy it because it kinda of looked and sort of behaved like an iPad - probably. Did a bunch of geeks run out and buy one to hack and root? Probably. Is it a fully functional Android device - free to fulfill it's destiny of trying to suck the air from a redolent iPad atmosphere? Obviously not. It is a retro-version, locked-down, small-screened, poorly implemented, orphaned Android device designed to serve Amazon's marketing model. Nuf-said.
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post #24 of 53
Quote:
Originally Posted by svesan03 View Post

Come on guys, hardly worth the discussion. There are people who cannot afford the iPad no matter what and have to settle for third best, there will always be a market for Kindle, albeit a small one. If Kindle users become iPad owners it will be in the secondary market and only after the frustration level has reached its peak... Had an iPad been within their budget, they would have certainly purchased one in the first place.

No one of means wakes up in the morning and declares, "today, I think I'll buy the cheap emulator because it's a free country and I have a right to purchase something inferior if I want to dammit!"

Actually, I think it IS relevant. The Fire is $199 and the iPad is $499 to $829. Yet this analyst's estimate is that AT MOST, the Fire convinced less than 15% of iPad users to switch. Seems to me like pretty solid evidence that the Fire is just not considered by the market to be an adequate replacement for the iPad. After all, if it was even comparable, a 60-80% savings would have made a LOT more people switch.
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post #25 of 53
I doubt the number was that high. The price disparity, size, and utility disparity makes these products quite different. Most buyers simply aren't debating over the iPad and Fire.

If anything the Fire has killed plenty of Kindle eReader sales but don't the other Kindles actually make a slim profit and aren't reportedly a $50 loss per unit? If any of that is partially correct Amazon could show increased revenue but lowered profit for last quarter.

In the end I think the Fire and Nook Color will show buyers how a tablet can be useful, and they will opt for the 10" full sized, fully functional tablet next time if Amazon and B&N don't step up their game.

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post #26 of 53
I can't see iPad sales growing anywhere near the rate that we've seen until now. Sure, the holiday quarter will be great but Apple or someone will have to bring the next great App to the iPad to sustain current rates of growth. When that next great app hits the streets then I can see more and more people ditching their desktop and laptop computers for a tablet.

Having said that I can't see the Kindle Fire staying in production for any more than another 9 months tops if Amazon isn't getting the roi it was expecting from content sales. Solipsism gives another reason for discontinuing the Fire, it cannibalizes sales from the other Kindles which are guaranteed to at least sell books.
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post #27 of 53
Quote:
Originally Posted by jragosta View Post

Actually, I think it IS relevant. The Fire is $199 and the iPad is $499 to $829. Yet this analyst's estimate is that AT MOST, the Fire convinced less than 15% of iPad users to switch. Seems to me like pretty solid evidence that the Fire is just not considered by the market to be an adequate replacement for the iPad. After all, if it was even comparable, a 60-80% savings would have made a LOT more people switch.

And at most Apple has convinced only 10% of personal computer users to buy a Mac instead of Windows. Also, market share can't really be used as an indicator of where things are going when you are talking about a 1st generation device.

The first versions of Windows in the 80/90's sucked, but look what happened next. Amazon has deep pockets, and like MS when they were trying to get Windows to work, they have alternate revenue streams to support the ongoing development of their product. The Kindle Fire has been successful enough to get a foothold in the tablet market. Only time will tell where Amazon will go from here. PC manufactures are too quick to throw in the towel when they don't have instant success against Apple. I don't think Amazon will act the same way. Like MS, I think they will keep hammering away at it and improving their product.
post #28 of 53
not only does amzn not report their actual sales, there is a greatly distorted account of how much amzn loses on each sale.

the standard # is usually a 3cts loss, just relating to the cost of the kindle etc.
this does not include the costs for marketing, shipping, handling and a myriad of other costs that are hidden in 'overhead'.

not to forget, amzn showed a loss despite record sales. the ipad threat is diminished when the other factors are included. sooner or later amzn will have to dummy up to the plate with their sales.
post #29 of 53
Quote:
Originally Posted by pridon View Post

I noticed that the KF 1 & 2 star ratings on Amazon.com have stagnated have held steady for the past few days. Guess Amazon must be blocking them They have been running at about 19.5%

You are slandering Amazon -- you don't have any evidence that they have ever blocked reviews.

The statistics have remained practically unchanged since the first few hundred reviews (there are close to 10 000 now). 1-star ratings are roughly 1 out of 10 since day 1.

If anything, Amazon has been too liberal in permitting semi-literate nincompoops to leave reviews. Many 1-star ratings came from morons who didn't understand the product description before buying.
post #30 of 53
Quote:
Originally Posted by NOFEER View Post

first amazon doesn't post k fire sold/ delivered
and
what's the return rate of fire vs iPad

On topic, though the specifics differ... I noticed on the "Survive France Group" forum recently that one Amazon Kindle owner had returned FIVE in a year because her 15-year old daughter kept sitting on them and cracking the screen (perhaps the Kindles are too small... or the 15-year old is...).

http://www.survivefrance.com/group/b...mment%3A250492

So perhaps Amazons rather vague "millions" of sales include returns en masse.
post #31 of 53
What a crock of sh**!!
This has to be the most blatant lie I have heard in a long time. So 2 million iPads weren't sold because 2 million kindle fires were?
So the logical assumption here is that if you or I purchase a product other than Apple then Apple's then Apple suffers financially and their stock price takes a hit according to this doomsday cult anaylsist?
LOL!! God save the children.
post #32 of 53
Quote:
Originally Posted by lkrupp View Post

Another day, another analyst report. Fodder for trolls and fanboys. Let 'er rip!

I rest my case.
post #33 of 53
Quote:
Originally Posted by maccherry View Post

What a crock of sh**!!
This has to be the most blatant lie I have heard in a long time. So 2 million iPads weren't sold because 2 million kindle fires were?
So the logical assumption here is that if you or I purchase a product other than Apple then Apple's then Apple suffers financially and their stock price takes a hit according to this doomsday cult anaylsist?
LOL!! God save the children.

The day that anyone ever recommends Morgan Keenan stock will be the day I start paying any attention to their net-bites.
post #34 of 53
Quote:
Originally Posted by nagromme View Post

Even with no data, intuitively it had to cannibalize some number

No it didn't HAVE TO.

the Kindle Fire is geared to a totally different market than the iPad. Those that bought it are likely those that never planned to get an iPad for whatever reason.

Add to this that everyone is sure there will be an iPad 3 any day now and those that haven't bought an iPad 2 are mainly due to this reason. Not because they decided to get a Fire instead.

This guy is an analyst whose job is to talk out of his butt to try to raise stock prices, Amazon's in this case. Never trust an analyst to know what they are talking about.

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post #35 of 53
Quote:
Originally Posted by maccherry View Post

So 2 million iPads weren't sold because 2 million kindle fires were?

this guy is going to be real embarrassed when it turns out that only 1 million Fires were sold and then 900k of those were returned to wait and buy the iPad 3.

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post #36 of 53
Quote:
Originally Posted by slapppy View Post

Any Android powered device is a direct competitor to any iOS device. Simple. Anyone who believes otherwise has their head buried in the ground.

So you're saying this

http://www.wimm.com/

is a direct competitor to the iPad?
post #37 of 53
Quote:
Originally Posted by ericography View Post

So you're saying this http://www.wimm.com/ is a direct competitor to the iPad?

So it's a $300, thicker, worse iPod nano.

。。。

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post #38 of 53
Quote:
Originally Posted by charlituna View Post

[...] This guy is an analyst whose job is to talk out of his butt to try to raise stock prices, Amazon's in this case. Never trust an analyst to know what they are talking about.

Well said.

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post #39 of 53
Furthermore the Kindle Fire is currently only sold by Amazon in the USA, so it's not taking away potential international sales of iPads.
post #40 of 53
Quote:
Originally Posted by Wiggin View Post


The first versions of Windows in the 80/90's sucked, but look what happened next. Amazon has deep pockets, and like MS when they were trying to get Windows to work, they have alternate revenue streams to support the ongoing development of their product. The Kindle Fire has been successful enough to get a foothold in the tablet market. Only time will tell where Amazon will go from here. PC manufactures are too quick to throw in the towel when they don't have instant success against Apple. I don't think Amazon will act the same way. Like MS, I think they will keep hammering away at it and improving their product.

I'm not sure Amazin does have deep pockets though. Their last quarter was $68m in profits, which for a company turning over $4bn is not a lot. It's nice to make $68m admittedly, but your a company worth in excess of $100bn by market cap - $68m is what your scrape off your boot.

And the Fire loses Amazon money, not makes. Apple treats the App Store and iTunes as something that makes the next hardware sale, as opposed to standalone businesses. Look at the margins of the iTunes division, and the only people making money is the music industry - and Amazon charge less than iTunes! So Amazon has to be really careful here.

Plus there is the issue that they cannibalised their own Kindle sales. So instead of someone buying a Kindle/Kindle Touch which does have a margin, they sacrificed that customer for the loss leading machine. That is a double whammy.

Amazon in my opinion are playing a very dangerous game right now with their financials.
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