Kindle Fire breaks into the lead

According to the results of the fourth quarter of 2011, Kindle Fire will take the second place in the global tablet market.

According to the IHS news agency, Amazon plans to ship 3.9 million of its tablets in the current quarter. This is 13.8% of shipments of all tablets in the fourth quarter. For comparison, Samsung, previously considered Apple‘s main competitor in this market, will ship only 1.37 million tablets in the last three months of 2011, i.e. 4.8% of the total. The iPad 2 has a leading position – its market share is 65.6%.

Such success of the tablet from Amazon is largely due to the low price of the device. It is only $199. This price became possible due to the original business model chosen by the company. While most manufacturers profit from the sale of the devices themselves, Amazon loses on the sale of each of its Kindle Fire. The cost of its production – 201.7 dollars – is higher than the market value. The company’s profit will ensure the use of Kindle Fire as a platform for selling real goods. Also, do not forget that all applications available for purchase by the user of the gadget (including books and movies) are purchased directly from Amazon. This model is in many ways similar to the one used in the game console market, when the manufacturer loses on sales of the devices themselves, but earns on games for them.

In connection with the impressive debut of the Kindle Fire, analysts expectedly changed their forecasts for total shipments of tablets for 2011. Instead of the 60 million predicted in August, 64.7 million. In total, the market growth over the past year will be 273%; for comparison, about 17.4 million tablets were sold last year. IHS analysts have also corrected their forecasts for the future. Now, according to their estimates, in 2015 it is expected to ship not 275.3 million, as previously predicted, but 287.2 million devices.

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