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Kindle Fire already headed for No. 2 in the tablet biz

Research firm IHS iSuppli is already making the call after only two weeks on the market. The low-cost tablet will have surpassed rivals and come in behind the iPad.

The Kindle Fire has proven to be an instant hit.
Sarah Tew/CNET

Well, it certainly didn't take long for Amazon's Kindle Fire to bring on the heat.

After only two weeks in the market, the Kindle Fire has skyrocketed ahead of many of its tablet competitors, according to IHS iSuppli. The market researcher is so confident in the Kindle Fire's success, that is already projecting it as the second-most popular tablet in the world, behind only Apple's iPad.

The success of the Kindle Fire answers what had been a lingering question about the tablet business: whether consumers wanted tablets, or just iPads. The Kindle Fire's $200 price tag, along with other tablets that saw heavy discounts around Black Friday, are resetting expectations about how much consumers will pay for such a device.

That may bode poorly for manufacturers looking to compete directly against the iPad with more expensive components, larger and brighter displays, and even cellular service. So far, those companies have only seen middling interest in their products.

IHS projects Amazon will ship 3.9 million Kindle Fire tablets in the fourth quarter, giving it 13.8 percent of the global market, well ahead of No. 3 Samsung, which is expected to have 4.8 percent of the market despite offering a wide range of Galaxy Tab tablets. Both are still far behind Apple, which will hold 65.6 percent of the market.

"Nearly two years after Apple Inc. rolled out the iPad, a competitor has finally developed an alternative which looks like it might have enough of Apple's secret sauce to succeed," said IHS analyst Rhoda Alexander.

The Kindle Fire was largely helped by its more affordable price tag, significantly undercutting most other tablets. Amazon has an advantage because it can sell the product at a loss or minimal profit and make it up later by selling products and services through the device.

In fact, the most successful tablets have either started low, or dropped to a more affordable level. Nielsen had previously pegged the Hewlett-Packard TouchPad, which due to a fire sale that brought its price down to $99, as the second most popular tablet.

The BlackBerry PlayBook also performed well over Thanskgiving weekend, thanks to a massive discount that brought its price down to $200. Best Buy said it sold out of the devices.

As a result of the Kindle Fire's strength, IHS upped its forecast for total global tablet shipments by more than 4 million to 64.7 million units, representing a 273 percent increase over a year ago. Likewise, IHS boosted its longer term forecast, with shipments now expected to rise to 287.2 million by 2015.