Late last year, one would have thought Amazon’s Kindle was doing very well. Yes, Apple’s iPad dominated the tablet market but Amazon could boast that the Kindle was the most successful Android tablet to date. Sales were growing and Kindle buyers would provide a steady stream of revenue as they bought books and merchandise from the Amazon ecosystem. The Kindle Fire did exceptionally well during the 2011 holiday season so what could be wrong?
Plenty, it turns out. Apple sales fell in the post holiday months but its overall share of the tablet market surged from 54% to 68%. Amazon doesn’t break out tablet sales but rumor has it that the demand for Kindles collapsed as the Kindle Fire’s LCD is significantly better than the e-ink screens of the lower priced models. Worse still, it seems the the Kindle Fire is not selling as well as expected, leading Digital Trends to comment:
Amazon timed the Kindle Fire — and set its $199 price tag — to capitalize on the end-of-year holiday season, and the strategy seems to have worked: the Kindle Fire was a hot holiday item. However, new figures from IDC claim that Kindle Fire sales since the holidays have essentially tanked. IDC claims the Kindle Fire’s share of the worldwide tablet market during the fourth quarter of 2011 was 16.8 percent; but during the first quarter of 2012 that share fell to just 4 percent. IDC found that sales for all Android tablets were “down sharply” in the first quarter — and, of course, Apple sold 11.8 million iPads.
And the future? Not clear but with Microsoft investing in Barnes and Noble’s Nook, Google planning to offer its own tablet, and with Apple pushing new models down the development pipeline, things look cloudy indeed. Amazon is a curious company: at times they seem to execute brilliantly. And then they turn around and lose their way. Not all that different from Starbucks.