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Kindle Fire jumps to No. 2 in tablet wars


Amazon Kindle Fire

Kindle Fire has barely reached the toddler stage of its young life, but it's already shot up in tablet sales,  second only to Apple's iPad — at least for the last quarter of 2011. 

Research by IHS iSuppli Display Materials & Systems Service reveals an impressive debut quarter for Amazon's first tablet, which arrived in November for the gift-ready price of $200. While Amazon doesn't reveal the breakdown of specific Kindle models when it releases its sales figures, it did report a record-breaking 4 million sold in December. IHS iSuppli's analysis shows that most, if not almost all, of those sales were probably Kindle Fires — about 3.9 million in that final quarter of 2011.

While it blew past Samsung, Barnes & Noble and Asus' tablets in that quarter, Amazon's device has a long way to go before it can be considered any kind of threat to the iPad and iPad 2, which saw sales of 40.5 million in 2011. That's up 168 percent from 2010, when 15.1 million were sold. But the proliferation of tablets has started to dig into Apple's dominance, as its share of the market fell to 62 percent in 2011, from 87 percent in 2010.

But IHS iSuppli predicts that Apple will see a surge with the introduction of the next iPad:

IHS iSuppli anticipates strong sales for the iPad 3, with demand expected to outstrip supply for several months. The new device is reported to feature a QXGA retina display with a pixel format of 2,048 by 1,536, as well as SIRI, the popular voice interface of the iPhone 4S. As with previous iPad releases, Apple is anticipated to stage a staggered rollout, introducing the new product in different countries around the globe as supply improves.

Samsung hung onto No. 2 for the year, with 6.1 million tabs sold. The Kindle Fire came in third at 6 percent for the year, selling more units in that last quarter than Nook and Asus tablets did the entire year.

In 2011, 65.2 million tablets made it to consumers, which was above the estimate of 64.7 million IHS predicted. 

In early December, just weeks after the Kindle Fire's release, IHS was already predicting it to be No. 2 that quarter. As researcher Rhoda Alexander — who also wrote the most recent IHS report — explained:

“At a rock bottom price of $199 — which is less than the $201.70 it now costs to make the device — the Kindle Fire has created chaos in the Androidtablet market,” Alexander said. “Most other Android tablet makers must earn a profit based on hardware sales alone. In contrast, Amazon plans to use the Kindle Fire to drive sales of physical goods that comprise the majority of the company’s business. As long as this strategy is successful, the company can afford to take a loss on the hardware—while its Android competitors cannot.”

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