Kindle Fire eats into iPad sales lead, offset by global iPhone demand

Posted:
in AAPL Investors edited January 2014
Sales estimates for Apple's iPad were slashed by 1 million units for 4Q11 due to a strong Kindle Fire launch, but iPhone sales pick up slack with domestic and international demand driving a 1.5 million increase on previous figures.



In a research note released on Monday, Canaccord Genuity said that while Amazon's tablet is expected to erode Apple's massive market share in the fourth quarter, Apple stock will see a net gain as iPhone sales will be bolstered by global launches and continually strong domestic demand.



Analyst T. Michael Walkley lowered his previous iPad sales estimates from 14 million to 13 million for the quarter ending in December, citing an expected new iPad launch next year and competition from the cheaper Kindle Fire. He writes that by the end of 2011 Amazon will be the No. 2 tablet maker with a 15.3% share, though Apple will easily retain the top spot with well over half the market.



Walkley notes that the almost 21% decrease in iPad market share quarter-to-quarter will be more than offset by increased fourth quarter iPhone sales of 30.5 million units, up from previous estimates of 29 million. He goes on to say that a healthy U.S. demand for Apple's smartphone, particularly from AT&T and Sprint customers, combined with upcoming global launches will net the iPhone its best quarterly performance of the year.



Apple's iPhone 4S is scheduled to launch in some of the world's most populated countries in 2011, including Russia, Brazil and China. The raised iPhone estimates echo recent from other investment banks such as J.P. Morgan.



End of year smartphone sales estimates put Apple in second with its 18% market share trailing Samsung's 19.5%, followed by Nokia and RIM, with 15.7% and 11% respectively.



Estimated tablet sales | Source: Canaccord Genuity



iPad will once again enjoy a commanding lead with 63.2% of the 2011 tablet market, followed by Samsung with 8.3% and newcomer Amazon with a 6.2% share.



The analyst puts a $560 target price on AAPL stock, with an increased earnings per share for fiscal year 2012 at $34.16, up from $33.52.
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Comments

  • Reply 1 of 57
    I look forward to when those ``estimates'' from sources fall on their face.



    Amazon is cannibalizing other Android Tablet and Nook sales.



    End of story.
  • Reply 2 of 57
    mytdavemytdave Posts: 434member
    I don't think the Kindle Fire is going to have any affect on iPad sales whatsoever. It will obviously change the market share #s because industry analyists will group the Fire in the same tablet category as iPads, but it's not going to affect actual iPad sales. I'll be shocked if when the numbers come in Apple hasn't sold like 17 million of the things.
  • Reply 3 of 57
    rainrain Posts: 538member
    Quote:
    Originally Posted by mdriftmeyer View Post


    I look forward to when those ``estimates'' from sources fall on their face.



    Amazon is cannibalizing other Android Tablet and Nook sales.



    End of story.



    I disagree. I know a few people who are going to go with the Fire over the iPad for their first tablet.

    The price point is enough for them to take a chance that they can leave Apple's walled garden and still have an enjoyable user experience.



    Fire is a competitor for sure & almost guarantee's that the iPod touch is going to get a larger screen.



    The tablet market is not the desktop or phone market. Most consumers looking at a tablet are buying it as a media consumption device and web browser. Security is not a big concern for them.



    What will be worth watching is where the developers go. A couple blockbuster apps for Android that are unavailable for iOS - and the game could change rather quickly.



    Apple will have the support base from those who are already invested in apps. That will be the challenge for their competitors. However, the market is new and not a lot of people have tablets yet. The game is far from over.
  • Reply 4 of 57
    solipsismxsolipsismx Posts: 19,566member
    Even though this is just about marketshare I think 2012 may be the time Apple needs to get the HiDPI display in the iPad so they can seal this up as another iPod-like domination.





    Quote:
    Originally Posted by mytdave View Post


    I don't think the Kindle Fire is going to have any affect on iPad sales whatsoever. It will obviously change the market share #s because industry analyists will group the Fire in the same tablet category as iPads, but it's not going to affect actual iPad sales. I'll be shocked if when the numbers come in Apple hasn't sold like 17 million of the things.



    That's what I'm thinking.
  • Reply 5 of 57
    Quote:
    Originally Posted by rain View Post


    The price point is enough for them to take a chance that they can leave Apple's walled garden and still have an enjoyable user experience.



    And either be stuck outside it without their gardening tools or be like Adam and Eve cast out into the barren world.



    Quote:

    Fire is a competitor for sure & almost guarantee's that the iPod touch is going to get a larger screen.



    *snort* Just like all the other 7" tablets and 4.5" phones that ensure Apple will change its screens sizes.



    Quote:

    Security is not a big concern for them.



    If they're buying it as a web browser or media consumption device, that's their number one concern. Do you not know what security is?



    Quote:

    What will be worth watching is where the developers go.



    Hmm… 500,000 apps and an established base of 300,000,000 users or 100 apps and 10,000 users… I WONDER.



    Quote:

    A couple blockbuster apps for Android that are unavailable for iOS



    And what would these BE, exactly?
  • Reply 6 of 57
    13 million?! Really??!



    These fools (analysts) were estimating 14-15 million for the last quarter and I said they were on the high side.



    This time I think this guy is on the low side and I estimate 14-15 million for this quarter.



    I estimate that over 2/3 of the people who bought the Fire would never have bought an iPad in the first place, regardless of any surveys that may or may not exist.
  • Reply 7 of 57
    We're an all iMac and iPhone family. And we own Apple stock.

    However, I just bought a Kindle Fire for my wife and a Touch for myself.

    My wife really enjoy's her Fire: She uses it mostly for reading and movies.

    I use the Touch for books (we're AMZ Prime members).



    But I also plan to buy an iPad 2 or Air this Spring.

    My needs are different. But I also find the Fire enjoyable and the price was compelling.

    Some people like the country, some the city.

    It's all good.

    Ps, my first post!

  • Reply 8 of 57
    This is from one analyst (and I didn't refer back to Phillip Elmer-Dewitt's chart from last quarter to see where this 'expert' was in the "got it right" standings), but how does this guy's reduction fall in line with Peter Oppenheimer's guidance from last quarter? If his 'reduction' matches up with Apple's numbers, is it really big news?



    Granted, Apple guides conservatively and Wall Street is disappointed if Apple fails to sell to every human, dog and cat on planet earth.
  • Reply 9 of 57
    tbelltbell Posts: 3,146member
    I know some people doing the same as well. Most of these people, however, are under the mistaken assumption that the Fire is somehow a cheaper version of the iPad and can do most of what the iPad can for less money. Amazon obviously benefits from that perception.



    In reality, anybody wanting an iPad experience for the Fire price is going to be disappointed. The iPad is both a content creation plus content consumption device. The Fire is merely a content consumption device, and a poor one at that. One can actually replace a computer with an iPad. You can't do that with a Kindle Fire.



    Most of the reviews, even the positive ones, point out one big disadvantage. Namely, it is sluggish. You click on the screen, and it often takes one hitting it again, or waiting for the device to respond.





    I would recommend anybody thinking about getting one first go play with one at someplace like Target, and then go play with an iPad at some place like the Apple Store.







    Quote:
    Originally Posted by rain View Post


    I disagree. I know a few people who are going to go with the Fire over the iPad for their first tablet.

    The price point is enough for them to take a chance that they can leave Apple's walled garden and still have an enjoyable user experience.



    Fire is a competitor for sure & almost guarantee's that the iPod touch is going to get a larger screen.



    The tablet market is not the desktop or phone market. Most consumers looking at a tablet are buying it as a media consumption device and web browser. Security is not a big concern for them.



    What will be worth watching is where the developers go. A couple blockbuster apps for Android that are unavailable for iOS - and the game could change rather quickly.



    Apple will have the support base from those who are already invested in apps. That will be the challenge for their competitors. However, the market is new and not a lot of people have tablets yet. The game is far from over.



  • Reply 10 of 57
    Quote:
    Originally Posted by AppleInsider View Post


    Sales estimates for Apple's iPad were slashed by 1 million units for 4Q11 due to a strong Kindle Fire launch,

    [/c]



    How much nonsenses do we have to endure? I can't believe there is an analyst out there who really belives this
  • Reply 11 of 57
    Quote:
    Originally Posted by Sandyf View Post


    But I also plan to buy an iPad 2 or Air this Spring.



    Why would you buy a 2 when the 3's going to come out?



    Quote:

    My needs are different. But I also find the Fire enjoyable and the price was compelling.

    Some people like the country, some the city.



    But people can move between them without repurchasing all their furniture, vehicles, and clothing.
  • Reply 12 of 57
    srangersranger Posts: 469member
    Obviously the Fire will have some negative effect on iPad sales, but how much is quite debatable.....
  • Reply 13 of 57
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by Rabbit_Coach View Post


    How much nonsenses do we have to endure? I can't believe there is an analyst out there who really belives this



    I'm sure some irrational person made the choice for the Fire instead of the iPad they planned to buy, but not 1 million. Based on the numbers sold that's an excessive number of people that were debating between these two devices. and chose the Fire It's just doesn't make sense. If you are willing to spend $500+ for a tablet the Fire just won't cut it, and if you have less than $400 for a tablet then the iPad isn't going to be an option.
  • Reply 14 of 57
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by sranger View Post


    Obviously the Fire will have some negative effect on iPad sales, but how much is quite debatable.....



    I think longterm the Fire will have a positive affect on iPad sales.
  • Reply 15 of 57
    tbelltbell Posts: 3,146member
    I can see you buying the Touch for yourself because of the e-ink screen as it is more enjoyable for reading. Owning that and an iPad would complement each other. I, however, can't see the point of owning a Fire and iPad. The Fire is so inferior compared to the iPad nobody would ever use the Fire if they owned both. The Fire also lacks cameras, sensors, and other features. Those omissions essential assure if can't be used for certain types of communications, and other applications.



    I have a family member who got the Fire as a gift so I have used it. I really don't like it for reading as much as the regular Kindle, and its sluggishness and smaller size make it a pain to use in relation to the iPad.





    The Nook for fifty dollars more is a better device than the Fire. It can do the same things, but it isn't sluggish.





    Quote:
    Originally Posted by Sandyf View Post


    We're an all iMac and iPhone family. And we own Apple stock.

    However, I just bought a Kindle Fire for my wife and a Touch for myself.

    My wife really enjoy's her Fire: She uses it mostly for reading and movies.

    I use the Touch for books (we're AMZ Prime members).



    But I also plan to buy an iPad 2 or Air this Spring.

    My needs are different. But I also find the Fire enjoyable and the price was compelling.

    Some people like the country, some the city.

    It's all good.

    Ps, my first post!





  • Reply 16 of 57
    aaarrrggghaaarrrgggh Posts: 1,569member
    I have trouble understanding where 3.8 million Kindle Fire's will come from. Apple has taken over a year to ramp up to around 3-4 million iPads per month; the first year was stuck around 1MM per month. Amazon only has a couple million Prime accounts.
  • Reply 17 of 57
    You listed the tablet chart twice and omitted the smartphone chart. How about an update. Thanks. \
  • Reply 18 of 57
    I estimate that analysts has pull 25% more bullshit out of their ass since the Amazon Fire has been on sale.



    I estimate that analysts will pull 10% less bullshit out of their ass after the new year. Then they will pull 18% more bullshit out of their ass after the next quarter financial report.



    I estimate that AppleInsider will increase its report of analyst bullshit by 45% in the coming year.
  • Reply 19 of 57
    Quote:
    Originally Posted by SolipsismX View Post




    I think longterm the Fire will have a positive affect on iPad sales.



    Exactly. Plus... I think longterm the Fire will be bad for all those other Android tablets.



    You've got the iPad at the $500+ mark... the veteran tablet of the last 18 months. Its sales have proven it's a very hot item.



    Then the Kindle Fire at the $200 mark... the value newcomer backed by Amazon's ecosystem. Even if techies don't particularly like the Fire.... people are gonna buy a ton of them!



    This creates a problem for the other Android tablet makers. They either have to make their tablets cheaper to tempt the potential Fire buyers (which won't be profitable for them)... or make their tablets seem more attractive if they're priced anywhere close to the iPad.



    We've already seen what happens if you price an Android tablet at or near the iPad's pricing... and it wasn't pretty.
  • Reply 20 of 57
    bageljoeybageljoey Posts: 1,749member
    Quote:
    Originally Posted by mytdave View Post


    I don't think the Kindle Fire is going to have any affect on iPad sales whatsoever. It will obviously change the market share #s because industry analyists will group the Fire in the same tablet category as iPads, but it's not going to affect actual iPad sales. I'll be shocked if when the numbers come in Apple hasn't sold like 17 million of the things.



    I can't believe anyone would say this. Just today at work, a woman said she was buying 4 kindles--one for each kid. She had been planning on getting 2 iPads for her two oldest, but dreaded the fights over sharing with the two younger.

    I tried to steer her toward the iPad 1s being sold as refurbished, but they are still almost twice as much as a Kindle...

    When I tried to talk about the qualitative differences her only question was "does the Fire have Angry Birds?"
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