Evercore

Evercore: Amazon will own 50% of Android tablet market in '12

December 5, 2011: 10:49 AM ET

The Kindle Fire may "vaporize" the market for every for-profit tablet maker except Apple

Kindle Fire

In a note to clients Monday about Apple (AAPL), Evercore Partners' Robert Cihra summarizes the impact of Amazon's (AMZN) Kindle Fire on the tablet market in stark terms:

While Amazon's Kindle Fire has come out of the gates strong, as expected, we see Apple maintaining its competitive lead, if anything accentuated by what now looks like the only tablet to so far mount any credible iPad challenge apparently needing to do so by selling at cost; not to mention Amazon's success may just vaporize other "for profit" Android tablet OEM roadmaps (e.g., we est Amazon 50% of all Android tablets in CY12). Meanwhile Apple goes on as the only vendor able to cream off the most profitable segment of each market it targets, whether tablet, smartphone or PC. (emphasis ours)

As for Apple's prospects in the current quarter, Cihra (formerly at Caris & Co.) has

  • Trimmed his Q1 2012 Apple revenue estimate to $39.1 billion (from $39.4 billion)
  • Trimmed his EPS estimate to $10.26 from  ($10.28)
  • Trimmed his iPad estimate to 14 million units (from 15 million) to account for "channel inventory reductions heading into March's iPad refresh"
  • Raised his Mac estimate to 5.2 million units (from 5.0 million) on strong sales of the MacBook Air and Pro
  • Raised his gross margin estimate to 41.1% on the rising contribution of the iPhone (estimated sales this quarter: 30 million units) to the company's bottom line.
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