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Last updated on April 24, 2014 at 21:24 EDT

Kindle Fire And iPhone 4S Are Largest Threats To iPad Sales

February 17, 2012

By rolling out the Kindle Fire just before the holiday shopping season last year, Amazon may have set itself up as the first serious competition against Apple in the mobile tablet market. The Fire was priced to undercut the iPad and designed to appeal to fans of e-readers who wanted some limited browser and gaming capability.

So it appears that Amazon has found a niche selling half the tablet for half the price, found fans for its next generation reader and swiped some market share from the iPad.

The iPad´s biggest sales threat however may not come from another company but may in fact be Apple itself. The popularity of the iPhone 4S, with 37 million sold during the fourth quarter alone, may well have captured the hearts and wallets of many who may have been considering upgrading from their original iPad over the holidays, reports Danielle Kucera for Bloomberg.

Rhoda Alexander, of research firm IHS iSuppli says, “Shipments of the iPad line fell short of IHS estimates in the fourth quarter as many loyal Apple customers devoted their dollars to shiny new alternatives,” she said in the report.

“The primary alternative wasn´t the Kindle Fire — which debuted to solid sales in the fourth quarter — but Apple´s own iPhone 4S smart phone.”

According to iSuppli, 3.9 million Fire tablets were sold by Amazon during the quarter, while Barnes & Noble moved 1.9 million Nook tablets, for 14 percent and 7 percent of the market, respectively.

Samsung sold about 2.1 million of its Galaxy Tab tablets during the quarter and 6 million during the entire year, PC Mag´s Chloe Albanesius writes. Apple, meanwhile, shipped 15.4 million iPads, an increase from the 11.1 million it sold in the third quarter.

Apple CEO Tim Cook talked about sales numbers during an appearance at a Goldman Sachs conference this week. Sales of the iPad have cannibalized Mac sales, he said, but Apple isn´t too worried about the trend. The company would prefer that customers move from one Apple product to the next rather than desert the company’s products altogether.

“We never want to hold back one of our teams from building the absolute greatest thing, even if takes some sales from another product area,” Cook said. Ultimately, “we [just] want them buying Apple stuff.”

When asked about Amazon, meanwhile, Cook said the company “is a different kind of competitor.” He acknowledged that “they´ll sell a lot of units; I think they have and they will,” but Apple customers “are not going to be satisfied with a limited-function type of product,” he said.

Apple however is not resting on its laurels. A third-generation iPad is expected to be announced next month which will likely help Apple regain any tablet market share it lost in the last quarter.

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Source: RedOrbit Staff & Wire Reports