Cheaper iPad 2 may be extinguishing Kindle Fire sales

The number of Kindle Fires shipped is down -- way down. Is Apple's recent price cut on the iPad 2 to blame?
Written by Sean Portnoy, Contributor

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.

Editorial standards