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SAN JOSE,
Calif. - In its first quarter of selling its own tablet
computers, Amazon.com Inc. has become the second-biggest
seller of the increasingly popular mobile devices by
stealing market share from the still-dominant leader,
Apple Inc., according to projections.
Amazon
will ship 3.9 million Kindle Fire tablets in the fourth
quarter, according to analysis firm IHS, giving it 13.8
percent of the global tablet business. Cupertino,
Calif.-based Apple, which sells the popular iPad tablet,
still controls 65.6 percent of the market, but that is
down from 69.7 percent in the third quarter.
“Nearly
two years after Apple Inc. 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,” said Rhoda Alexander, the senior
manager for tablet research at IHS.
Amazon
sells the Kindle Fire, a full-color tablet version of
its popular Kindle e-reader, for $199 — much lower
than the iPad, which starts at $499. The lower price and
Amazon’s approach to the market have brought in “a
brand-new set of media tablet buyers,” Alexander said.
Amazon
also pushed down Samsung’s market share, from 7.8
percent in the third quarter to 4.8 percent in the
fourth quarter, IHS said. Like Amazon, Samsung sells
tablets based on Google Android operating system.
“The
Kindle Fire has created chaos in the Android tablet
market,” Alexander said.
Because
of the new buyers Amazon has managed to capture with its
low prices, IHS says that 64.7 million tablets will be
sold in the United States this year, up from a previous
estimate of 60 million and a dramatic increase from the
2010 total of 17.4 million.
Amazon,
based in Seattle, reportedly sells the Kindle Fire at a
loss, with IHS previously reporting that the company
pays $201.70 in parts and costs to build each tablet. It
hopes to make more money in digital sales, however, as
customers buy e-books, music, movies and TV shows from
the online retailer to view on the Kindle Fire.
“As
long as this strategy is successful, the company can
afford to take a loss on the hardware — while its
Android competitors cannot,” Alexander pointed out.
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