Kindle Fire burned up some holiday iPad sales

Tuesday, January 3rd 2012. | Gadget News

Amazon’s Kindle Fire took a bite out of iPad sales over the holiday season, according to a research note today from investment bank Morgan Keegan.

Kindle FireThe bank reduced its iPad shipment estimates on Tuesday. “We are lowering our unit shipment estimates for iPad in the [December] quarter from 16 million to 13 million. Based on data from Amazon, we believe the Amazon Fire likely sold 4 [million to] 5 million units this holiday season,” wrote Tavis McCourt, a Morgan Keegan analyst.

As a result, the Kindle Fire took away “maybe 1 [million to] 2 million” iPad sales, McCourt said.

And compared to the previous (sequential) quarter, revenue generated from the iPad will be down. “We expect iPad revenues to generate 21.3 percent of revenues in the December quarter for Apple, up from 17.2 percent in the year-ago period, although down from 24.3 percent in the previous quarter,” McCourt wrote.

Amazon, not surprisingly, has been trumpeting its success, saying last month that “throughout December, customers purchased well over 1 million Kindle devices per week.”

A lot of the Kindle Fire’s success is due to its $199 price. Apple’s least expensive iPad is $499. Although it’s smaller (with a 7-inch screen, versus the iPad’s 9.7-inch screen) and less feature-rich than the iPad, the Kindle Fire offers a lot for $199, including a good color screen, a dual-core processor, an Android-based operating system, and basic apps like a browser, unified e-mail, and Netflix movie streaming, plus access to all of Amazon’s content in the cloud.

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