A recent survey shows that the once dominant Kindle e-reader from Amazon (NASDAQ: AMZN) is rapidly losing market share to the Apple Inc. (NASDAQ: AAPL) iPad tablet computer. What’s more, 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 those surveyed owned an Amazon Kindle, but 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 is the fact that customers appear more satisfied with the iPad — and 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 gadget, while only 54% of Kindle owners hit this highest level of satisfaction with their gadget. That’s a significant gap.
What’s more, ChangeWave separately asked prospective e-Reader buyers what 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 (NYSE: BKS) Nook or the Sony (NYSE: 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 the first half of 2011. If this first-generation model has made such significant in-roads, Amazon better have an equally compelling upgrade up its sleeve.
For additional ChangeWave survey results, follow this link.
Jeff Reeves is editor of InvestorPlace.com. Follow him on Twitter at http://twitter.com/JeffReevesIP.