The Kindle Fire was positioned to be the first — and maybe the only — iPad-killer on the market, but Amazon’s dream of flattening Apple with their tiny tablet didn’t pan out. So what happened?

Let’s take a look at the trajectory of the Kindle Fire: Amazon’s combi-tablet-ereader shipments dropped from pre-Christmas 4.8 million units to less than 750,000 units last quarter, plummeting from 16.8 percent worldwide marketshare to a modest 4 percent. No matter how you game those numbers, they’re bad news for Amazon.

AllThingsD speculates on what caused the puzzling and shocking drop in Kindle Fire sales: Consumers may be waiting for a new version of the device, or maybe it was chalked up to a flash-in-the-pan holiday ploy intended to skim off sweet Christmas consumer spending. It has to be said, however, that the Kindle Fire may owe the large bootprint on the ass to Apple’s iPad 2, which sells in tandem with the new iPad at a lower price:

[quote]At $399, the iPad 2 is still twice the price of the Fire. But it’s also $100 cheaper than the new iPad, and comes accompanied by the same vast app and content ecosystem, iCloud, Facetime and other slick features. And that may be discount enough to command the attention of budget-conscious consumers. Indeed, during Apple’s last earnings call, CEO Tim Cook said the iPad 2?s new lower price point was unlocking demand among price-sensitive customers.[/quote]

There’s some reason to believe Cook’s words carry some weight; while IDC points out that the Fire’s market share has dropped, the iPad’s share rose to 68 percent from 54.7 percent.

Source: AllThingsD

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