SEATTLE – Amazon.com Inc. on Wednesday unveiled the Kindle Fire tablet for $199, posing a big challenge to Apple’s iPad. The tablet will go on sale Nov. 15 and people can start pre-ordering Wednesday.
The new tablet, which works off a customized version of Google Inc.’s Android operating system, has a 7-inch screen and can access Amazon’s app store, streaming movies and TV shows.
“We asked ourselves, “Is there some way we can bring all of these things together [web service, Prime, Kindle, instant video and its app store] into a remarkable product offering customers would love?'” Amazon Chief Executive Jeff Bezos said at the company’s launch event in New York City. “Yes, the answer is Amazon Kindle Fire.”
Amazon shares recently rose 2.7 percent to $230.02.
In addition to the Fire, Amazon also introduced on Wednesday a touch-screen e-reader called Kindle Touch. The device, a black-and-white product that doesn’t have a keyboard found on previous Kindles, will cost $99 for the Wi-Fi only version and $149 with 3G cellular connectivity. Both will start shipping Nov. 21.
He also unveiled a non-touch-screen Kindle for $79 that’s shipping starting today. Previously, the cheapest Kindle was a $114 ad-displaying version.
The new Kindles will compete against Barnes & Noble Inc.’s Nook, an e-reader that starts at $139 and has a $249 version with a color screen. Amazon’s Fire tablet, meanwhile, is seen benefiting from the company’s relationships with various content providers, including film, TV and book companies.
Questions, though, remain about the device’s technical limitations and lackluster selection of apps, especially in comparison to the iPad. The device doesn’t have a camera or microphone, and it doesn’t offer cellular connection, working only with wi-fi.
Nonetheless, Janney Capital Markets analyst Shawn Milne expects between 2 million and 3 million tablets will be shipped in the fourth quarter before the analyst expects a beefed-up version, possibly with a 10-inch screen and dual processor, to become available early next year.
A bevy of new and upgraded tablets and e-readers are on the market. See how the base models for the different devices stack up, including Amazon’s new Kindle Fire tablet.
Amazon, though, appears to be following the same formula that has helped to make its Kindle the de facto standard for dedicated e-readers and the bestselling product in Amazon’s history. Specifically, with the new tablet, Amazon is offering an attractively priced device with basic, easy-to-use features, and accompanied by an intense promotion campaign on the company’s heavily visited website.
Apple’s iPad, credited with kicking off the consumer tablet computer market, has won plaudits for its ease of use, elegant design and selection of over 90,000 apps that transform it into everything from a video player to a DJ turntable. The iPad remains the most popular tablet by far, having sold 29 million versions since its introduction and owning more than two-thirds of the market.
So far, iPad rivals have struggled to compete with the device’s price, functionality and popularity. As a result, competitors like Research In Motion Ltd.’s PlayBook, Hewlett-Packard Co.’s TouchPad, Samsung Electronics Co. Ltd.’s Galaxy Tab and Motorola Mobility Holdings Inc.’s Xoom have failed to attract mass audiences.
Another advantage is Amazon’s long-standing relationships with consumers, who give the company sensitive information, including email addresses and credit card information. That would make it easy for Amazon to market additional products for its tablet, as well as charge for them.
In addition, by linking Amazon’s Prime membership with the tablet, the company could help its core retail business. Prime members, who receive free shipping on products purchase, spend four times the amount of the typical Amazon customer, Janney’s Milne said.
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