Amazon to dominate Android tablet market in 2012

It would be the perfect Christmas gift for 2012, but sadly, the Amazon Kindle Fire isn't available in the UK for the festive season. But next year, it could be the must-have gadget.

Estimated sales for the budget Android tablet are, so far, as high as five million units. That's in one month and in the US alone. No wonder everyone is predicting big things for it. According to BGR, Evercore Partners analyst Robert Cihra said he believes Amazon’s line of Kindle Fire tablets will make up 50% of all Android tablets sold in 2012, pretty much killing off the opposition. All except for the iPad, obviously.

'While Amazon’s Kindle Fire has come out of the gates strong, as expected, we see Apple maintaining its competitive lead, if anything accentuated by what now looks like the only tablet to so far mount any credible iPad challenge apparently needing to do so by selling at cost,' Cihra wrote.

'Meanwhile, Apple goes on as the only vendor able to cream off the most profitable segment of each market it targets, whether tablet, smartphone or PC,' he added.

Amazon's strength, as the analyst points out, is that is can afford to sell at cost, making up the profit margins by selling the media used for it. That's something that the other manufacturers cannot do, which means they need to sell tablets at a profit –and with a considerably higher price than the Fire. The writing is already on the wall.

It's a strategy that is also going to impact on Apple, but not massively. The analyst has adjusted 2012 revenue estimates for Apple down to $39.1 billion from $39.4 billion, selling 14 million iPads — one million fewer than he had predicted earlier. A new iPad 3, likely to land in March, will certainly keep sales brisk.

Still no word on a launch for the Amazon Kindle Fire as yet though. But expect a real impact when it does launch, especially if the seven-inch tablet comes at the equivalent of that $199 US price tag. We can hope.

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