Remember that article I wrote way back, arguing that Amazon’s $50 Fire would annihilate the tablet market for everyone else? Looks like I can preen a bit. ABI Research has confirmed my foresight with its latest numbers on Branded Tablet Vendor Shipments, which put Amazon emphatically ahead of everyone else except Samsung and Apple in 4Q2015 – and apparently eating into those brands too.
“ABI Research estimates that the company sold five million of its various tablet models during the final three months of 2015,” states the announcement. “At this figure, Amazon ranks #3 overall for branded tablet shipments for that quarter and #5 for the full 2015 calendar year.” This compares to 1.5 million Amazon-branded tablets sold in 4Q2014. Apple, meanwhile, sold 16.1 million tablets in the crucial gifting season in 2015, versus 21.4 million in 4Q2014, and Samsung sold 9 million units versus 11.1 million in the same period for the previous year (see chart below).
“The incredibly low pricing of the Fire Tablet is a smart and strategic move, as few others can afford to accept a lower margin on their tablet devices in favor of driving a surplus of content-related revenues,” remarked Jeff Orr, Research Director at ABI Research. Note that ABI cites an “average vendor selling price of $323” for the tablet market as a whole, versus the Fire’s $50 sticker price. In other words, Amazon is giving you a highly serviceable tablet for less than one sixth of the (surprisingly high) average – thanks to Apple’s premium pricing, I assume – which can do almost all that the more costly devices can, and plug you in to Amazon’s excellent content delivery services.
“It is a calculated risk that Amazon can afford to take as the company shifts its revenue focus away from solely hardware and toward recurring digital content sales,” remarks ABI. Solely hardware? That’s an odd assumption to pin on the creators of the modern ebook industry. But there’s no doubt that Amazon’s bet – if it was risky at all – has paid off.
And in other other words, Amazon almost quadrupled its shipping of own-branded tablets in the space of one year. Apple, meanwhile, saw its volume trimmed by over 20 percent. And just imagine what each one of those Fires means for Amazon in terms of further content and ad revenues. Not hard to guess which way these trend lines are likely to go in the year ahead …