iPad torches Kindle in e-book market

The Apple tablet's sales have gained by almost exactly the rate that Kindle's have lost.

By InvestorPlace Dec 1, 2010 10:33AM

Credit: (© Justin Sullivan/Getty Images)
Caption: Apple iPadBy Jeff Reeves, editor of InvestorPlace.com

A recent survey shows that the once-dominant Kindle e-reader from Amazon (AMZN) is rapidly losing market share to the Apple Inc. (AAPL) iPad tablet computer. Customers who own the iPad have a higher rate of satisfaction, and future buyers are more likely to pick up the Apple gadget than a Kindle -- signs that the Kindle is fighting a major uphill battle.

In November, ChangeWave Research asked more than 400 e-reader owners about their habits. The most telling finding was that the Amazon Kindle saw a sharp decline in current ownership that almost exactly equaled the gains by Apple and its iPad.

Specifically, back in August, 62% of people surveyed owned an Amazon Kindle. Only 47% owned the e-reader in the latest November survey. That’s a drop of 15 percentage points. On the other hand, Apple’s share leaped from 16% to 32% -- a gain of 16 percentage points.

That’s a troubling sign for Amazon. But what is even worse news for AMZN execs are the facts that customers appear more satisfied with the iPad and that prospective buyers appear more likely to purchase the tablet computer over the Kindle.

According to ChangeWave, 75% of iPad owners said they were very satisfied with their gadgets, while only 54% of Kindle owners hit this highest level of satisfaction with theirs. That’s a significant gap.

ChangeWave separately asked prospective e-reader buyers which product they would be picking up over the next 90 days, and 42% said an iPad, while only 33% were looking for a Kindle.

The good news is that Amazon has not yet been relegated to the bottom of the barrel like the Barnes & Noble (BKS) Nook or the Sony (SNE) Reader, which barely even registered in many of the questions on the ChangeWave survey. But if Amazon can’t figure out a way to compete with the iPad in a hurry, it could see its market share decline even more.

After all, rumors are that an iPad 2 is set for launch in 2011. If this first-generation model has made such significant in-roads, Amazon better have an equally compelling upgrade up its sleeve.

Click here for more ChangeWave survey results.

Also, read about how a ChangeWave survey is predicting that Apple holiday sales are set to soar.

Jeff Reeves is editor of InvestorPlace.com. As of this writing, he did not own a position in any of the stocks named here. Follow Jeff on Twitter at http://twitter.com/JeffReevesIP.


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