Kindle Fire's erosion of iPad market share offset by global iPhone demand

Sales estimates for Apple's iPad were slashed by 1 million units for 4Q11 due to a strong Kindle Fire launch, but iPhone sales pick up slack with domestic and international demand driving a 1.5 million increase on previous figures.

In a research note released on Monday, Canaccord Genuity said that while Amazon's tablet is expected to erode Apple's massive market share in the fourth quarter, Apple stock will see a net gain as iPhone sales will be bolstered by global launches and continually strong domestic demand.

Analyst T. Michael Walkley lowered his previous iPad sales estimates from 14 million to 13 million for the quarter ending in December, citing an expected new iPad launch next year and competition from the cheaper Kindle Fire. He writes that by the end of 2011 Amazon will be the No. 2 tablet maker with a 15.3% share, though Apple will easily retain the top spot with well over half the market.

Walkley notes that the almost 21% decrease in iPad market share quarter-to-quarter will be more than offset by increased fourth quarter iPhone sales of 30.5 million units, up from previous estimates of 29 million. He goes on to say that a healthy U.S. demand for Apple's smartphone, particularly from AT&T and Sprint customers, combined with upcoming global launches will net the iPhone its best quarterly performance of the year.

Apple's iPhone 4S is scheduled to launch in some of the world's most populated countries in 2011, including Russia, Brazil and China. The raised iPhone estimates echo recent from other investment banks such as J.P. Morgan.

End of year smartphone sales estimates put Apple in second with its 18% market share trailing Samsung's 19.5%, followed by Nokia and RIM, with 15.7% and 11% respectively.

Estimated tablet sales | Source: Canaccord Genuity

iPad will once again enjoy a commanding lead with 63.2% of the 2011 tablet market, followed by Samsung with 8.3% and newcomer Amazon with a 6.2% share.

The analyst puts a $560 target price on AAPL stock, with an increased earnings per share for fiscal year 2012 at $34.16, up from $33.52.

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57 Comments

mdriftmeyer

said about 12 years ago

I look forward to when those ``estimates'' from sources fall on their face.

Amazon is cannibalizing other Android Tablet and Nook sales.

End of story.

mytdave

said about 12 years ago

I don't think the Kindle Fire is going to have any affect on iPad sales whatsoever. It will obviously change the market share #s because industry analyists will group the Fire in the same tablet category as iPads, but it's not going to affect actual iPad sales. I'll be shocked if when the numbers come in Apple hasn't sold like 17 million of the things.

rain

said about 12 years ago

Quote:

Originally Posted by mdriftmeyer

I look forward to when those ``estimates'' from sources fall on their face.

Amazon is cannibalizing other Android Tablet and Nook sales.

End of story.

I disagree. I know a few people who are going to go with the Fire over the iPad for their first tablet.
The price point is enough for them to take a chance that they can leave Apple's walled garden and still have an enjoyable user experience.

Fire is a competitor for sure & almost guarantee's that the iPod touch is going to get a larger screen.

The tablet market is not the desktop or phone market. Most consumers looking at a tablet are buying it as a media consumption device and web browser. Security is not a big concern for them.

What will be worth watching is where the developers go. A couple blockbuster apps for Android that are unavailable for iOS - and the game could change rather quickly.

Apple will have the support base from those who are already invested in apps. That will be the challenge for their competitors. However, the market is new and not a lot of people have tablets yet. The game is far from over.

solipsismx

said about 12 years ago

Even though this is just about marketshare I think 2012 may be the time Apple needs to get the HiDPI display in the iPad so they can seal this up as another iPod-like domination.

Quote:

Originally Posted by mytdave

That's what I'm thinking.