Apple clearly dominates the tablet market. No one is going to dispute that. But while the company boasts of its more than two-thirds market share, the reality is that manufacturers of low-cost tablets—namely Amazon and Google—are chipping away at Apple’s domination in a more insidious way. While the sales figures show Apple as the reigning champion, Amazon and Google can afford to sell their tablets at breakeven prices, which is forcing Apple to accept lower margins for the iPad Mini.
This isn’t going to suck away all of Apple’s profits, but it may mean that we’ve seen the high water mark, and as Apple’s share prices continue their downward slope, the company may now be settling into a less ivory tower-ish spot in the market.
Now, Amazon has confirmed to VatorNews that it saw record high sales of Kindle Fire HD tablets last Wednesday—the day after Apple unveiled the iPad Mini. AllThingsD's Kara Swisher first reported on this. Of course, Amazon doesn’t release sales figures for its Kindle products, but I’m sure in a few months’ time, we’ll see a report on tablet sales worldwide and where Amazon and Apple stand.
Many were expecting Apple to debut a smaller tablet in the $200-$250 range, so it’s not that far-fetched to assume that the iPad Mini’s $329 price tag made the decision for a lot of people. Something about crossing that $300 line just doesn’t sit well with a lot of middle-class consumers. The iPad Mini probably wouldn’t have driven so many people to the Kindle Fire HD if it had been $299.
There are a lot of Apple fanboys insisting that the $329 price tag won’t hurt iPad Mini sales, but the non-early adopters do take price into consideration.
One thing that I truly love about Amazon: they make zero attempt at tact or discretion when they want to attack their competitors. I love it—it’s so reality TV. Barnes & Noble coming out with a new Nook tablet that has a million-bajillion hours of battery life? The Kindle Fire has a million-bajillion and one—booyah.
A visit to Amazon’s home page shows how seriously Amazon is taking the competition between Kindle Fire HD and iPad Mini. Right there on the home page is a point-by-point comparison of the Kindle Fire HD and the iPad Mini. It’s pretty compelling. Amazon points out that the Kindle Fire HD has 30% more pixels than the iPad Mini (216 pizels per inch compared to 163 pixels per inch)—and, of course, it costs a good $130 less than the iPad Mini.
Apple threw the first punch at its unveiling event when it compared the iPad Mini to an unnamed 7-inch Android tablet, showing a side-by-side comparison of how apps for Android tablets are just “stretched-out phone apps,” as well as how the screen of the iPad Mini is larger. But that doesn’t change the fact that tablets like the Kindle Fire HD have a higher resolution display.
I, for one, can’t wait to see where the tablet market ends up after the holiday quarter.