Amazon’s (AMZN) first Kindle Fire took the holidays by storm last year. Following a white-hot debut, Amazon’s slate had reportedly taken 14% of the global tablet market in the fourth quarter of 2011 despite being available for only six weeks in the quarter. This holiday season was a different story though, as new entry-level tablets from Google (GOOG), Barnes & Noble (BKS) and Apple (AAPL) gave consumers a number of attractive options they didn’t have last year.
According to Pacific Crest analyst Chad Bartley, Kindle Fire sales this holiday season are shaping up to come in lighter than had been expected. As a result of hot competition from the iPad mini and other rival devices, the analyst cut his fourth-quarter Kindle Fire and Kindle Fire HD sales estimates by 25% to 6 million units.
“This is negative for Amazon’s digital ecosystem,” Bartley wrote in a note to clients on Tuesday evening. “Although weak Kindle Fire demand is potentially positive for profitability, it does imply that Amazon is still struggling to compete against Apple, and may even be seeing competition from Google. This could make it more difficult for Amazon to drive incremental purchases of digital media and physical products over the longer term.”
Shares of Amazon were trading up 0.23% at $261.00 during Wednesday’s pre-market session.