Apple, by contrast, is probably clearing a gross margin of 30% or more on each iPad
The Kindle Fire that Amazon (AMZN) introduced Wednesday is not a true competitor of Apple’s (AAPL) iPad, Piper Jaffray’s Gene Munster declared in a note to clients posted shortly afterward. But, he quickly added, “it is more competitive than we anticipated.”
On the Fire’s minus side, he cites:
- The Kindle Fire’s 7″ screen compared to the 10″ iPad (a bigger difference than the numbers make it seem; a 7″ screen is only 45% as large as the iPad’s 10″ screen.)
- The Fire has 8GB of storage compared to the iPad at 16GB, 32GB, or 64GB.
- The iPad has two cameras and a 3G option; the Kindle Fire has neither
On the Fire’s plus side he cites the Kindle’s movie, music, and Web browsing capabilities.
Both companies, he writes, are focusing on their core skills:
Munster expects Apple’s share of the tablet market to fall from 90% today to 60% in 2012, and for the Android share to rise from less than 10% to about 30%. The Kindle Fire, he says, likely to be one of the first Android tablet to drive those share gains.
He had previously estimated that Apple would sell 50 million iPads in calendar 2012, and he’s sticking with that number, although he believes it may be “conservative.”