Apple iPhone 4S was the biggest competitor for the Apple iPad 2 in holiday quarter

Tablet and e-readers are sizzling hot. According to the Pew Internet Project, ownership of these devices among adults in the States doubled in the few weeks between the middle of December and the beginning of January. Tablet sales were led by the Apple iPad 2 and the Amazon Kindle Fire. The latter, a low priced Android device, sold 3.9 million units in the holiday quarter which is tremendous considering that the device launched in November. The Amazon Kindle Fire accounted for a 14.3% share of the market.

The top tablet in Q4 was none other than the Apple iPad 2. Shipments of the Cupertino based firm's tablet rose 39% year-over-year to 15.4 million units from 11.1%. But thanks to the Amazon Kindle Fire, the iPad actually lost some share of the fourth quarter tablet market, from 64% in 2010 to 57% last year. And while IHS Suppli analyst RhodaAlexander wrote in her report that the Kindle Fire has had a "respectable start," it wasn't the Amazon device or the Samsung GALAXY Tab that was the top competitor for the Apple iPad. That distinction belonged to the Apple iPhone 4S.

With only so much money to be spent on gifts and personal items, Apple might have cannibalized itself by launching the Apple iPhone 4S in October which cut into disposable income available to spend on its tablet, according to the IHS report. Still, the iPad finished the year with 40.5 tablets shipped. While that was a massive 168% increase over 2010's total of 15.1 million units, the tablet market expanded so much that the 62% share of the market held by the Apple iPad in 2011 was actually down from the 87% slice of the pie Apple held in 2010. Samsung finished second last year with a 9.4% market share with 6.1 million tablets shipped. Amazon was next with a 6% share. The report also said that sales of Android tablets in Q4 were helped by severe price slashing in order to compete with the Amazon Kindle Fire and the Barnes and Noble Nook.

Looking ahead to this year, the report says that because of the low priced Android tablets, and Google's acquisition of Motorola Mobility, vendors are looking to Windows 8 tablets as a way to make more money "Watch for a surge of Windows 8 andARM microprocessor-based tablets in late 2012 and early 2013," says the IHS report. The report basically parrots recent speculation that the next Apple iPad will feature a QXGA Retina display and voice activated personal assistant Siri. iHS Suppli sees strong demand for the new Apple tablet outstripping supply in its first few months. Going back to the Amazon Kindle Fire, Alexander says the long term success of the tablet depends on the success of Amazon's business plan which calls for tablet sales bringing in orders to Amazon for content, apps and cloud based storage.

source: eWeek