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Kindle Fire Hits Four Million Sales Estimate For Q4, Says IHS

Amazon’s Kindle Fire chomped away at Apple and Samsung’s tablet market shares in the fourth quarter of 2011

Amazon managed to sell 3.9 million Kindle Fire tablets during the fourth quarter, living up to analysts’ sales estimates for the seven-inch Android slate before it launched 15 November for $199 (£126), said researcher IHS iSuppli.

The Kindle Fire grabbed 14.3 percent of the nascent tablet market. That is good for Number Two in a market segment easily dominated by Apple’s iPad, which with 15.4 million units sold commanded 57 percent of Q4 tablets sales.

Driving down prices

Samsung, which sells a handful of Android Honeycomb tablets, ranging from seven to 10.1 inches in display size, came in third in terms of percent market share, selling 2.1 million units of its Galaxy Tab family.

The Fire was certainly disruptive. In Q3 2011, the iPad commanded 64 percent market share on sales of 11.1 million iPads, while Samsung sold 1.9 million Tabs for an 11 percent share. Apple and Samsung lost seven percent and four percent tablet market share, respectively, since the Fire’s arrival.

Moreover, Samsung, Motorola and HTC are slashing their tablet prices to compete with the Fire, IHS said. While the Fire was responsible for cannibalising some of the iPad’s massive tablet market share, IHS also deduced that the iPhone 4S actually whittled some of the popular tablet’s share for Q4.

IHS analyst Rhoda Alexander said the arrival of the iPhone 4S in October “generated intense competition for Apple purchasers’ disposable income, doing more to limit iPad shipment growth than competition from the Kindle Fire and other media tablets”.

Amazon does not provide unit shipment figures for its Kindle family of e-readers or tablets, so analysts are left to conjecture and sales channel checks.

In this case, Alexander told eWEEK she estimated the Fire’s unit sales and market share using a combination of supply chain input, calculated factory shipments out, channel feedback and reductions to January factory orders.

Interestingly, Alexander is not so sure about the Fire’s future. That is because the company is practically selling each tablet at cost and looking to make its money back in content and services, such as online books and other goods, applications, and streaming music and video.

Other analysts are more confident in Amazon’s Fire strategy, which likely includes a device with a larger screen, for the long haul. RBC Capital analyst Ross Sandler estimated the e-commerce giant could make $136 (£86) in content and goods from each device over its lifetime.