Week 3 (#3): Is Apple Kicking Themselves in the Butt...?

An article titled “How the iPhone 4S boosted Kindle Fire sales” discusses how Apple’s slip of share in the fourth quarter of 2011 in the tablet market may have Amazon to blame. Pricing the Kindle Fire at just $199 proved to pay off for Amazon and was a brilliant pricing strategy. After many Apple-loyals paid at least $199 for the new iPhone 4S, they may have opted for cheaper tablets, like the Kindle Fire, rather than spending a hefty $499 on the iPad. Apple iPads slipped from 64% market share in the third quarter to 57% share in the worldwide tablet market in the fourth quarter; while the Kindle Fire had a 14.3% share of the tablet market. Although Amazon won’t reap a wide profit margin pricing the Kindle Fire at just $199, it did succeed in stealing customers away from the competition (Apple in particular). Perhaps the attraction of a low-price tablet will result in lower tablet prices across the entire tablet market; good news for us!!

Source:
http://money.cnn.com/2012/02/16/technology/ipad_market_share/index.htm