Kindle Fire OS Quick SettingsThe iPad is no longer the only tablet that matters anymore. Over the busy holiday period, iPad sales were said to have stumbled due to the growing popularity of Amazon’s Kindle Fire. At a minimum, Apple missed out on $500 million in sales, Morgan Keegan analyst Travis McCourt said. That figure is likely pushing the $1.25 billion range, though, with between one and two million units being spurned for the much cheaper Kindle Fire.

Despite exceeding sales of the previous quarter, McCourt put his iPad estimates at around 16 million – actual sales is estimated somewhere in the 13 million range. Much of the difference is directly attributed to the Fire, McCourt said. “Based on data from Amazon, we believe the Amazon Fire likely sold 4-5 million units this holiday season, which probably means maybe 1-2 million cannibalized iPad sales at most.”

One to two million in lost sales isn’t much for Apple, who currently dominates the tablet market, but are we starting to see a trend taking flight? Can the Kindle Fire make a significant dent in iPad sales in the long-term? Not if Apple lowers its price of the iPad 2. Numerous reports have hit today suggesting the Cupertino-based company has plans to instill a price-cut down to as little as $299 in response to the Fire. Whether or not that’ll happen is all conjecture at this point.

It’s too early to tell if the Fire will continue to poach potential iPad buyers as 2012 gets underway; so far it’s picked up an impressive head of steam amongst consumers. If Apple does in fact price its iPad 2 competitively with the Kindle Fire, it’ll be very interesting to see what that might do to sales.

Right now, McCourt doesn’t feel a huge landscape shift is on the horizon. When speaking with AllThingsD, McCourt said “Clearly, a lot of folks who buy Kindle Fires simply are not in the market for a $500 tablet. These are customers that either would have purchased a $100 Kindle or no tablet at all. There are some customers who clearly wanted to gift a tablet this year, and it’s cheaper to gift a Fire than and iPad. That’s where the impact comes in.”

Did you go with the Kindle Fire instead of the iPad 2 over the holidays?

[AllThingsD, Motley Fool]

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