First, DigiTimes, which sources info from upstream component suppliers, says that shipments of the Kindle Fire from Quanta Computer to Amazon.com have already reached 3 - 4 million units. Amazon.com, according to the sources, figures to see a total of five million Kindle Fire shipments by the end of December or early January.
Meanwhile, iSuppli's believes Amazon.com will ship 3.9 million Kindle Fires during Q4 2011. That will, according to iSuppli's estimates, put Amazon.com in second place among tablet makers, despite shipping zero tablets in Q3.
That would give Amazon.com a 13.8 percent share of global media tablet shipments in the fourth quarter, almost 3x the share (4.8 percent) estimated for No. 3 Samsung, and trailing only Apple's commanding 65.6 percent market share.
Rhoda Alexander, senior manager, tablet and monitor research for IHS said Apple finally has a legitimate competitor. "Nearly two years after Apple Inc. rolled out the iPad, a competitor has finally developed an alternative which looks like it might have enough of Apple's secret sauce to succeed. Initial market response strongly suggests that Amazon, with the Kindle Fire, has found the right combination of savvy pricing, astute marketing, accessible content and an appropriate business model, positioning the Kindle Fire to appeal to a brand-new set of media tablet buyers. The production plans make it clear that Amazon is betting big on the product."
It's because Amazon.com is not so interested in profits from the Kindle Fire itself that it is able to market the tablet so aggressively. In fact, it's losing money on each Fire.
Meanwhile, what will Apple do to respond? It's quite possible that Apple will do the same thing it did with the iPhone: sell the prior year's model for a cut price at the same time they release a new model. In this case, Apple could continue to sell a model of the iPad 2 when they introduce the iPad 3.
Let's say they drop the storage of the iPad 2 to 8GB. It's still hard to imagine them competing with the $199 Kindle Fire price, even taking into account the missing front- and rear-facing cameras and other iPad 2 components that are superior to the Kindle Fire's.
Ironic that the first successful Android tablet appears to be one that is inferior to the current iPad, whereas the Xoom, the first tablet to sport tablet-optimized Honeycomb, failed miserably despite its superior hardware specs. Not only that, the Kindle Fire doesn't run Honeycomb, and it doesn't even run a standard version of Android.
2012 will be an interesting year for Android and iOS, as well.