Amazon Unveils $199 Kindle Fire Tablet

[george]

Amazon Unveils $199 Kindle Fire Tablet

Amazon.com Inc. (AMZN), the world’s largest online retailer, unveiled its Kindle Fire tablet computer, taking aim at Apple Inc. (AAPL)’s bestselling iPad with a device that’s smaller and less than half the price.

The Kindle Fire will have a 7-inch display and sell for $199, compared with $499 for Apple’s cheapest iPad, Amazon executives said in interviews with Bloomberg Businessweek. The device, a souped-up version of the Kindle electronic- book reader, will run on Google Inc.’s Android software, the Seattle-based company said.

Chief Executive Officer Jeff Bezos is betting he can leverage Amazon’s dominance in e-commerce to pose a real challenge to Apple’s iPad, after tablets from rivals such as Hewlett-Packard Co. and Research In Motion Ltd. have fallen short. Sales of Amazon’s electronic books, movies and music on the device may help make up for the narrower profit margins that are likely to result from the low price, said Brian Blair, an analyst at Wedge Partners Corp. in New York.

“Amazon is really the only other guy, the only other potential tablet player, that has a similar offering to what Apple has,” Blair said in an interview last week. “If you look across their product offerings, they have content that none of the other tablet makers currently have because they have content on the media side.”

Amazon shares rose $8.59, or 3.8 percent, to $232.80 at 9:47 a.m. New York time on the Nasdaq Stock Market. The stock had increased 25 percent this year before today.

Apple rose $3.46 to $402.72. Shares of Barnes & Noble Inc., maker of the Nook e-reader, fell 51 cents, or 3.9 percent, to $12.70, on the New York Stock Exchange.

Tablets Surge

The Kindle Fire doesn’t have an embedded camera or a microphone. The device offers Wi-Fi connectivity, though not 3G access, and comes with a 30-day free trial of Amazon Prime, the company’s $79-a-year membership service that includes streaming video and free two-day shipping.

Amazon has painted over the rough surfaces of Google’s Android operating system with a fresh and easy-to-use interface and tied the device closely to its own large and growing content library of movies, magazines and music. Cambridge, Massachusetts-based Forrester Research Inc. predicts the tablet market will grow 51 percent a year through 2015.

While the new Kindle will add to Amazon’s sales, estimated by analysts to rise 32 percent to $64.6 billion in 2012, the company may disappoint if the tablet doesn’t bring in revenue quickly, Steve Weinstein, an analyst at Pacific Crest Securities in Portland, Oregon, said in a note this week.

Consumer Reaction

Consumer reaction to the device will play a “critical” role in the company’s growth, he said. Analysts on average predict Amazon’s gross margin, a measure of profitability, will fall to 22.17 percent in 2012 from 22.35 percent last year, according to a Bloomberg survey. Gross margin is the percentage of sales left after subtracting production costs.

“Without success in tablets, investor growth expectations for 2012 could prove too aggressive,” Weinstein said Sept. 26.

Apple started selling the original iPad in April 2010, and introduced the iPad 2 in March of this year. The touch-screen device, which has a 9.7-inch diagonal display, is already Apple’s biggest source of revenue after the iPhone. The company shipped 9.25 million iPads in the quarter that ended June 25.

Apple also leads the market for mobile applications, with more than 425,000. Over 100,000 of those apps are custom- designed for the iPad.

Other Tablets

Two other tablets have failed to make a dent in Apple’s dominance so far. Research In Motion Ltd.’s PlayBook, introduced in the second quarter, shipped 200,000 units, less than half of what analysts predicted. Analysts had already cut estimates for full-year PlayBook shipments to an average of 2.2 million, according to a Bloomberg survey.

Hewlett-Packard Co. (HPQ), meanwhile, discontinued its TouchPad in August -- only about a month after its debut. And Microsoft Corp. (MSFT), the world’s largest software maker, may not have its Windows operating system for tablets ready until next year.

The iPad accounted for 68 percent of all tablets shipped worldwide in the second quarter, according to Framingham, Massachusetts-based research firm IDC. Other Android-based tablets, including models from Motorola Mobility Holdings Inc. and Samsung Electronics Co., accounted for 27 percent.

While Amazon has the clout and the content to take on Apple, the company will have to go beyond the tablet released today to be a serious competitor, Blair said.

“I don’t actually believe 7-inch is going to be a viable tablet for anybody,” he said. “It’s a ‘tweener. A real tablet offering has got to be a 10-inch screen.”

-- Bloomberg.com 2011-09-28

[nikster]

“Amazon is really the only other guy, the only other potential tablet player, that has a similar offering to what Apple has,” Blair said in an interview last week. “If you look across their product offerings, they have content that none of the other tablet makers currently have because they have content on the media side.”

ROFL. Where do they find these people? Amazon is exactly like Apple, obviously, except for the hardware. Oh, Apple's a hardware maker. Oh well then. There goes that theory.

The Kindle is a great ebook reader, but really not a tablet. This one makes a lot of sense as Kindle version 2.0 - with color you get media content, magazines, and it's not that much more expensive. It doesn't really seem to try to be an iPad competitor.

[Tywais]

http://www.youtube.com/watch?v=hsH0GKUKmXM

[Lite Beer]

EDITORIAL

Kindle Fire's easy answer to the iPad: affordability

The Nation

Consumers benefit as tablet sector is latest to see dominant product challenged by a quality, cheaper rival

It's good news for customers, or so it seems. Amazon's launch of Kindle Fire is very likely to spark a real computer tablet price war. The latest addition to the market is much cheaper than Apple's iPad, and although the newcomer lacks a key element, a camera, it's still attractive enough to sway people seeking their first computer tablet or a substitute for what they already own. The obvious plus side is that the public is getting more and more choices, a market situation that naturally will bring the prices down.

The catch is, you buy one product today and you'll likely grit your teeth in anger after two weeks. Kindle and iPad lovers can testify to that. The race among new, more powerful and more sophisticated innovations has been so intense that big manufacturers hold blueprints of the next version in their hands the day they launch a gadget. Speculation has been strong that Kindle Fire 2 is only a few months away. Early adopters, who haven't even laid hands on Kindle Fire, are already squirming at the prospect of seeing its value drop drastically in December of January.

But then again, Amazon has been telling its customers that, given that it's quite possible you paid more for your sunglasses, buying a cheap gadget whose value declines quickly may not be such a big deal. Its Kindle 3, an exclusive e-reader, has proved vastly popular despite the fact that the iPad also contains a "Kindle app" and its own e-reading app. One of the big reasons is simple: Kindle 3 is cheap.

Kindle Fire has no camera, but it has Flash, is lighter, similarly slick on other technical fronts and much cheaper. Even if Apple refuses to be drawn into a price war, other competitors of the iPad will find it hard to keep their tags. Already, they are under pressure to compete with iPad in prices after failing on the specs front. With Kindle Fire in town, allowing its users to tap into Amazon's enormous pool of content, the likes of Samsung's Galaxy Tab or RIM's Playbook will feel greater heat. The same will go for all e-readers in the market like Barnes and Noble's Nook.

The TV industry is already experiencing a fierce price war. Big, flat screens with greater and greater sharpness have become cheaper and cheaper. Five years ago, the best you could get for Bt100,000 was an average-quality 40-inch not-so-slim "HD-ready" TV. Today, with that money, you can buy two ultra-slim 55-inch LED or even 3-D tellies. iPad is like Sony's Bravia of a few years ago. The day will come when price differentiation - the concept of keeping a product's price high to be seen as "different" from the others - is no longer bought by customers.

This could be the tablet industry's turn. One dominant product can keep the prices high, but things are likely to change when a genuinely close rival comes along. Amazon detractors have taunted Kindle Fire by adding "sale" at the end of "Fire". That might turn out to be true if a price war gets ugly or something else goes wrong. Consumers, however, have nothing to lose from that. For example, a tablet firesale could help the Thai government, which is suffering a big headache due to several extravagant election promises, one of which involves free computer tablets for underprivileged students.

As far as content goes, however, the fierce competition in the tablet market has not yet translated into something that really empowers content providers. The power to bargain for profit sharing remains largely in the hands of device manufacturers, a situation that has not, for example, liberated journalists from the shackles of print, production and delivery costs.

In the end, though, it is believed that an equilibrium will emerge to provide content providers with greater incentives to do away with their businesses' costly, conventional means. In the meantime, customers will enjoy decreasing prices and growing choice. Hopefully, that is a good start

-- The Nation 2011-10-02

[dominique355]

I have the previous, monochrome Kindle and found it quite pleasant to use and handy when going on a vacation where I don't have to bring along my 6 or 7 books am reading. (I like to read several books at the same time).

Then I discovered the Amazon Kindle App for my HTC Flyer tablet (also 7") and now I mostly read my Amazon/Kindle books on the HTC tablet. I addition, the HTC tablet can do all the things the new Kindle Fire promises: web browsing, color, touch screen etc.

About touch screen: On the Kindle I switch pages by pushing a button on the right (or on the left) of the screen. Practical, because no accidental switching. On the HTC Flyer I swipe to the next/previous page and a touch on the screen brings up the dictionary, sometimes involuntary.

For the moment Amazon does not ship the Fire to destinations outside the US. So we will have to wait or have someone in USA to forward to us.

[cdnvic]

If they want to answer the iPad they need to go worldwide. They currently say they have no plans to release it outside the US.

[sfokevin]

If they want to answer the iPad they need to go worldwide. They currently say they have no plans to release it outside the US.

The problem with worldwide distribution is that Amazon's business model for this device is that it is a subsidized portal for you to buy things from their Amazon sites these sell US products that are difficult to ship abroad or restrcted to US consumers by law...

[Gary A]

It really doesn't look like anything I would be interested in. I would shun it for the same reason I shun Apple. I don't like proprietary devices that depend on the manufacturer for content and support nor do I like touch screens that get all smeared up.

[burgdawg]

.....I've had my 3G WiFi Kindle for 3 years now, rocks.

I get books worldwide, no download fee, no problem. Looks and runs brand new. I read via Kindle daily.

Battery doing fine. You can read in harsh glare, no problem. Unless you have physically held and read a Kindle in your hands, there is no way of guessing

how good the screen resolution is. You forget ABOUT the Kindle and get absorbed into your book. This was Amazon's design goal all along.

If you are purchasing a subscription like a magazine or newspaper, there are some fees.

The Amazon Cloud is amazing. Stores all my reading choices. Many free books.

You can download many classics NOW, to your desktop or laptop. No need for another electronic device.

Like all of Mark Twain's works and many classics in the public domain. Just go to Amazon's website and download their reader. Download many free books.

Google up an old favourite book or check out Amazon's free offerings. You can download free Kindle reader software.

Amazon Silk (the Fire browser) could prove the difference-maker. Am all for buying one.

I think Amazon will ship Internationally, just give them 4-6 months. What is next, Amazon stores?

I recall many detractors of my e-Ink non-backlit Kindle. Of course, once they used mine, they all wanted to make off with it for

a week at a time. The only problem with my Kindle is that once people borrow it, they do not want to give it back.

I get 30+ days of reading on a single charge-up with my Kindle, with 3G and WiFi off.

Apple does many things well, like International languages. My Kindle does not support Tai script.

Reading is a cocoon experience. I really do not want to be distracted by incoming emails and Skype calls from people that need to get a life.

Or get off FaceBook and Farmville. The key to reading in low-light conditions is to use a miner's headlamp. The clip-on lights unbalance any Kindle or tablet.

And a backlit unit sucks battery life. Who hasn't taken a long bus ride in the Kingdom? I ALWAYS pack my Kindle. My NetBook stays home.

If anyone can pull off a successful tablet besides Apple, it will be Amazon. it is all about ease of content access and the Amazon store and book offerings are impressive.

The Store is key.

Would I buy a Kindle Fire? Yes, hands down. I think the Fire's 7" size will be a plus, give it time.

I just ordered Jim Rickard's excellent book "Currency Wars" and within 20 seconds, began reading it on my Kindle in Thailand.

The Amazon store is Global.

Physical kit from their various suppliers is too expensive to ship worldwide, but this is due to high shipping expense.

All digital stuff from Amazon is available 24/7.

Hope this helps......

Edited November 19, 2011 by burgdawg

[Phil Conners]

Funny like they're harping on about how it doesn't have a camera. A front facing camera, perhaps, for video telephony but is anyone really going to use a tablet as a camera?