Why Amazon's tablet share is poised to pop

Why Amazon's tablet share is poised to pop

Summary: Amazon's tablet market share surged in the third quarter, but an international roll-out and better Kindle Fire HD line-up should keep the gains rolling.

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Amazon had 9 percent of the tablet market in the third quarter and further gains are likely as its Kindle Fire HD line-up starts shipping.

IDC's tablet share statistics highlight the following:

  • 27.8 million tablets shipped in the third quarter;
  • Apple shipped 14 million tablets, good for 50.4 percent market share;
  • Samsung's market share was 18.4 percent courtesy of the Galaxy Tab and Note;
  • Amazon's third quarter market share was 9 percent, up from 4.8 percent in the second quarter.
  • That last point is worth pondering. Amazon's market share surged because it began shipping the new 7-inch Kindle Fire HD late in the quarter. Those shipments were only in the U.S.
  • As Amazon starts shipping the 8.9-inch Kindle Fire in November, it'll have a full arsenal of tablets. It's highly likely that Amazon's market share will go double digits---say 12 percent to 15 percent.

Earlier: Apple sells 3 million iPads, iPad mini tablets in first weekend | IDC report: Tablet market grows nearly 50 percent, Apple loses iPad share | IDC: iPad retains tablet share crown, Android rapidly catching up

kindlefirehd

Here's why Amazon's tablet share is going dramatically higher:

  1. Amazon's Kindle Fire is going international. The e-commerce giant plans to roll out its tablet globally. The market reach is limited relative to Apple, but Amazon will have enough distribution to gain share.
  2. The promotion and distribution equation. Amazon can use its home page, its customer lists and recommendations to push the Kindle Fire HD. Amazon will also aggressively market its Kindle Fire HD relative to the iPad mini.
  3. Apple's iPad mini doesn't deliver a death blow. At $329 for the iPad mini, Amazon can pitch lower prices balanced with features and services. In other words, the iPad mini, iPad and Kindle Fire HD are likely to play to different audiences. 

What remains to be seen is whether Amazon can deliver a tablet product cadence that can support share gains throughout the year. Samsung and Apple are sure to keep devices coming and there will be a bevy of Windows 8 devices hitting the market.

Nevertheless, Amazon is likely to enjoy a market share pop in the fourth quarter.

Topics: Mobility, Amazon, Android, Tablets

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12 comments
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  • IDC includes the Note?

    Seriously. IDC now counts the Note as both a tablet AND a phone?

    I guess that is one way to try and make a bad situation look good. So basically, the iPad's still has 60+% market share of the tablet space.
    Bruizer
    • The Note

      comes in a 10", tablet, variety.
      Michael Alan Goff
  • Razor And Blades strategy

    The theory is, if you give away the razor, you can make up the loss by selling lots of blades. The blades in this case is the Amazon ecosystem (ecommerce store, Books, Apps, Music etc.). Amazon is losing money on each Kindle Fire sold by pricing it so cheap, and are hoping to make it up with their stores and services. We shall see how well this strategy works for them in the long run. I think it's bold and risky, but at the same time the only way to truly compete against the iPad long term. Or at least have a presence in the market when all other competitors fail.

    For other competitors, there's no such leverage of an ecosystem they can call their own. Google owns that. So they have to make revenue on the hardware only in an already aggressive/competitive market. Good luck.
    dave95.
    • Yeah...

      I suspect that if Google wants to really stimulate the Android tablet market they're giong to have to share Google Play store revenue with manufacturers. Not an outrageous proposition, really.
      dsf3g
      • Unlikely

        It's very unlikely Google will share anything with anyone. They haven't done anything like this for all their existence. Google is a blackhole.

        Besides, Google's customers are the advertisers and the non-name agencies.
        danbi
      • Revenue to thin to share

        Plus hardware is where the money really is and right now Apple is the only one really making any meaningful revenue on hardware.
        dave95.
  • No thanks, I don't need a tablet pitching me an ad every time I use it.

    It an Amway tablet!
    GoPower
  • Questionable statistics

    What is the source of IDC data. The last time I checked, neither Amazon, nor Google, nor Samsung actually provides such sales data.

    Also, with Android leading the smartphone segment in terms of market share and with Apple supposedly down to 50%, why does iOS account 60% of all mobile web traffic? Do people buy these other devices then just discard them later once they realize they're not very usable?

    With Amazon, it sort of makes sense. It's more likely that they will buy an Amazon "tablet" and just use it as an e-book reader, etc. rather than a general purpose tablet. However, that seems less likely for other tablets. Still, if history is our guide, Amazon will see a spike in sales for the holidays. Let's face it, they have a great price point - a kindle makes for a more affordable gift. However, I'd expect sales to drop of sharply into 2013 as they did last year for Amazon after the holiday quarter.
    techconc
    • "Why does iOS account 60% of all mobile web traffic?"

      I usually have my Android phone set to display the desktop version of web sites. With that option selected, checking online for the user agent suggests the OS is Mac OS X 10.5.7. I'm sure that accounts for a proportion of the discrepancy between Android/iOS sales and reported mobile web use.
      DJL64
  • The e Commerce affect.

    The core question is do you believe that consumers will increase their buying via the internet and if Amazon will attract buyers over the traditional big box players. The second question is are buyers informed or impulse based on reputation or whatever. My sense is consumers are becoming more tech savvy and as such will look at the full array of products. My sense is that Amazon will pop in sales and Apple will be happy with higher mark-ups.
    oldgeek143
  • Just bought a Kindle Fire HD

    I like it. The hardware is great for $200. Great screen, great size, and it is fast. I don't like the small on-off buttons and the hard to use volume buttons, but otherwise no complaints about the hardware.

    The ads are not real annoying and are sometimes interesting.

    The real problem is the app store. The kindle app store is about 1/3 the Google app store. You get the major apps but you will miss a lot of favorite apps. Your choices are root the system and possibly break it because their is no reset to original settings or live with a very limited list of apps. No flash player so a lot of web sites will not work. The browser is OK but I miss things like editing the bookmark list. The user interface is akward because it makes the last document or webpage pop up when you start it up. This is not always a good thing because I may want to keep these things private. It needs more privacy settings or the ability to set up multiple users.

    Also I can't believe that I am saying this but I miss iTunes. It is a sorry program but it keeps everything synchronized and backed up.

    Overall I am happy with the $200 purchase but i still want an ipad mini. I just want the second gen with the newer processor, display at a slightly lower price. My main use for the Kindle is reading books, watching video, and occasionally using an app or game. It is OK for the money. If Amazon fixes the app store and gives more control over the user interface then it would be an awesome deal.
    KLS 12.5
  • Kindle HD 8.9 would be great...

    If it wasn't such a closed system. Amazon not only has less apps, they also charge more for every app. Their Prime video is awesome, but they send mixed signals by making an app for iPads that let you use the service.

    If they opened up the system, say, with a novice setup that kept it wrapped in their Amazon only interface, and an advanced user option that allowed for customization and an open android experience, I have no doubt that Amazon could sell as many tablets as they could make.
    Ross Voorhees