When Apple releases its earnings for the first fiscal quarter of 2012 late Tuesday, we’ll learn just how much the tablet market has changed since the release of the Kindle Fire in November — one of the main reasons tablet ownership shot up over the holiday season.
With its bargain-basement price ($199) and the plethora of Amazon services on tap, the Kindle Fire was a hot gift this holiday, and Amazon says it sold a record 4 million Kindles in the holiday (thought it doesn’t separate ereaders from tablets in those figures).
Just how many people opted to buy a Kindle Fire instead of an iPad? At least one investment bank has already weighed in, and we’ll have a better idea in a couple of hours.
Looking back a year, iPad sales over the 2010 holiday season were 7.3 million, up from 4.2 million the previous quarter — a 73% increase. Last quarter Apple sold 11.1 iPads, so to match the previous year’s spike, Apple would need to have sold 19.3 million iPads.
That doesn’t necessarily mean that if Apple comes up short of that figure that iPad sales have completely tanked, though. Demand for Apple products is so high that the company regularly has issues keeping up supply, so just being in the neighborhood of that mark will be quite an achievement. But if it’s appreciably short — say, by 3 million units — then Apple has a problem.
A lackluster iPad figure would mean that Apple is seriously challenged by this new low-priced competitor. That would be a big blow to what otherwise is expected to be a big earnings season for Apple, since whatever happens with the iPad, the iPhone 4S is widely expected to give the company its best iPhone sales ever.
It might also give a hint as to Apple’s strategy with iPad 3. For the first two generations of the product, Apple has been consistent in keeping the price stable, just adding features and performance. If the Kindle Fire is seriously cutting into iPad sales, though, that could change.
If its new competitor is a real threat, we might see Apple focus more on aggressive pricing, with merely incremental upgrades to the design. Such a revamp could possibly delay the release. Or perhaps Apple might take the iPad line in two directions — the original, high-end model and a smaller stripped-down version that will give anyone considering a Kindle Fire reason to head to the Apple Store instead.
Of course, there’s also the very real possibility that iPad sales were barely affected by the Kindle Fire. That would mean tablets have become a two-tier market, with Apple dominating the top and Amazon gobbling up what’s left on the bottom. Anyone thinking about competing (Microsoft, take note) will need to first figure out where they want to take their fight.
Wherever iPad sales end up, we’re going to learn something new about the tablet market, and if we’re lucky CEO Tim Cook might even let slip a hint or two about iPad 3. Mashable will have complete coverage of Apple’s earnings, which the company’s due to release at 5 p.m. Eastern Time. Stay tuned.