An iPad Mini Dud Could See Amazon Kindle Gain Market Share

by Trefis Team
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Amazon (NASDAQ:AMZN) bet big when it launched its Android based Kindle tablet range and seems to be winning. The company recently revamped its entire Kindle range and introduced a 8.9″ Kindle Fire HD tablet to re-position itself as a direct competitor to the market leader Apple‘s (NASDAQ:AAPL) iPad. With Kindle Fire HD scheduled to go on sale in late November, Apple launched its own offensive and introduced a 7.9″ inch tablet called Apple iPad mini. The new Apple launch though well received, fell short on consumer expectations and this will most likely result in a lot of people purchasing Amazon’s tablet instead. Amazon went on record claiming, “Wednesday was the $199 Kindle Fire HD’s biggest day of sales since launch and up 3x week over week” a day after the iPad mini was announced. [1]

See our full analysis for Amazon’s stock here

Revamped Kindle Range Stands Up To iPad Mini

The 7″ tablet market heated up recently with Google (NASDAQ:GOOG) releasing its own Nexus 7 tablet and Apple launching iPad mini. Priced at $329, the Apple iPad mini could not deliver the expected death blow to the 7″ segment. Priced at a considerable markup to other devices in the segment and with similar or slightly better features, it fell short of customer expectations. We believe that Amazon’s blossoming content store, improved UI on the revamped Kindle range, good technical specifications and the ease of accessing its market place could see it attract substantial customers as the tablet market grows.

The overall tablet market grew 49.5% in the third quarter with Amazon commanding a 9% share in the 27.8 million tablets shipped worldwide. [2] Android based tablets gained considerably at the expense of Apple’s market-share. While, this could be a result of people awaiting a new iPad and iPad mini launch, the iPad mini falling short on consumer expectations could result it in being a long term trend.

Currently, the Kindle device range has limited geographical presence. With Amazon planning on rolling out Kindle Fire tablets globally it will soon have enough distribution to gain market share. Also, the company has been aggressively promoting the Kindle range on its home page to push the Kindle Fire HD. Going forward, we expect the company to continue to aggressively market its Kindle Fire HD relative to the iPad mini. However, it will not be easy for the company as it will face tough competition from Microsoft (NASDAQ:MSFT) Surface device range and other Windows 8 based tablets that Samsung and other device manufacturers are planning.

We currently have a $218 estimate for Amazon which is 8% below the current market price.

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  1. Amazon Says Kindle Withstood iPad Mini Assault, All Things D, October 2012 []
  2. Android Tablets Gain Momentum in the Third Quarter, Expectations Remain High for the Holiday Quarter, IDC, November 2012 []
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  • commented 5 years ago
  • The new Mini iPad isn't the only new tablet released this month -- the Novo 7 Flame 32GB also just launched - which offers an impressive 7 Inch tablet priced at $189 at a site called TabletSprint -- The Novo 7 Flame Android tablet definitely has a "cool factor" and is sleek and compact with a brush metal back cover and offers a 1280x800 High Resolution screen, Dual Core CPU, 32GB Memory, MicroSD portable storage, an HDMI connection to your TV with full 1080p (HD) that's great for movie downloads, a 5 megapixel Rear Camera with AF & LED Flash and a 2 MP webcam; Plus great connection - Bluetooth, WiFi, Ethernet, and options for 3G. The tablet is made by Ainol Electronics, which received a "Best Tablet of the Year" award at CNET Consumer Electronics Show 2012. TabletSprint also offers something pretty exciting with each tablet, a free 3G/4G 500MB monthly data plan with full internet access/VoIP calling in the U.S. -- worth checking out and comparing --
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  • commented 5 years ago
  • How can you call the iPad Mini a failure when it sold more units in three days then the Kindle HD did in its last quarter?