Amazon takes its swipe at the iPad: Kindle Fire tablet will sell for half the price

Jeff Bezos, Chairman and CEO of Amazon.com, introduces the Kindle Fire at a news conference, Wednesday, Sept. 28, 2011 in New York. The e-reader and tablet has a 7-inch (17.78 cm) multicolor touchscreen. September 28, 2011, 5:03 pm EDT

NEW YORK, N.Y. - Amazon is taking on the untouchable iPad with a touch-screen tablet of its own.

The company on Wednesday introduced its entry in the rapidly expanding market for handheld computers — a device called Kindle Fire that connects to the Web, streams movies and TV, displays e-books and supports thousands of apps.

It's half the size of an iPad and will be less than half the price when it goes on sale Nov. 15. Amazon is offering the Kindle Fire for $199. The bare-bones iPad sells for $499, the most expensive for $829.

Amazon gave no indication on when it might be available to Canadians.

" Today , Kindle Touch, Kindle Touch 3G and Kindle Fire are available only in the U.S.," a spokeswoman said in an email.

"Unfortunately, I have no further details."

Of course, competing with the iPad won't be as easy as swiping a finger.

Analysts at one research firm, Gartner Inc., say three of every four tablets sold this year will be iPads. Apple sold almost 29 million of them from April 2010 through June of this year.

Amazon sells more than 1 million e-books, 100,000 movies and TV shows, and 17 million songs. It hopes it will succeed where other companies have failed because the tablet is designed to tap into Amazon's massive storehouse of media content.

"The reason they haven't been successful is because they made tablets. They didn't make services," CEO Jeff Bezos told The Associated Press in an interview.

Bezos unveiled the Kindle Fire at a New York media event that was stage-managed much the same way Apple choreographs its product launches. He walked a stage extolling the product while technology sites live-blogged the event.

The CEO also introduced three versions of its popular Kindle e-reader, all with black-and-white screens — a basic model for $79, a touch-screen version for $99 and a touch-screen with 3G wireless service for $149.

Those devices will further pressure competitors like Barnes & Noble as they try to break Amazon's dominance in electronic book sales.

The Kindle Fire's size, with a screen that measures 7 inches diagonal, makes it a close match to Barnes & Noble's Nook Color tablet, which came out last year. But while Barnes & Noble sees the Nook Color as jazzed-up e-reader, Amazon has broader goals for the Fire as a platform for games, movies, music and other applications.

All that content makes the Fire the only credible competitor to the iPad this year, said Sarah Rotman Epps, an analyst with Forrester Research.

"In theory, Sony could do something similar, but they haven't, and it doesn't look like they will," she said. "They have a tablet, but they only went halfway on the services."

Sony started shipping its first iPad-style tablet two weeks ago. It's linked to the company's music and movies stores, and will later get the ability to play some PlayStation games.

Analysts had expected the Fire to sell for about $250. Epps called the $199 price "jaw-droppingly low," and said it would introduce tough competition not just for Apple, but for contending tablet makers like Samsung, Motorola and HTC.

Analysts had speculated Amazon would sell the tablet at a loss, counting on making back some money through book and movie sales. Bezos said that isn't the case, but the company is happy with a slimmer profit margin than other manufacturers.

"We want the hardware device to be profitable and the content to be profitable. We really don't want to subsidize one with the other," Bezos told the AP.

Epps believes Amazon could sell as many as 5 million Fires by the end of the year but will probably sell closer to 3 million because it's coming out so late.

The Fire will run a version of Google's Android software, used by other iPad wannabes, and will have access to apps through Amazon's Android store.

It will not have a camera, as practically every competing tablet does. Bezos said the camera would be superfluous, since practically everyone has one in their phone anyway.

It also lacks a microphone and a slot for memory expansion, common features on other Android tablets. The Kindle Fire will run on Wi-Fi networks but will not connect to cellular networks, as some iPads and many Android tablets can.

The new Kindle e-readers dispense with the keyboard that the device has carried since it launched in 2007. The Kindles will come with on-screen advertising unless customers pay $30 to $40 more.

Bezos said he doesn't see the Fire as eventually replacing the Kindles.

"What will happen is people will buy both. Because they're really for different purposes," he said.

RIM says committed to PlayBook amid price cuts

On Thursday September 29, 2011

BlackBerry maker Research In Motion (RIM) dismissed a report on Thursday that it was pulling the plug on its PlayBook tablet computer.
Major US retailers, meanwhile, slashed the price of the PlayBook by up to $200. The move comes a day after Amazon unveiled a tablet rival with a $199 price tag.
RIM stressed its commitment to the PlayBook after Collins Stewart analyst John Vihn said the Canadian company has stopped production of the device.
"Any suggestion that the BlackBerry PlayBook is being discontinued is pure fiction," RIM said. "RIM remains highly committed to the tablet market."
Sales of the PlayBook have been sluggish since the device went on sale in mid-April with a $499 price tag for the 16-gigabyte model, $599 for the 32GB version and $699 for the 64GB model.
Best Buy, Staples and Office Max were offering the PlayBook for $299, $399 and $499 on Thursday. Office Depot was selling the device for $100 off.
The PlayBook was still being offered for its original price at RIM's online store and through US carrier Sprint.
Amazon unveiled a tablet computer, the Kindle Fire, on Wednesday which costs $199, less than half the price of the market-leading iPad from Apple.
The cheapest iPad costs $499.
During its last quarterly earnings report RIM said it had shipped 200,000 PlayBooks in the quarter. Analysts had expected shipments of 700,000.
Apple sold 9.25 million iPads last quarter.
RIM shares have plunged recently as the Waterloo, Ontario-based company struggles to compete with Apple's iPhone and smartphones powered by Google's Android platform.
RIM shares, which have lost half of their value since the beginning of the year, shed 3.37 percent on Wall Street on Thursday to close at $21.16.
During an earnings call with analysts, RIM co-chief executive Mike Lazaridis said the past few quarters have been "challenging" but expressed confidence the company is "on track to return to growth in the third quarter and beyond."