Predicted iPad 2, Kindle Fire Holiday Sales Showdown Not the Main Event

By Wayne Rash  |  Posted 2011-11-21

Predicted iPad 2, Kindle Fire Holiday Sales Showdown Not the Main Event

Ladies and gentlemen, in this corner is the undefeated champion of the world, the Apple iPad. In the opposite corner is the challenger, the lightweight but scrappy Amazon Kindle Fire. Come on out and shake hands, then get ready to, er...hmmm not exactly rumble. Oh, I know, get ready to eat market share! And now the bell!

And thus starts the widely predicted holiday season battle between the Apple iPad and the Amazon Kindle Fire. But despite the predictions, it won't happen that way. There will be lots of iPads sold and the wide availability of discounts will attract buyers while they empty warehouses in preparation for the iPad 3. The Kindle Fire will sell like hotcakes at a penguin watchers' convention and won't need discounts because it's already being sold for less than it costs to make.

Customers will welcome the deals of course. Cheap electronics are always better than electronics that aren't cheap. But the battle isn't between the iPad and the Kindle Fire. The two tablets exist in alternate universes and it's unlikely that sales of one will have any relation to sales of the other. If there's any effect at all, it's more likely that the iPad and the Fire will help expand consumer interest in tablets in general.

The reasons are fairly simple. The Kindle Fire is a tablet that exists to help its owners consume content, it has a price point of $200 and it's designed to let its owners read content from Amazon, listen to music from Amazon and watch movies from Amazon. While it's much more than an e-reader, it's not a general purpose tablet. The people who buy this aren't looking for an alternative to the iPad. They're looking for an upgrade to their old Kindle.

The iPad costs at least two and a half times as much, and while it's generally available at a $50 discount off of its $500 minimum price, it can't be considered cheap. And while an iPad can work just fine as an e-reader, it does a lot more than that. In fact the iPad is more like a general purpose computing device, which is why it's driving the final nails into the coffin of the netbook market.

In fact, there will be a holiday sales battle, but it won't be between the Kindle Fire and the iPad. The Kindle Fire will be taking on the latest version of the Nook e-reader while the iPad probably won't be in a real sales battle with anything. The many Android tablets introduced this fall compete more with each other than they do with the iPad.

Apple iPad 2 Will Stand Aloof From Other Contenders

In fact, if the iPad is in a battle, it's with itself. Because of the vast market share lead over everything else, Apple has to keep people from thinking about the iPad 3, due next spring, so they'll fork over their bucks for the current iPad 2. Apple has learned its lesson from the iPhone 4 sales slump in September as customers held off buying a new iPhone because they thought the iPhone 5 was about to be introduced.

Meanwhile, back to the e-reader fisticuffs. While neither Amazon nor Barnes & Noble will reveal sales numbers for their e-readers, the smart money on sales goes to Amazon. The company has been pumping out Kindle Fire e-readers as fast as it can make them, to the point that there are several reports that the device sells out in stores within minutes of its arrival. While the Nook also sells well, all appearances are that its lack of seamless integration and its less dedicated software design make it less attractive to readers.

Then there is another entirely separate battleground. This conflict involves all of those Android tablets that are being sold mostly by the phone companies. The Galaxy Tab, the Xoom and the others are duking it out for sales to people who need something that Apple doesn't provide, and are happy to get it with a two-year phone company contract. The phone company lock-in and the hefty data plan pricing may explain why the iPad isn't in this fight.

The iPad, meanwhile, really doesn't have a field of battle exactly. It's set safely apart from the other contenders. While there's some overlap between the potential customers of all three types of devices, the existence of such a robust market validates the existence of all of them. Tablets are no longer a curiosity. They are now an established means of interacting with software, the Internet and media.

What this means is that it's more likely that there will be people who buy a Kindle Fire and already own an iPad, and use each for the part of their lives where they fit the best. Likewise, there will be those who have an Android tablet and a Fire (which also runs Android, but has a different interface).

Even the 7-inch Android tablets and the 7-inch e-readers don't overlap as much as it might seem. Each has its specific purpose and customers will buy the device that meets that specific need, even if it looks a lot like their other devices. 

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