We are well aware that Amazon has come to completely dominate the Android tablet market with their Kindle Fire and that this has been accomplished in an amazingly short amount of time. Unfortunately for Amazon, market research firm IDC has released a report of the Android tablet market shrinking at a noticeably higher rate than the tablet market in general. This could prove problematic as a trend, but the situation may be even more complicated than that.
IDC’s report indicates a bit of a slump as we come into 2012. Total shipments for tablets are coming in below expectations, especially compared to the previous quarter’s record breaking sales numbers. Apple’s new shipments are up to 68% of tablet sales compared to just 54% at the end of 2011, indicating that Android has lost a bit of traction despite the lack of reason to get excited about the iPad 3. Much of this, according to IDC, may be attributed to Apple’s keeping the iPad 2 around as a cheaper alternative to their newest offerings.
Where many are taking this as a death sentence for the Kindle Fire and Amazon’s tablet prospects more generally, there have also been issues raised with IDC’s research methods. Namely, they are making their determinations based off of total shipments from factories to warehouses and stores. This is itself a problematic point to raise since it calls into question IDC’s analysis of Q4 2011, but does make sense. There were obviously going to be plenty of retailers that still has stock left over from the holiday season, so maybe it would be smart to account for that. Even so, sales almost certainly dipped compared to the iPad.
Looking forward to the year ahead, this doesn’t start Amazon off on a high note. The Kindle Fire was just their first generation product, however, and we are expecting the next generation in a matter of months. It will likely be larger, or at least have the option of being larger, and will definitely be more powerful. Pricing can be expected to remain highly competitive. This is certain to lead to a resurgent interest in the Android segment of the market even leaving aside such strong offerings as the new Samsung Galaxy Tab 2 and Google’s anticipated budget tablet.
Larger screen or not, it is hard to say in advance if Amazon has a Kindle Fire 2 vs iPad 3 comparison in mind. It is even harder to tell if this would be a smart move at this time. Both Android and iOS sales may be hit hard toward the end of this year with the introduction of Windows 8 tablets to the competition. Since these will certainly be all-purpose tablets along the lines of the iPad, it might be more effective for Amazon to continue building the Kindle Fire’s niche as a consumption device that serves specific needs at a lower price than the alternatives.
The bottom line is that right this minute it is doubtful Amazon has anything to be worried about with regard to the Kindle Fire. Things are going well even if there’s a bit of a slump right now. The big challenge will come later this year when Android is hit from both sides by iOS and Windows 8 and consumers are left to decide which will be their long-term choice.