Kindle Fire has over half the Android tablet space
Every rival has lost share since the Fire launched, and the slate proves significant driver in Amazon's first quarter
Published: 30 April, 2012
READ MORE: Financial | Amazon | Tablet | Android
The Kindle hardware family was a highlight of Amazon's most recent quarter, apparently justifying the retailer's controversial strategy of offerings its own devices, and the latest gadget, the Kindle Fire, now controls more than half of the US Android tablet market.
According to the latest data from market research firm comScore, the Fire has gained over 54% of the segment, up from 29.4% in mid-December, although Android as a whole lags well behind the tablet leader, the iPad.
The Amazon device, whose appeal focuses on its low price and integrated content platform, is very differently positioned from its iOS rival, and its success will have had far greater impact on other Android players than an Apple. In the comScore study, no other Android slate has gained share since the Fire launched. The Samsung Galaxy Tab family is the second most successful offering, but the total share of its large- and small-screen variants dropped between December and February, from about 23% of the Android sector to 15.4%. No other product now has double-digit share, though the Motorola Xoom, Asus Transformer and Toshiba AT100 are the next most successful gadgets.
Meanwhile, Amazon beat analysts' first quarter revenue and earnings estimates on high demand for Kindle devices, seeing the firm's shares climb by the highest amount in two years. Sales were up 34% year-on-year to $13.2bn, and though net income was down to $130m, or 28 cents per share, from $201m in the year-ago quarter, this was still well ahead of Wall Street forecasts of 7 cents a share on sales of $12.9bn.
The other main growth driver, apart from Kindle, was the rise in third party unit sales, up 60% year-on-year, and CEO Jeff Bezos said he intended to invest heavily in devices and in warehouses equipped for faster turnaround of physical goods. And Amazon made more than half of the quarterly net income from 'equity method investments', in which the retailer takes a minority stake in associated businesses such as daily deal site LivingSocial.com, in which it has 29% share. These stakes give Amazon "the ability to exercise significant influence, but not control, over an investee," according to a regulatory filing. The company made $89m from those outside stakes in the first quarter, according to Bloomberg.
A key focus this quarter will be to build up the video offerings available via the web and on the Kindle Fire, said Amazon. It recently launched Amazon Instant Video on its first games console, the Sony PlayStation 3, and in Q1, sales of digital media were up 19% to $4.7bn.
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