The recent release of Amazon’s Kindle Fire could be about to shake up the tablet market in a big way. Amazon has now increased orders for its new device to 5 million units by the end of the year, according to Taiwanese publication DigiTimes. The company raised its initial order from 3.5 million to 4 million during the third quarter, and has had to do so again in the face of even greater than expected demand.
If it sells all 5 million units, Amazon would have an 8% share of the 2011 tablet market, based on recent Gartner estimates. These are impressive figures for a device that only begins shipping today, and have taken even Amazon itself by surprise.
CEO Jeff Bezos said in a recent press release that the company will be building “millions more” Kindle Fires than originally planned.
Barnes & Noble Joins The Fray With Nook Tablet
Barnes & Noble has also taken a leap into the tablet market with the announcement just last week of its new Nook Tablet. The specifications of the device are broadly similar to the Kindle Fire, and it is being released at roughly the same price point: $249 for the Nook Tablet versus $199 for the Kindle Fire.
Both devices are considerably cheaper than the iPad and, according to estimates, are being sold at more-or-less cost price, possibly even at a loss. Analysts believe that both Amazon and Barnes & Noble intend to make their money selling applications and content rather than hardware.
Eating Into Apple’s Share Of The Pie
The high sales predicted for the Kindle Fire could slow the vertiginous growth of Apple’s iPad, which currently accounts for 73% of all tablet devices sold.
A recent survey carried out by ChangeWave said that 5% of people it interviewed had either already pre-ordered a Kindle Fire or were very likely to purchase one soon. This compares to 4% of respondents who said they were planning to buy the iPad 2 in a similar survey conducted at the time of the release of the Apple device.
Of the 5% who intend to buy a Kindle Fire, more than 25% said that in doing so they would delay the purchase of an iPad.
Increasingly Fragmented Market
High-ranking Apple executives recently stated to an analyst from Barclays Capital that they are not concerned about these new devices, which they see as fuelling “further fragmentation in the tablet market.”
Both the Kindle Fire and the Nook Tablet run on a highly-customized version of the Android platform, and will be selling device-specific apps and content through their own stores. Such fragmentation, Apple believes, “could drive more consumers to the stable Apple platform.”
Key Statistics – Global Tablet Market (source: Gartner)
- Tablet sales are forecast to reach over 63 million units in 2011, up 264% on last year, and are predicted to hit over 320 million units by 2015.
- Analysts estimate the Apple iPad will account for 73% of tablets sold this year.
- Tablet devices running Google’s Android operating system are expected to account for 17% of all devices sold during the same period, a rise of 3% compared to 2010.
- Over the next few years, Android should make more significant inroads into the iPad’s market share, which is forecast to fall to around 45% by 2015.