September 27, 2011, 2:25 PM — On the eve of Amazon.com's highly anticipated release of its Kindle Fire tablet, new research underscores the challenge facing the online retail giant, as well as every other tablet contender.
According to research and consulting firm Strategy Analytics, four out of five tablet shipments in North America during the second quarter of 2011 were Apple iPads.
"Apple completely dominates the North American tablet market, capturing 80 percent share of 7.5 million shipments during Q2 2011," said Alex Spektor, senior analyst at Strategy Analytics. "Apple remains a long way ahead of its main rivals such as Motorola, Samsung, RIM, Asus and HTC. A combination of cool branding, user-friendly hardware, entertaining services and savvy retail distribution has made Apple a formidable market leader."
More like dominant market leader. None of the other tablet makers have made a dent in Apple's commanding market share. HP gave up less than two months after releasing its TouchPad tablet on July 1, while RIM appears headed down the same road with its BlackBerry PlayBook.
Still, Strategy Analytics believes Apple's grip on the American tablet market will be "hard, but not impossible," for Amazon and others to break.
Neil Mawston, director at Strategy Analytics, makes the case this way:
"Provided the pricing, screen size and hardware design are right, Amazon can be one of the main challengers to Apple's dominance. Like Apple, Amazon has a strong brand, compelling content, sophisticated billing systems and widespread distribution. In effect, Amazon's new tablet product represents a good opportunity to place an Amazon shopping cart in the hands of American consumers, offering optimized access to purchasing digital content or physical goods from the Amazon online store."
These are all good points, and Amazon is releasing its tablet at a good time, less than three months before the holiday shopping season. This allows for some positive word-of-mouth to spread on- and offline, which is a more effective marketing strategy than a full-scale advertising blitz in November and December.
That being said, the real question is how the Kindle Fire stacks up to the iPad on a feature-by-feature basis. As PC World's Daniel Ionescu wrote, "it's unclear whether (the Kindle Fire) would be an iPad competitor, or a spruced-up e-reader with movies, music and apps."
Then there's the issue of pricing.