The Kindle Fire isn't going to dethrone the iPad, but it will eat up half of the Android tablet market in 2012, according to one analyst's prediction.
"While Amazon's Kindle Fire has come out of the gates strong, as expected, we see Apple maintaining its competitive lead," Evercore Partners' Robert Cihra said in a note to investors, as reported by CNN.
At this point, the Fire is the "only tablet to so far mount any credible iPad challenge," Cihra continued, and "Amazon's success may just vaporize other 'for profit' Android tablet OEM roadmaps."
Amazon, however, appears to be making gains "by selling at cost," he said. A late September bill of materials (BOM) estimate from IHS iSuppli guessed that it would cost Amazon about $210 to make a Kindle Fire, meaning the company would lose between $10 or $11 on each $199 tablet. But the firm later said the loss probably wasn't that big.
Nonetheless, "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," Cihra said.
This corroborates a separate report from IHS iSuppli, which last week declared Amazon's Kindle Fire the number two tablet on the market. ISuppli predicted that Amazon will ship 3.9 million Kindle Fires in the last three months of 2011 to secure 13.8 percent of the market. It said Apple will hold fast to the majority of the tablet share, shipping 18.6 million iPads for 65.6 percent in the fourth quarter.
The Kindle Fire's closest Android-based competitor, the Samsung Galaxy Tab, will ship 1.4 million tablets in the fourth quarter for a 4.8 percent share, iSuppli estimated.
Changewave has also forecasted that Amazon's $199 tablet won't topple the iPad, but rather eat away at other tablet's shares.
JP Morgan, meanwhile, said in a recent report that the Apple doesn't seem to be worried about the Kindle Fire, and suggested that the new tablet could actually help iPad sales in the long run.
"It has been our view that low-priced, reduced feature-set entrants, such as the Kindle Fire, are soap box derby devices stuck between a tablet and e-reader," JP Morgan concluded. "Meaning, we are not concerned much about competitive pressures until the second or third generations."