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iPad 2 said to have extinguished Kindle Fire demand

Amazon’s Kindle Fire tablet exploded onto the scene late last year. Despite only being available for a month and a half in the holiday quarter, Amazon shipped nearly 4 million Kindle Fires in its launch quarter to take 14% of the global tablet market according to market research firm IHS iSuppli. While many touted the tablet as the iPad’s biggest competitor, Apple’s CEO Tim Cook insisted that Amazon’s tablet had absolutely no impact on iPad sales. Now, in the first quarter of 2012 it looks like the tablet that was once said to be Apple’s biggest tablet threat may have seen drastically reduced demand following Apple’s move to drop its pricing on the previous-generation iPad 2 to $399.

“The lower priced iPad 2 has seemed to offset some of the original threat of the lower priced Fire,” Barclays analyst Ben Reitzes wrote in a note to investors on Wednesday. “Many consumers seem willing to pay $399 for a feature packed tablet with a strong and developed ecosystem rather than $199 for a relatively underpowered tablet.”

Market research firm IDC issued fourth-quarter shipment estimates that were more than a million units above iSuppli’s figures, suggesting that Amazon shipped 4.8 million Kindle Fire tablets in the in its debut quarter. Last quarter, IDC says that figure dropped to just 750,000 units. Apple’s more affordable iPad 2 may very well have played a role in the staggering decline, but excessive channel fill in the fourth quarter that outpaced demand is likely the root cause of the disparity.

Zach Epstein

Zach Epstein has been the Executive Editor at BGR for more than 10 years. He manages BGR’s editorial team and ensures that best practices are adhered to. He also oversees the Ecommerce team and directs the daily flow of all content.

Zach first joined BGR in 2007 as a Staff Writer covering business, technology, and entertainment. His work has been quoted by countless top news organizations, and he was recently named one of the world's top 10 “power mobile influencers” by Forbes. Prior to BGR, Zach worked as an executive in marketing and business development with two private telcos.