Tablet battle brewing between Kindle Fire & iPad 3

Apple’s iPad smashed sales records this past holiday season. Amazon’s Kindle Fire, however, still managed an impressive debut. According to IHS iSuppli estimates, the online retail giant shipped nearly four million units of the device in less than two months. A drop in the bucket compared to the 15.4 million iPads Apple sold last quarter, but enough for a 14 percent market share.

With the iPad 3 right around the corner, the Kindle Fire is in a unique position – one that could help or hinder it against Apple’s juggernaut.

Tablet battle brewing between Kindle Fire & iPad 3

“Kindle Fire shipments in the fourth quarter came right in line with the IHS early December forecast of 3.9 million units, representing a respectable start for the Fire,” said Rhoda Alexander, senior manager, tablet and monitor research for IHS. “However, the long-term viability of the product will hinge on the success of Amazon’s business gamble, which depends on tablet sales driving substantial new online merchandise sales at Amazon.com in order to attain profitability.”

The Kindle Fire’s launch success catapulted it past the number two Galaxy Tab for the quarter and bit into Apple’s pie, Alexander revealed. Its short two-month stint in stores earned the Fire just six percent of the 2011 tablet market, while Samsung, selling its tablet for the full 12, garnered nine percent.

Barnes & Noble declined to provide hard numbers for its Nook Tablet’s November debut, but it wasn’t far behind. IHS estimated the bookseller moved 3.25 million units, giving the company a five percent share. Asus, the number five ranked tablet maker, shipped just over 2 million for the year. Apple still held 62 percent of the market when all was said and done.

Alexander noted that the Kindle Fire and Nook Tablet “created chaos” for both Apple and competing Android pads with their respective $199 and $249 price tags.

“The surge in non-iPad shipments in the fourth quarter was achieved at considerable financial cost, with sharp price reductions across most of the competing Android tablets and actual product giveaways from a number of vendors as part of promotional efforts for other electronic products,” said Alexander.

According to the researcher, Apple will easily make up for the quarterly drop when it ships the iPad 3. Recent rumors suggest the Cupertino company will unveil the device in March, with a release date that same month. The iPad 2 sold one million units in its opening weekend last year.

Amazon and Barnes & Noble may need to pull out a new trick beside being inexpensive iPad alternatives. If history is any indication, Apple will have hype to spare over the new two months.