Amazon's Kindle Fire will ship 3.9 million units in the last quarter of 2011, according to analyst firm IHS. That's good enough to put it in second place--behind the iPad.
Amazon's
Kindle Fire will ship 3.9 million units in the last quarter of this year,
according to a Dec. 2 note from research firm IHS. That will give it 13.8
percent of global media tablet shipments for the quarter, placing it behind
Apple's iPad
"A competitor
has finally developed an alternative which looks like it might have enough of
Apple's secret sauce to succeed," Rhoda Alexander, senior manager of tablet and
monitor research for HIS, said. "The production plans make it clear that Amazon
is betting big on the product."
In the firm's
estimation, Samsung's Galaxy Tab franchise came in third behind the Kindle Fire
and iPad, with some 4.8 percent of global media tablet shipments.
Thanks to the
predicted success of the Fire, IHS has upped its previous estimate for 2011 tablet
shipments by 7.7 percent to 64.7 million units. That represents 273 percent
growth from the 17.4 million units that shipped in 2010.
A recent IHS
teardown placed the Kindle Fire's manufacturing cost at $201.70. If that
analysis holds, it means that Amazon racks up a slight but noticeable loss
every time someone purchases a Fire for $199.
"Amazon makes
its money not on Kindle hardware, but on the paid content and other products it
plans to sell the consumer through the Kindle," Andrew Rassweiler, senior
director of IHS' teardown services, wrote in a Nov. 18 research note. "This is
a similar business model to wireless companies such as AT&T or Verizon.
They sell you a phone that costs them $400 to $600 or more to make for a price
of only $200. However, they expect to more than make up for that loss with a
two-year service contract."
That differs
from the strategies of other tablet manufacturers, who may rely far more on
margins from the devices themselves than any sort of electronic storefront. In
order to facilitate purchases, the Kindle Fire's user interface centers on a
series of tabs (such as "books") that open immediately onto Amazon's online
storefront.
In that
spirit, the Kindle Fire is designed explicitly as a consumer device, not a
business one. That could deny Amazon the corporate audience that has
increasingly gravitated toward not only Apple's iPad, but also its Android- and
QNX-based rivals.
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Nicholas Kolakowski on Twitter
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.
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