DMSD Insider: Amazon’s Kindle Fire reduces Apple’s lead, but iPad still ruled holiday quarter with 58 percent market share

Thursday, January 26, 2012

Amazon’s Kindle Fire reduces Apple’s lead, but iPad still ruled holiday quarter with 58 percent market share

Amazon’s Kindle Fire reduces Apple’s lead, but iPad still ruled holiday quarter with 58 percent market share:

Apple’s iPad maintained its market lead throughout fourth quarter of last year even though it lost some ground compared to the previous quarter due to an influx of Android-based tablets. In fact, Amazon’s dirt-cheap Kindle Fire device that costs just $199 saved the day for Android slates, really. This is the gist of the latest survey by research firm Strategy Analytics, released this morning.

Global tablet shipments reached 26.8 million units in the fourth quarter of 2011, up 150 percent from 10.7 million from the year-ago quarter, they said. Global tablet shipments hit 66.9 million units throughout 2011, a 260 percent increase from just 18.6 million units in the whole 2010. Taking a look at how tablet vendors performed throughout Q4 2011, the survey recorded a 39.1 percent share for tablets powered by Android. Even though it’s a record for tablets driven by Google’s software, Apple sold 15.43 million iPads during the holiday quarter for a healthy 57.6 percent share. This left the remaining three percent for tablets outside the Android/iOS tablet duopoly, with Microsoft-driven devices holding onto one percent share of the market.

This compares to a Strategy Analytics’s survey for the September 2011 quarter, with a 27 percent share for Android tablets in Q3 2011 (up from 2.3 percent in Q3 2010) and 67 percent for iPad (down from 96 percent in Q3 2010). Android tablets are clearly picking up steam, largely based on the success of Amazon’s device that launched October 15, 2011. Still, iPad is expected to remain king of the hill as analysts expect its lead maintained throughout 2012.

Strategy Analytics research director Peter King opined:

Apple shipped a robust 15.4 million iPads worldwide and maintained its strong market leadership with 58 percent share during the fourth quarter of 2011. Apple shrugged off the much-hyped threat from entry-level Android models this quarter.

Apple CEO Tim Cook said during a conference call with analysts following Apple’s monster earnings report that “limited function” tablets such as the Kindle Fire are not in the same league as the iPad and therefore don’t pose the threat to Apple, but noted he believed Amazon will sell a “fair number”of tablets. Apple’s chief executive also claimed that, based on weekly data following the Kindle Fire launch, Amazon’s device didn’t have an “obvious effect” on iPad.

Both IHS iSuppli and ChangeWave Research found out that while the Kindle Fire outperformed all non-Apple brands combined, most holiday shoppers chose an iPad. Cook’s argument is based on a belief that customers who want an integrated devices that just work and the best experience available won’t settle for the limited function and will instead pick an iPad. The notion is shared by various analysts saying that Amazon’s device is but a training wheels for iPad.