A research note, made public by Cnet, from investment bank Morgan Keenan indicates that Apple might have taken a larger than expected hit from sales of Amazon's Kindle tablet during the Christmas shopping season. The report estimates that "maybe 1 [million to] 2 million" in Kindle sales came at the expense of Apple. "We are lowering our unit shipment estimates for iPad in the quarter," the report says, "from 16 million to 13 million. Based on data from Amazon, we believe the Amazon Fire likely sold 4 [million to] 5 million units this holiday season".
The report concludes that "We expect iPad revenues to generate 21.3 percent of revenues in the December quarter for Apple, up from 17.2 percent in the year-ago period, although down from 24.3 percent in the previous quarter". That kind of dent is almost certainly a big reason why Apple apparently plans to slash the price of iPad 2 when they announce iPad 3, to an astonishing $299. If the differences between iPad 3 and iPad 2 are as narrow as between 2 and 1, Apple is likely to pick up a lot of new customers. That's still pricier than Kindle's $199 price tag, and it's still going to sting for the 16 million or so people who paid full price over the holidays, but with a bigger screen and more features, a mere hundred dollar difference is a bargain.
In the meantime, Amazon can bask in the glow of having successfully competed with Apple, and probably make Microsoft feel very self conscious.