Millions of Reasons for Apple to Worry

After four years of tightlipped praise and vague press releases, Amazon.com (Nasdaq: AMZN  ) is ready to shed some more light on its Kindle unit sales.

We're not getting actual numbers, mind you. Amazon also isn't really breaking down its different Kindle product lines beyond an interesting nugget on the success of its Kindle Fire. However, today's press release, claiming that Amazon has sold more than a million Kindles a week in each of the past three weeks, is certainly crisper language than what the e-tail giant has divulged in the past.

A million Kindles cleared in each of the past three holiday shopping weeks -- even if it's lumping the $79 Kindle, $99 Kindle Touch, $149 Kindle Touch 3G, and $199 Kindle Fire in one pot -- is impressive.

Amazon also has some encouraging milestones to discuss specifically about the Kindle Fire that was introduced last month.

"Kindle Fire is the most successful product we've ever launched," Amazon exec Dave Limp is quoted as saying in today's press release. "It's the best-selling product across all of Amazon for 11 straight weeks, we've already sold millions of units, and we're building millions more to meet the high demand."

Limp also goes on to say that Kindle Fire sales have been accelerating in each of the past three weeks.

Nice! Having already sold "millions" means that Amazon has shipped out at least 2 million Kindle Fire devices.

Let's frame this a different way. Market tracker NPD Group stunned tech watchers when its channel checks revealed that there were just 1.2 million tablets -- outside of Apple's (Nasdaq: AAPL  ) iPad -- sold in this country through the first 10 months of the year. In other words, Amazon has already outsold every other non-Apple tablet maker combined. It still has a long way to catch up to Apple, of course, but at least now it has to be showing up in Apple's rearview mirror.

Amazon's eating up the low end of the tablet space. Even having pesky Hewlett-Packard (Nasdaq: HPQ  ) and Research In Motion (Nasdaq: RIMM  ) kick in with limited-time fire sales of their higher-end tablets at Kindle Fire-like prices isn't slowing the online retailer down.

Why is Amazon suddenly so chatty? Is it that the company finally feels that it has numbers worth sharing the way that Apple routinely does?

I don't think so. If anything, I think you can thank David Streitfeld from The New York Times for this peeled-back curtain. It was his scathing article earlier this week that detailed how the Kindle Fire's shortcomings -- from the lack of external volume buttons and privacy controls to an easily triggered off switch -- are forcing many early adopters to return their entry-level tablets.

Amazon's simply fighting fire with Fire, arguing its side of the story. Not only has it sold millions, but folks are so happy with the original model that it's ordering millions more to meet growing demand.

All we need now is for Amazon to finally give us actual sales metrics when it reports its holiday quarter's results next month. It will make it that much easier to make an apples to Apples comparison.  

If you want to get in early on the next mobile investing craze, warm up to this special free report on the next trillion-dollar revolution.

The Motley Fool owns shares of Amazon.com and Apple. Motley Fool newsletter services have recommended buying shares of Apple and Amazon.com. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story, except for HP. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


Read/Post Comments (13) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 15, 2011, at 1:37 PM, bugnuts wrote:

    Apple worry? I doubt it. Apple continues to sell every iPad it can make.

    Other makers of Android tablets will bear the brunt of the Kindle Fire's success.

  • Report this Comment On December 15, 2011, at 2:01 PM, marv08 wrote:

    I agree, their being somehow open about sales numbers is mainly a reaction to recent bad press. Some of it was deserved (concerning GUI failures and sluggishness), some of it was not (parents who can't check if a product has parental controls BEFORE buying something are mainly bad news for their children).

    I am not fine with the baiting headline though. So, Apple has sold millions less of its $199 tablet? Good they don't have one then. Maybe other Android tablet makers should worry now, as the price to beat is no longer $499 (and they did not manage that one either).

  • Report this Comment On December 15, 2011, at 2:04 PM, marv08 wrote:

    @InfoThatNobodyAskedFor: Could you please ask your infamous random word generator to at least stay on topic?

  • Report this Comment On December 15, 2011, at 2:15 PM, applebull wrote:

    The Title of the article was not accurate. Apple does not need to worry about the low end of the tablet market. They have almost all of the $500 and above Tablet Business with the IPad. They are not in the low end at all.

    A negative Apple Headline is designed to get people to read the article, but you have solicited them with a falsehood. You should be better than that!

  • Report this Comment On December 15, 2011, at 2:15 PM, CraigNotGreg wrote:

    There is no reason to mention Apple in the headline of this story except to act as click-bait. Rick's tactics are getting so old that I knew he was the author just by reading the link. Kudos to Amazon for having some success with the Kindle Fire. Please eliminate the Apple name dropping in future articles.

  • Report this Comment On December 15, 2011, at 2:41 PM, paulrowe51 wrote:

    I sure would like to see some research on the effect on the size of the total market for there to now be a viable $200 tablet. We know it increased, but how much?

    And, did the total market increase more, or less, than the number of Amazon Fire tablets sold into it?

    Is there any survey of Fire owners, or more likely, members of Fire dabbling households, that indicates whether they are more, or less, likely to buy an iPad?

    I don't think SUV teams are all that worried about the popularity of affordable compact sedans, and as an investor long in both major tablet providers, I sure would like to know whether that paradigm translates.

    All I read seems to have an un-examined underlying bias or assumption that the tablet market is somehow static and that dividing it up is a zero sum game. I KNOW that's not true, but could someone please step around the fan-boys brawling in the dirt and de-couple "which tablet is best" and "who will sell the most" from the much more important questions: "how many will each company sell?"

    It is entirely likely that choosing whether to invest in Fire or iPad suppliers is a silly and pointless distraction that will leave money on the table.

    MSM has us all thinking everything is a football game. Politics is covered with the same "4 talking heads at a desk switching between players and coaches" method as sports. Now we seem to be suffering a total dumb down of business news as well.

    No wonder they took out underwater 110% mortgages with steep graduated payments they would never be able to make. Somebody told them everybody was doing it and that they were playing a "game." One's homestead is most emphatically NOT a game, but how would they know that? Public school teachers don't know it any better and therefore would never be able to teach it. So please join me in ridiculing those who treat non-sports as a prize fight and everything as a game.

    I appreciate this story, which digs toward what we really need to know.

  • Report this Comment On December 15, 2011, at 2:59 PM, sewdog wrote:

    And, with each Kindle Fire sold, Amazon loses money. I know that the strategy is to make it up by giving KF buyers direct access to amazon.com and free shipping, but what if that strategy doesn't work? Everyone seems to assume that it will, giving Amazon the benefit of the doubt that it is just as unwilling to give Apple. Every negative Apple rumor and comment gets full coverage, every piece of Apple good news is discounted. I agree with the above comment that KF sales are not coming at the expense of the iPad, but instead at the expense of every other low-priced, subpar tablet device being sold. Your headline is an attempt to grad readers, nothing more. I thought Motley Fool was more objective than this. Shame.

  • Report this Comment On December 15, 2011, at 3:07 PM, TMFBreakerRick wrote:

    Sewdog, keep in mind that Microsoft -- one of the most profitable companies on the planet -- also uses Amazon's Kindle Fire strategy with its Xbox 360.

  • Report this Comment On December 15, 2011, at 3:45 PM, Davewrite wrote:

    it's sort of interesting that for a long time analysts like NDP did not count iPads as PCs (although they counted Windows Tablets as PCs) saying they are 'not full function ' like a Windows Tablet or a Mac or PC.

    now analysts are counting b&w E-READERS (the lower cost KIndles) which can't do much except read books as 'iPad equivalents'. (many articles out in the web now showing Kindles in tablet market share with iPads)

    (That seems twisted but then again analysts also count ALL 'Android' phones even cheap ones, millions in asia, that can't run stock Android apps or even google services as 'smart phones' . )

    it's just clear that analysts are just cherry picking data: many analysts and others BENEFIT from having many players rather than one dominant one like apple. For example analysts like NDP like data that shows iPad NOT eroding Windows market share as their customers in the PC industry use the stats for advertising, bank loans, share sales etc.

    seriously how many book readers who bought a $79 was seriously contemplating an iPad? maybe the Kindle fire but not the B&W. Lower end kindles selling vs iPad market share is apples and oranges.

  • Report this Comment On December 15, 2011, at 4:14 PM, 1984macman wrote:

    Please don't support click-bait trolls by posting to their sites, unless it's to warn people away.

  • Report this Comment On December 15, 2011, at 4:23 PM, techy46 wrote:

    If all you need to do is browse and read books then why would you need an iPad? There's lots of applications that only need a portable browser; libraries, pilots, etc.

  • Report this Comment On December 15, 2011, at 6:18 PM, jargonific wrote:

    Why is it that a stock like AMZN picks up supporters in the world of market analysis? To me it seems as if the sole requirement is that it make people money. Do profits really lead such decisions? If they do then why have not these same analysts been pointing out that many financial firms have downgraded AMZN which Thompason Reuters now gives a "2" on profit performance. That compared to a top notch performer within the 6 to 10 range. So for all the hoopla and stock price... it's a bubble. If it were that easy to sell discount online at a web page and sell a low end tablet... why everybody would be doing it. That of course is the point. Everybody will be doing it, and Amazon's product isn't going to stack up in the long run. People want more from something they spend that much time with. Kindle is nice for reading. It helped to kill Borders. Soon something will shift and tech stocks investors will move toward a new target for heavy speculation. The market movers and shakers will then help them make a bundle... and again they will move on. Since news leads all of this there is no question but that there is an end in sight to the grand Amazon can compete with Apple idea... which was after all just a sales promotion gimmick.

  • Report this Comment On December 15, 2011, at 7:52 PM, CraigNotGreg wrote:

    @TMFBreakerRick

    Microsoft is one of the most profitable companies on the planet because it sells Windows, Office, server products, development tools, etc. If you are trying to imply that a significant percentage of its profits are driven by indirect revenue that results from sales of the XBox, it's time for you to hang it up...

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