Cheaper iPad 2 may be extinguishing Kindle Fire sales

Cheaper iPad 2 may be extinguishing Kindle Fire sales

Summary: The number of Kindle Fires shipped is down -- way down. Is Apple's recent price cut on the iPad 2 to blame?

SHARE:

Last holiday's breakout hit, Amazon's $199 Kindle Fire tablet, hasn't been faring as well since January 1. In fact, the drop off in units shipped has been dramatic: from 4.8 million Fires in Q4 2011 to around 750,000 in the first quarter of 2012.

While unit shipment numbers sometimes don't tell the whole story, those numbers definitely point to a downward trend for the Fire, which is the only Android-based tablet that has competed well against the iPad. And that could now be its problem.

AllThingsD speculates that one of the difficulties the Fire may now be facing is that Apple sliced the price of the iPad 2 to $399 when it announced the "new iPad." While that is still much more expensive than the Fire, people may be saving up and then splurging on the bigger iPad 2 instead of settling on the smaller Fire. Market research firm IDC found that the Fire's market share in tablets shipped in Q1 slipped to 4 percent while the iPad overall jumped to 68 percent.

One way to turn this trend around would be to release a new Fire, perhaps in a 10-inch form factor at a superior price point ($299). There have been rumors that Amazon is working on new Fires, but there's been no official word from the company. The one piece of good news for the Fire is that no other Android tablet has been able to make a meaningful dent in sales at all.

It's hard to believe that the Kindle Fire was such a good holiday present that it can't sell well the rest of the year. Why do you think its market share has dropped so dramatically? Have you purchased a cheaper iPad 2 instead of the Fire? Let us know in the Comments section below.

Topics: Tablets, Hardware, iPad, Laptops, Mobility

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

89 comments
Log in or register to join the discussion
  • Sales have dropped off after Christmas?

    Alert the media!
    Your Non Advocate
    • I know. About the only sales that rise up after Christmas

      are sign ups at Jenny Craig and Weight Watchers.
      William Farrel
      • iPhones sold more after Christmas

        Apple sold 18.6 million iPhones in Q1 2011 compared to only 16.2 million during the 2010 Christmas quarter.

        Also, there was one less week in Q1 2012 than Q4 2011 so the per day rate of sales of iPhones this last quarter was actually greater than that during the Christmas quarter.

        The iPod has always doubled sales over the Christmas quarter, so that does drop, but the Kindle Fire plunged by 84% to only 16% of the sales post-Christmas.

        That's not seasonal, that's terminal.
        Melciz
      • @Melciz

        Kindle fire sales for Q1 2012 are up %100 compared to kindle fire sales from Q1 2011.
        mrefuman
      • @Mrefuman your maths is off

        @mrefuman,
        I think you mean Kindle Fire sales are up an infinite % year over year. *rolls eyes*.
        Melciz
  • Are not the expert "guessers" supposed to take into account

    the expected After Christmas Slump? If it falls beyond their expert guess then there is a perceived problem and someone or something has to be blamed? In other words it's all just a huge guess right?

    Pagan jim
    James Quinn
  • Kindle Fire and iPad are very different

    The Kindle Fire is an eReader that does some multimedia; the iPad is a multimedia device that you can use for reading. The Kindle Fire fits nicely into the handwarmer pocket of my sweatshirt, and I take it places that I wouldn't take an iPad. They are more complementary than competitive.
    Reality-based
    • That's what I have said since before the Fire hit

      They are very much complementary devices. My wife has an iPad and a Fire. For reading she turns to the Fire but for most everything else she turns to the iPad. Including her I know 4 people with both and their usage patterns are the same.
      non-biased
  • It's still relevant...

    the key word is [i]marketshare[/i]. It doesn't take a genius to know sales slip post holiday season, but that doesn't explain away the drop in [i]marketshare[/i]. The drop in Kindle Fire's marketshare while the iPad's share increased indicates that the decrease in overall tablet sales wasn't proportionate between Apple and Amazon's tablet offerings (and possibly others not mentioned).

    Whether it's due to the drop in the iPad2 price or the possibility that the Kindle was just one of those one time holiday wonders due to being a new product, who knows, but marketshare has shifted for some reason, and that's not just due to a change in season.
    TroyMcClure
  • The old shipments vs sales bugaboo

    Yes, Virginia, sales slow down after the holidays. The issue here isn't the direction, it's the magnitude: 5 million units to less than 1 million. That's not just a lack of holiday gift-giving. It's something else.

    The question is how strongly linked shipments and end-user sales were in Q4. Since the KF had no history, it would have been easy to make a forecasting mistake, order waaaaay too many, and then not need many in Q1 as you worked down the inventory from the first build.

    I wouldn't conclude anything about KF end user sales until we see more data.
    Robert Hahn
  • I think it's pretty simple ...

    The Kindle Fire was new and exciting, pushed heavily by Amazon on all the media outlets. So lots of people bought it for the holidays. However, once it was out there, people may have found that it didn't live up to their expectations - either screen size, or available apps, or user interface. Initial sales were driven by lots of marketing; however, to get continuous sales you need to have good user experience and word of mouth. I don't know if the Kindle Fire has been getting the necessary "buzz" from users to keep sales at the initial levels.
    Unusual1
    • There could be something to...

      the theory that the Q4 sales were aided by the new product release and related marketing push which aligned with the holiday shopping season. I doubt it was coincidental they decided to release it in time for Xmas sales, but now it seems as if it's struggling to keep it's momentum in regard to marketshare.

      Also, I wonder if keeping the Kindle naming convention hurts it, given how "Kindle" conjures up visions of an eReader as opposed to a full tablet.
      TroyMcClure
      • The Kindle branding is a major part of its early success..

        aside for its price. That would be my guess. Kindle is a recognized and trusted brand, Android not so much on tablets. The general consumers are still unsure about all these alternative Android tablets that's not an iPad. The Kindle brand conjures up Apple-like ease of use, friendly device, solid ecosystem. I think it was brilliant of them to use the Kindle branding for the Fire.
        dave95.
    • Another theory ...

      The Kindle Fire was a cheaper present to give than an iPad. You could buy more for more people.

      After the gift-giving season, it keplunked because people who were buying for themselves chose the iPad, for whatever reason (informed, misinformed, independent-minded, sheeple, etc.).
      harvey_rabbit
      • Word of mouth too

        And iPad owners are for the most part excited about their device. They love it and they tell other folks how much they love it.

        I work at a company with quite a few tablet users. This is how it breaks down as far as what I hear around the office...
        1) about twenty iPad owners... they talk about their iPad constantly... "It's great!"
        2) about three Android owners... they rarely praise their tablet. If they do it's stating why they like it, but are not all that persuasive.
        3) Several Kindle owners (?)... not sure if any are a Fire or not, I've never heard any talk of their device... only talk about the Book They Are Reading!!!! It's the book, not what it's being read on.
        camcost@...
      • Out of those 3 groups, which got the better device?

        The Kindle owners. Why? Because clearly the device got out of the way letting them enjoy what the device gave them access to. You don't buy a device for the joy of owning the device. You buy a device because it allows you to accomplish a goal.

        If the Kindle owners don't talk about the device and only about the book, it means the Kindle was designed absolutely perfectly. I would be suspicious of anyone who told me they "loved" their iPad (or Android, or any other device).
        toddbottom3
      • Why I choose iPad over Kindle, Nook, and other Android devices

        It was just a simple matter of what I wanted a device to do. I will NEVER purchase a device which can only do one thing, and thus I avoided both the Kindle and the Nook. When looking at several Android devices, the interface just seemed too clunky and betaish and not worth the time to look at further. I won an iPad last year and decided to evaluate it against using my notebook computer, what I found out is that the iPad was capable of accomplishing 90% of what I was using my notebook computer to accomplish and the other 10% I did not perform very frequently while mobile. The great thing about the iPad is that I can get the same Kindle and Nook content on my iPad in addition to the bookstore from Apple. The iPad allows me to take notes in classes and meetings. I have upgraded from using paper about 15 years ago and I will NOT be downgrading back to paper! Now I can actually perform some of the 10% on my iPad by having remote access to my workstation at work, but it does take a little longer due to the touch screen interface. My goal was to minimize the devices that I am carrying with me, and purchasing the iPad allowed to carry only the iPad to work, and leave all the mouse, power supplies, and carrying cases at home. I have subsequently given my notebook computer away and so now I just use my iPhone and iPad as my mobile devices, and just use a Mac mini as my desktop of choice. From my point of view, I see the notebook computer as a dying technology soon to be replaced by tablets.
        jfreedle2@...
      • Sad life or sad argument?

        So toddbottom, which is it, do you have a sad life or did you use a really sad argument? Many items I buy such as vehicles are selected not because they get out the way and let me achieve my goal of driving to work or somewhere else, they are selected because I enjoy driving them more so than something else. Same goes with my iPad, I enjoy using while it allows me to accomplish what I picked it up to do. So which is it, you have a very sad life only selecting items to get something accomplished versus actually enjoying using them or just a sad argument in a lame attempt to knock the iPad. Actually, now that I think about it I would bet on both since you obviously have no life based on how much time you allocate to bashing anything Apple.
        non-biased
    • Lots of A&P to Befuddle and Beget the Impulse Purchase

      Yes, with the heavy marketing push, sales are driven to feverish and artificial pitch, which dries up without. The product does not live up to the hype, may disappoint, and how many were stocking stuffers anyway?

      Advertising and Promotion (A&P) drives impulse purchases, and this is just like the blitz we get from political candidates prior to the vote. Overwhelm, saturate, befuddle, to beget that impulse sale or cast that vote. Buyer's remorse may lead some to return, but no matter, unless real junk is being purveyed. At least with products, there may be a refund, or some recourse. With a politician, there's no recourse after the sale.
      Backbutton
  • Cheaper iPad 2 may be extinguishing Kindle Fire sales

    The problem I see besides being the after holidays slump is that you don't give the number of iPad2 sales. Are they down or are they up since the holidays? It really has nothing to do with the price point since your saving up for it anyway you will be more tempted to save $829 for a brand New iPad.
    Loverock Davidson-