By Danielle Kucera - Dec 3, 2011 1:31 AM GMT+0700
Amazon.com Inc. (AMZN)’s share of the tablet computer market will surge to 14 percent this quarter as consumer demand catapults the Kindle Fire to the No. 2 spot after Apple Inc.’s iPad, according to research firm IHS Inc. (IHS)
Amazon will probably ship 3.9 million units of the Fire in the final three months of the year, IHS said today in a report. After hitting store shelves on Nov. 14, the Kindle Fire has surpassed more established products from Samsung Electronics (005930) Co. and Barnes & Noble Inc. (BKS) in vying with the iPad, which will ship an estimated 18.6 million units, IHS said.
Jeff Bezos, chief executive officer of Amazon, stoked demand for the Fire with low prices and promotions on his company’s site, the world’s largest e-commerce provider. While IHS says Amazon is losing money on every $199 tablet it sells, Susquehanna Financial Group LLP said Nov. 15 that each machine may generate $384 in revenue for the company when accounting for sales of associated digital music, books and movies.
“Nearly two years after Apple Inc. (AAPL) rolled out the iPad, a competitor has finally developed an alternative which looks like it might have enough of Apple’s secret sauce to succeed,” Rhoda Alexander, a senior research manager at IHS, said in the statement.
Bezos is counting on revenue from that content to counter the operating margin contraction that results from selling the product at a loss.
Global tablet shipments will be about 64.7 million this year, compared with 17.4 million in 2010, according to IHS. The firm ramped up its forecast for shipments by 2015 -- to 287.5 million from the previous projection of 275.3 million.
The Fire has a 7-inch display, smaller than the iPad’s 9.7- inch screen. The device runs on Google Inc.’s Android software, have a dual-core processor and offer Wi-Fi connectivity, Amazon said.
To contact the reporter on this story: Danielle Kucera in San Francisco at dkucera6@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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