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Amazon orders more Kindle Fire stock as iPad sales slow down

by Steven Williamson on 10 November 2011, 09:15

Tags: Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL)

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Costing considerably less than the iPad did at launch, Kindle Fire is looking increasingly like a serious contender in the tablet market as sales of Apple’s tablet begin to slow down and interest increases in Amazon’s 7in device.

To cope with preorder demand for US launch next week, Amazon had already upped its demand for more units of Kindle Fire from its manufacturers from 3.5 million to 4 million, and a report from Taiwanese publication DigiTimes today now reveals that Amazon has raised the order again up to 5 million units.

Research group Gartner believes that Amazon would corner approximately 8 per cent of the 2011 tablet market if it sells all five million units.

 

Meanwhile, sales of the iPad are said to be slowing down. Rodman & Renshaw's Ashok Kuma’s estimates that “iPad volumes in the current quarter will be 12-13 million units," down from previous estimates of 14 million to 15 million. Nonetheless, Amazon still has a long way to go to penetrate the tablet market. During Apple’s fourth quarter financial call last month, CEO Tim Cook said that accumulative sales of the iPad have hit 40 million units worldwide.

Amazon’s Kindle Fire goes on sale in the US on November 15 priced at $199, half the price of the cheapest iPad. A UK release date has yet to be announced.


HEXUS Forums :: 7 Comments

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Posted by Tarinder - Thu 10 Nov 2011 09:20
Bleh, I want one here. Why miss out on overseas markets?
Posted by Scarlet Infidel - Thu 10 Nov 2011 09:56
Tarinder
Bleh, I want one here. Why miss out on overseas markets?

Because they are pushing hard just to build enough units for their home market. That's what this article is suggesting surely?
Posted by crossy - Thu 10 Nov 2011 10:27
Scarlet Infidel;2176521
(Tarinder: “Bleh, I want one here. Why miss out on overseas markets?”) Because they are pushing hard just to build enough units for their home market. That's what this article is suggesting surely?
No, I see what Tarinder's getting at. With a US-only launch they're effectively missing out on the chance to generate some “buzz” elsewhere. Maybe rationing the US, and allocating some production to the EU would have been more sensible. Then the scarcity value alone will make it desirable - heck, look at what happened to the HP TouchPad's.

Interesting to hear that the iPad2 predicted sales are down - the implication is that it's the KF that's to blame, but is this necessarily the case? And what about Android tablet sales - are these also down?
Posted by bradyjames - Thu 10 Nov 2011 10:47
I'm not so sure the iPad sales are down. The quote is suggesting that estimated sales for the current quarter are lower than they had been predicting. However I believe the current quarter is still the highest volume of iPad's that Apple have sold to date. So I believe a more accurate interpretation may be to say ‘iPad sales are not increasing quite as quickly as predicted’.

Still impressive numbers on the Kindle though. It goes to show that there is a big market for tablets at a lower price point. This is not altogether surprising though. Just look at the history of PC's vs Mac's - PC's sell more volume at lower price points but ‘premium design orientated PC’s' that have a comparable price to a Mac have not been very successful. I believe this is why many vendors are struggling to compete with the iPad when they are producing Tablets at similar price points.
Posted by crossy - Thu 10 Nov 2011 11:17
bradyjames
Just look at the history of PC's vs Mac's - PC's sell more volume at lower price points but ‘premium design orientated PC’s' that have a comparable price to a Mac have not been very successful. I believe this is why many vendors are struggling to compete with the iPad when they are producing Tablets at similar price points.
Quite true - the “designer” PC's have had a problem that they've not really had anyone who could compete with the Apple “brand” - although I'd suggest that Sony have come close. Other brands, like HP for example, are still regarded as mere tools rather than something “aspirational”.

Likewise with tablets - Apple's stranglehold is such that I've even heard folks using - for example - a Motorola Xoom refer to that device as an “iPad”. Makes me wonder whether that's become as a generic term as “iPod” did for MP3 players.

Where I'll disagree is with that last statement - Apple definitely puts a healthy profit margin into their prices. So, you'll find devices that match, or exceed, the iPad2 in terms of spec for less expenditure, however none of these have the “man in the street recognition” that the iPad2 does. To sum up, other companies can produce a better product, but Apple's marketing beats them every time.

By the way, I'll not put the KF in that boat of “technically better than the iPad2” - mainly because it isn't. It's definitely a technologically poorer device, but then again, if all you want is a tablet, the fact that it's half the price (and from a recognized brand) is darned difficult to ignore. I suspect strongly that when the KF does go on sale over here that it'll sell like hot cakes.

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