Amazon Kindle Tablet Could Boost Tablet Sales for iPad Competitors: J.P. Morgan

By CIOinsight  |  Posted 09-12-2011 Print Email
J.P. Morgan analysts believe Apple's iPad 2 momentum will push tablet shipments up 13 percent in 2011. However, the failure of a challenger may push the market down 5 percent in 2012 ... unless the Amazon Kindle Tablet wows consumers.

Another analyst is putting stock in the Amazon (NASDAQ:AMAZN) tablet computer as a credible challenger to Apple's iPad--sight unseen.

J.P. Morgan analyst Mark Moskowitz said Amazon's arrival could buoy the market for tablet computers not made by Apple (NASDAQ:AAPL), whose iPad ignited the market in April 2010 and has sold over 30 million units to date.

"We believe Amazon's entry into the tablet market could provide a shot in the arm to the non-Apple tablet market. As we have discussed in previous reports, entry into the tablet market by Amazon or Microsoft (NASDAQ:AMZN) could make for reshaped market conditions," Moskowitz said in his report Sept. 8.

The analyst, who also believes slates based on Microsoft's Windows 8 platform could challenge the iPad, has reshaped his expectations for the tablet market in 2011 and 2012. Thanks to the iPad 2's momentum, Moskowitz now expects 2011 shipments to be 51.9 million units, versus his previous estimate of 46.1 million units, a 13 percent bump for the year.

Yet Apple can only carry the market so far. Thanks to the underwhelming reception to Google's Android "Honeycomb" tablets, Research In Motion's BlackBerry PlayBook and the end-of-life HP TouchPad, Moskowitz is curbing his 2012 tablet estimates by 5 percent from 76.3 million to 72.4 million units total.

"Beyond the iPad, there has not been another high-volume tablet offering, yet," the analyst wrote. "We are still awaiting the emergence of a clear number two player, though this may not happen until the launch of Windows 8 in the second half of 2012. Our iPad estimates for 2012 could have upside potential if no number two player emerges."

That's something of a challenge for Amazon, whose worst kept secret all year has been the emergence of the so-called Kindle Tablet. This 7-inch slate with a full-color screen is expected to launch in October or November for less than $300--just in time to challenge the iPad for the 2011 holiday sales.

However, the device also runs a custom build of Android. While the OS has proved a monster in smartphone sales worldwide, the "Honeycomb" build, or any other Android tablet for that matter, has failed to thrive.

That fact is keeping analysts from predicting the Amazon tablet will easily stand up to the iPad, as Moskowitz noted: "While the OS is likely to remain a weak spot on an Amazon device, we believe the brand name, content and distribution capabilities of Amazon pose risks to Apple's dominance of the tablet market."



 

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