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Amazon Kindle Fire Sales Slump as Apple Boosts Tablet Share

Amazon.com Inc. (AMZN) lost share in the tablet market in the first quarter as Kindle Fire sales slumped and Apple Inc. (AAPL)’s iPad widened its lead to 68 percent, IDC said.

Amazon’s tablet, which runs on Google Inc. (GOOG)’s Android operating system, saw its share tumble to about 4 percent, from 17 percent in the December period, the Framingham, Massachusetts-based research firm said today in a statement. Apple’s market share climbed from 55 percent.

The Kindle Fire’s price, at less than half that of Apple’s cheapest iPad, helped Amazon grab the No. 2 spot in the market behind Apple in the Fire’s debut quarter. Kindle devices have historically sold best in the December quarter, when consumers buy them as gifts, said Colin Gillis, an analyst at BGC Partners LP. Sales may also be dropping off as customers delay purchases of electronics in anticipation of newer versions, he said.

“Fatigue is starting to kick in about six months after a product has launched,” Gillis, based in New York, said in an interview. “And it’s natural that Amazon is going to tend to be a better holiday play.”

Amazon shares fell less than 1 percent to $229.45 at the close in New York. The stock has risen 33 percent this year. Apple shares declined less than 1 percent to $581.82.

Worldwide Shipments

Total worldwide tablet shipments more than doubled to 17.4 million units in the first quarter, from 7.9 million units a year earlier. That followed a record 28.2 million units in the fourth quarter, lifted by holiday sales, IDC said. The 38.4 percent drop from the December quarter was steeper than the 34 percent decrease IDC predicted.

The Kindle’s ranking in the tablet industry dropped to third, with Samsung Electronics Co. now in second place. So far, Android hasn’t managed to convert its popularity in smartphones into success in the tablet market, said James Kelleher, an analyst at Argus Research in New York.

“Outside of Samsung, no top-tier manufacturer has stepped up with a great tablet product to take on Apple,” Kelleher said. “Almost as surprising as how strong Android is in smartphones is how inept it is in tablets.”

Last week, ComScore Inc. said that the Kindle Fire grabbed 54.4 percent of the Android tablet market in February, almost double the 29.4 percent it had in December.

To contact the reporters on this story: Sarah Frier in New York at sfrier1@bloomberg.net; Danielle Kucera in San Francisco at dkucera6@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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