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Friday, December 02, 2011, 04:33 pm PT (07:33 pm ET)

Amazon Kindle Fire takes #2 tablet spot after shipping 3.9 million units

Amazon is expected to "surpass all other iPad rivals" in the final quarter of 2012, with expected shipments reaching 3.9 million units, compared to an estimated 18.6 million iPad sales.

A report by IHS projects that Amazon's Kindle Fire shipments will take a 13.8 percent share of all tablets sold in the fourth quarter, overshadowing Samsung's 4.8 percent share, Barnes & Noble's 4.7 percent cut, and HTC's 1.3 percent share among tablet sales.

All other tablet makers combined will amount to 4.6 percent, leaving Apple an estimated 65.6% share with the iPad. IHS previously expected 60 million tablets to ship in 2011, but has bumped up its forecast to 64.7 million units.

"At a rock bottom price of $199—which is less than the $201.70 it now costs to make the device—the Kindle Fire has created chaos in the Android tablet market,” wrote IHS' Rhoda Alexander.

“Most other Android tablet makers must earn a profit based on hardware sales alone. In contrast, Amazon plans to use the Kindle Fire to drive sales of physical goods that comprise the majority of the company’s business. As long as this strategy is successful, the company can afford to take a loss on the hardware—while its Android competitors cannot.”



The report speculates that Apple may respond to the Kindle Fire's holiday sales by introducing a lower priced iPad 2 alongside a new iPad 3, which is expected to debut in the first quarter of 2012 as the iPad turns two.

Apple released the iPad in April 2010, selling 3.27 million devices in the first 80 days. During its first holiday quarter, Apple shipped 7.33 million units.

The previous runner up tablet for 2011 had been HP's ill-fated TouchPad, which beat every other tablet hopeful (including RIM's PlayBook and Android 3.0 Honeycomb tablets from Motorola and Samsung) with sales of 17 percent of the 1.3 million "non iPad tablets" shipped by Apple's competitors in the first ten months of the year. HP's tablet was on sale for just 48 days.