Did Amazon Fudge Its 22% Market Share Number For the Kindle Fire?
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
By Michael Comeau, Minyanville Staff Writer
According to Amazon's press release, the Kindle Fire took 22 percent of tablet sales in the U.S. during its time on the market.
This number is causing some minor controversy on the financial Twit-O-Sphere as it seems awfully high, so I decided to single-handedly spearhead the investigation.
I hit Amazon up with a phone call (I left my number, so call me maybe!), email, and Tweet to get the skinny straight from the horse's mouth, and they haven't yet gotten back to me, so I decided to take a stab at figuring it out myself.
Now one thing to remember is that while. Apple (NASDAQ: AAPL) faithfully reports iPad sales numbers each quarter, Amazon does not do the same for the Kindle Fire. That makes this exercise a little bit tough.
I took a look at estimates from IDC, which help us out quite a bit.
During Q4 of 2011 (when the Kindle Fire debuted), Amazon sold 4.8 million units, enough to take 16.8 percent of the global tablet market.
In Q1, IDC reported that Amazon's market share fell to just over 4 percent, which implies sales of about 700K.
For Q2, sales were 1.25 million for about 5 percent of the global market.
Using my own brand of magic seventh-grade math, I managed to figured out that during the three quarters for which we have Kindle Fire sales estimates, it had 9.6 percent of the global market. Note, however, that this number does not include July or August, a time frame for which there are no numbers.
Now, remember this: The Kindle Fire was a U.S.-only product. Therefore, its global market share will be significantly lower than its US market share.
Therefore, it is reasonable to assume that its U.S. market share was significantly higher than 9.6 percent, putting that 22 percent number within reach.
ComScore (SCOR) <said in April that the Kindle Fire had more than half the US Android market, which is probably enough to get to a 22 percent total market share number, if we assume that Android tablet market share was about 40 percent of the US market during this time period.
So I'll have to put my pitchfork down -- for now, it looks like Amazon's telling the truth.
But I think the word's out -- my algebra skills are NOT to be reckoned with, especially when it comes to market share numbers.
So enough about the past, let's look towards the future.
Amazon is holding a press event on September 6, and in all likelihood, it's going to introduce the next edition of the Kindle Fire.
However, that model will likely face an uphill battle in the marketplace.
Google's Nexus 7, released in July, makes for an awfully tough competitor in the bargain-bin category in which the Kindle Fire competes. It is extremely well-specced for its $199 price and very well-reviewed. Google even pushed the Nexus 7 on Google.com in recent days, the same way Amazon pushes the Kindle family on Amazon.com.
And of course, if the mythical iPad Mini ever comes out (I have my doubts), all bets are off for low-priced tablets like Google's and Amazon's.
As for the Microsoft (MSFT) Surface tablet, it likely won't impact the Kindle Fire 2, UNLESS it hits the widely-rumored-but-unlikely $199 price point
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