Analyst puts Kindle Fire holiday sales at 5.5 million


Sales expectations for Amazon’s Kindle Fire have been high since Amazon announced the tablet back in September, but Amazon—as always—has not stated how many units its actually sold, revealing only that it sold more than a million of the units in December. Now, Barclay’s analyst Anthony DiClemente claims that Amazon sold some 5.5 million of the devices over the holiday season and is on track to sell some 18.4 million of the devices during 2011. If that estimate pans out, by the end of 2011 the Amazon Kindle could potentially control about half the market for all tablets that aren’t iPads, leaving precious little room for other device-markers—even Google’s alleged iPad killer, due this year.

DiClemente’s estimate was published by All Things Digital.

DiClemente’s sales estimate for the Kindle Fire had been roughly in the middle of analyst expectations for the device. At the beginning of December IHS iSuppli estimated Amazon would ship 3.9 million of the tablets during the last three months of 2011, while early figures from DisplaySearch estimated Amazon was planning to ship 6 million units—shipping isn’t the same as selling, but if those figures hold up, it means Amazon would have had enough product on hand to possibly meet DiClemente’s holiday sales estimate.

The looming question is how much the Kindle Fire is impacting sales of Apple’s iPad, by far the dominant player in the tablet market. Industry watchers speculate that, while the iPad is more capable and powerful, Amazon’s compelling $199 price tag for the Kindle Fire will be very appealing to consumers who balked at the $499 staring price for the iPad 2. Although Amazon is unlikely to break form and reveal sales figures for the Kindle Fire (it has never disclosed sales figures for any other Kindle), the results of Apple’s latest financial quarter are due soon, and Apple consistently has broken out iPad, iPhone, iPod, and Macintosh sales. Morgan Keenan analyst Tavis McCourt cut his estimate of iPad sales for the holiday quarter from 16 million to 13 million, with much of that shortfall attributable to the Kindle Fire.

Amazon’s strategy with the Kindle Fire is almost the opposite of Apple’s with the iPad. Apple is primarily a hardware company, and makes its money selling best-of-breed items and making a healthy margin on those sales. With the Kindle Fire, estimates have Amazon losing money on every sale (even leaving aside R&D and development costs) and hopes to make it up through incremental content sales of books, music, movies, and television shows through Amazon’s content ecosystem. DiClemente goes on to estimate that by 2014, the Kindle Fire and its descendants will be responsible for some $3.9 billion in content sales for Amazon—and eventually the revenue from digital content sales will eclipse revenue from Kindle device sales.

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