Yesterday, colleague Ed Oswald gave four very good reasons why Target is dumping Amazon ereaders and tablets. For Kindle Fire, perhaps there is another: It's not selling. Today, IDC reports that Amazon tablet shipments collapsed during first quarter, all while iPad lapped them up.
"Apple reasserted its dominance in the market this quarter, driving huge shipment totals at a time when all but a few Android vendors saw their numbers drop precipitously after posting big gains during the holiday buying season" said Tom Mainelli, IDC research director. Apple's media tablet share rose to 68 percent from 54.7 percent during fourth quarter. Kindle Fire's shipments collapsed -- from 4.7 million to around 700,000 quarter on quarter. Amazon's share dropped from 16.8 percent to 4 percent, placing it third to Samsung.
Target confirmed on Wednesday earlier reports that it is discontinuing sales of Amazon products, most notably the Kindle, starting in Spring 2012. First reported by The Verge overnight Wednesday, the move is a hit to Kindle's retail store strategy overall and effectively ends a long-term partnership between the two companies.
Amazon powered Target's website up until last year, and Target was the first to carry the Kindle at retail back in June 2010. The Kindle Fire was Target's best selling tablet on Black Friday last year, but that didn't stop the retailer from kicking Amazon to the curb.
The best-designed Android tablets you can buy today aren’t the sleekest or the sexiest. They’re not the most powerful. And they don’t boast the largest or brightest displays. What they do have, however, are sales. The tablets? The Kindle Fire from Amazon and Barnes & Nobles’ Nook Tablet.
On a runway awash with thin, pretty models, it’s easy to overlook this pair of plain Janes. But don’t. They are two of the top three largest-selling Android tablets on the market. And their formula should serve as a model for how to succeed in this market if you’re a supplier that’s lacking a throng of breathless fanatics aching to snap up anything you sell.
For a platform that was built to handle text documents, Amazon Kindle's support for non Kindle-formatted files has been nothing short of atrocious.
Wirelessly sending documents to a Kindle required that they be emailed to a Kindle email address where they'd be converted and sent to the user's Kindle library; or they could be uploaded directly to Kindle e-readers or tablets via USB, but with spotty usability.
Google on Tuesday finally rolled out the long-rumored Google Drive cloud storage platform to compete with the likes of Dropbox, Skydrive, Box, iCloud, and all the rest.
But let's put cloud storage competition aside for a moment. When Google Drive was announced, I was immediately reminded of a recent quote in the New York Times:
Analysts love to make predictions. It's a no-risk gambit, because the forecasts are years away and nobody remembers if they're wrong. After thrice predicting that Windows Phone would beat out Apple's iOS by 2015, IDC has another for the same year: Android media tablet shipments will exceed iPad. By that reckoning, the firm predicts that Google's mobile OS will dominate the two major cloud-connected -- post-PC, if you insist -- device categories (the other being smartphones).
"As the sole vendor shipping iOS products, Apple will remain dominant in terms of worldwide vendor unit shipments", Tom Mainelli, IDC research director, says. "However, the sheer number of vendors shipping low-priced, Android-based tablets means that Google's OS will overtake Apple's in terms of worldwide market share by 2015. We expect iOS to remain the revenue market share leader through the end of our 2016 forecast period and beyond".
Amazon's fourth quarter results missed targets, despite strong sales of the Kindle Fire. It is these users that will begin to pad the company's earnings, however, validating Amazon's strategy of selling Fire at a very low margin and then making up the profit through entertainment content sales.
Amazon saw its profits plummet, reporting net income of $177 million in the fourth quarter of 2011. This was down sharply from a year earlier, when the retailer reported income of $416 million. Revenue was up 35 percent however, to $17.4 billion.
That's a dramatic change from just a few months ago and, perhaps not coincidentally, before new Nooks and Kindles lowered price of entry for both categories. Between December and January, the number of Americans owning one of the devices rose to 29 percent from 18 percent. During the same time period, the number owning a tablet rose to 19 percent from 10 percent, which is the same rise for e-book readers.
Pew Internet released the data earlier today, based on surveys conducted in mid December and early January. "These findings are striking because they come after a period from mid-2011 into the autumn in which there was not much change in the ownership of tablets and e-book readers", according to the report. "However, as the holiday gift-giving season approached, the marketplace for both devices dramatically shifted". As recently as August 9 percent of Americans owned e-book readers and 10 percent tablets.
Sony Electronics rang in 2012 with a surprising discount that may foreshadow much about the tablet market this year. Overnight I received email from a Sony spokeswoman saying the company "has permanently dropped the price of the Sony Tablet S by $100 starting today". This follows what seemed like a temporary $50 discount right before Christmas. If you paid $499.99 or $599.99 before Santa's sleigh ride, 16GB Sony S is now $399.99 and 32GB 499.99.
SonyStyle Store doesn't yet list the new pricing as permanent, merely "save $100 instantly". "On top of these savings, Sony is also currently offering (for a limited time) a store credit and five free Video Unlimited movie rentals, five free PlayStation Store game downloads and 180 days of free Music Unlimited service with the purchase of a Tablet", the spokeswoman says.
Leading online retailer Amazon.com has never been forthcoming with exact sales figures for its Kindle e-reader platform. Instead, the company uses ambiguities like "the current generation Kindle is selling twice as many units as the previous generation," or that the current generation is the fastest-selling model yet.
For the first time, Amazon has given a more concrete idea about how many Kindles are selling. In a roundup of its 2011 holiday season sales, the company said it was selling "well over" one million Kindle devices per week in the month of December, and that the best-selling, most gifted, and most wish-listed product across all of Amazon's product listings is the low-cost Kindle Fire tablet.
If you ever wondered what tablet comedian Conan O'Brien uses, perhaps this video about Amazon Kindle Fire will tell you. One commenter to the comedic segment asked: "I wonder how much Apple paid TBS for this one?" I wouldn't go that far.
You will laugh. Surely iPad fans will chuckle most.
Media tablet shipments missed IDC's third-quarter shipment projections. Meanwhile iPad lost market share; IDC forecasts greater declines for Q4. The culprit: Amazon Kindle Fire (with a little help from Barnes & Noble Nook). In the battle of price, and vertically-integrated content platforms, Amazon is ready to take a bite out of Apple. That brings me to the question of the day: Did you or do you plan to buy Kindle Fire, or even Nook, when previously considering iPad 2 this holiday? Please answer in comments as well as taking our buying poll.
Kindle Fire's big advantage is price -- $300 less than the cheapest iPad 2, at $199. Amazon and Apple compete head-to-head in ebooks, music and movies and curated applications stores. Both command hugely popular brands. Kindle Fire is smaller and doesn't pack a camera, but less also means lower price -- and single one at that. iPads range from $499 to $829.
A number of Kindle Fire users are reporting Internet connectivity issues that are preventing them from browsing the web, according to posts to Amazon's community forums. Devices connect to WiFi but not to the Internet, or speed drops dramatically.
The trouble was widely reported today and attributed to WiFi. However, based on a cursory technical review and thorough exploration of forum posts, BetaNews sees a likely different cause: Some kind of breakdown between Amazon's Silk browser, Amazon's supporting web services and local ISP connection -- relating to server caching, we suspect.
So says IHS iSuppli, which released projections for fourth-quarter tablet shipments on Friday. The firm predicts Kindle Fire will take about 13.8 percent of the market after having no share in the previous quarter. Kindle Fire went on sale at the end of September, with Amazon taking preorders right away but shipping November 14.
iSuppli expects Amazon to ship about 3.9 million units during the quarter, taking second place and all but tripling Samsung tablet market share. Kindle Fire's success comes at the expense of Apple as well as Samsung, however.
Amazon is leaning on its strengths in procurement in order to make the Kindle Fire as cheaply as possible, IHS iSuppli says. The firm has begun its teardown of the device and says that the components inside offer little surprises from the virtual teardown it released in September. Each Fire costs Amazon $201.70 to build, meaning the company loses $2.70 on each device.
Previously, IHS guessed that the Fire had cost $209.63 to build, but that was based on what it new of Amazon's suppliers and not an actual teardown of the device.