Amazon Fires Up Low-Cost Tablet Market
Amazon.com Inc. (Nasdaq: AMZN)’s new Android tablet, the Kindle Fire, is being heralded as the first true iPad competitor, a distinction other tablets have had but quickly lost. But the Fire just might merit the lofty label thanks to its specs and $199 price tag.
“Amazon just changed the tablet game. Mark down the day on your calendar,” The Verge Editor Joshua Topolsky tweeted during the tablet’s unveiling Wednesday.
At only $199, Amazon’s tablet is $300 less than Apple Inc. (Nasdaq: AAPL)’s cheapest option, although it lacks a camera, mic and 3G access. The device runs a modified version of Android Gingerbread, includes 8GB of memory, supports side-loaded Android apps and includes free cloud storage for its library of media, books and video. It also has a cloud-based Web browser, dubbed Amazon Silk, that predicts a user’s search query as it's being entered. (See Android Cheat Sheet: How to Beat the iPad 2 and Tablet Wars: iPad 2 vs Android 3.0.)
Amazon also introduced a smaller touch-screen version of the Kindle for $99 and a 3G option for $149 on AT&T Inc. (NYSE: T), as well as dropping prices on the older Kindle to $79. The Fire will ship on Nov. 15.
Reactions from live blogs and Twitter streams were largely positive during Amazon’s unveiling. Ovum Ltd. analyst Jan Dawson called the Fire really well thought through, noting that the “Kindle Fire is so much better than any Android tablet in terms of wrapping a broad ecosystem around it.”
It's not just the ecosystem, but also how it's integrated, according to Informa Telecoms & Media analyst David McQueen. He says that the Fire's cloud services could be the real game-changer in the tablet market, drawing more new users to the cloud. (See There's a Niche in the Mobile Cloud.)
“Amazon will finally prove to the world that size doesn’t matter but value for money does, which will be a big lesson for RIM with its Playbook and for other players who have already tried to launch tablets with 7" [inches] or less,” McQueen adds in a research note.
McQueen wasn’t the only one to draw comparisons to BlackBerry ’s PlayBook. Engadget says that the hardware is similar, less a few physical inputs, but that the "software performance seems quite smart at this point."
Some, like NPD Group Inc. analyst Ross Rubin also believe that the smart services integration on the tablet suggest that Amazon could tackle the phone space next.
For the wireless operators, an important differentiator for tablets will be including Long Term Evolution (LTE) for connectivity, but there will always be a lot of consumers for which Wi-Fi will be enough. These consumers also aren’t likely willing to fork over $700 for an LTE tablet either. (See AT&T's First LTE Tab Is for Big Spenders.)
Amazon’s Fire appears to have all the right specs to tap into a growing market of consumers who want a feature-packed tablet without a hefty price tag or monthly commitment. (See Lessons From the $99 HP Tablet Rush.)
Read up on the highs and lows of the tablet market below.
- Tablet Shipments to Reach 253M By 2016
- RIM Plans a Q3 PlayBook Revival
- The Mystery of TabCo
- HP Brings TouchPad Back From the Dead
- Moto Mobility Promises 5 LTE Devices for 2011
— Sarah Reedy, Senior Reporter, Light Reading Mobile