Kindle Fire snags No. 2 spot after iPad in Q4 2011

by Phil Hornshaw

The first quarter to see the entrance of the Kindle Fire on the tablet scene also saw Amazon’s new contender rocket to second place in sales, behind Apple’s iPad.

That’s according to a story from Technolog, which cites research from IHS iSuppli Display Materials & System Service that found that, at least in the fourth quarter of 2011, the Kindle Fire managed to sell more units than any other tablet on the market, second only to the iPad. That’s a pretty remarkable achievement, considering that the Fire was only released in November.

IHS speculates that of the four million Kindle devices Amazon reported selling in December – the online retailer didn’t break down the numbers by specific device – almost all of them were Kindle Fire sales (around 3.9 million). Largely, that was due to the Kindle Fire’s price tag of $199, which positioned it well for the gift-giving season. It also made it a great alternative to the iPad because it came in at least half the price of Apple’s alternative. The iPad 2 starts at $499.

As previously speculated though, the Kindle Fire wasn’t necessarily taking sales from the iPad, which managed to sell 10 times as many units in the same period. As Apple CEO Tim Cook noted on an earnings call concerning the last quarter of 2011, the Kindle Fire had no influence on iPad sales either negatively or positively. That means that the damage Amazon’s tablet is doing is to other Android devices.

In terms of market share, however, Apple is losing its dominance as more tablets enter the market and become viable, and a big portion of that shift likely has to do with the Kindle Fire’s impact on the scene. IHS reports that Apple’s share of the tablet market dropped to 62 percent during 2011, down from 87 percent in 2010.

Still, it’s likely not a lasting trend and Amazon (and Google) will need to keep the pressure up to keep the Android tablet market growing and becoming a more viable competitor against the iPad. IHS predicts (accurately) that Apple’s market share will see a big surge when it gets around to releasing the next iPad model, likely in the next few months. A surge like that might also be the underlying cause of the Kindle Fire’s success – it was new to the scene and has since cooled off a bit in terms of buzz.

Amazon and the Kindle Fire have a lot going for them in terms of tackling the tablet market, with the tab’s price tag still being a very big draw. But Amazon needs to keep improving the Fire and making it a great deal for new users if it wants to keep increasing its slice of the tablet pie.