Amazon unveils 199-dollar Kindle Fire to challenge iPad

By Andy Goldberg Sep 28, 2011, 15:22 GMT

New York - Web retailer Amazon on Wednesday unveiled its would-be challenger to Apple's iPad, a 7-inch touchscreen tablet called Kindle Fire that will sell in the United States for just 199 dollars.

The new device is a souped-up version of Amazon's Kindle e-reader and will cost less than half the price of the 500-dollar iPad. It will be available on November 15, but Amazon began accepting advance orders on Wednesday.

While it clearly lacks many features of Apple's genre-defining gadget, such as a microphone, camera, 3G connectivity and a 10-inch screen, Amazon is hoping that its low price, handy size and tight integration with a web of Amazon services will attract millions of customers.

'We're building premium products at non-premium prices,' Amazon chief executive Jeff Bezos said at a press conference to unveil the device.

The Kindle Fire runs on a version of Google's Android operating system that has been specially adapted to work seamlessly with Amazon's web offerings, from its best-selling retail outlet, to the company's streaming video and music services.

Amazon currently offers 100,000 movies and TV shows through its instant streaming service and 950,000 e-books that can be instantly downloaded or read on the Kindle. Amazon also offers the Cloud Drive service, in which users get 5 gigabytes (GB) free to store music, videos, photos or documents, and the Cloud Player music streaming service.

'We asked ourselves, 'Is there some way we can bring all of these things together into a remarkable product offering customers would love?'' Bezos said. 'Yes, the answer is Amazon Kindle Fire.'

Bezos said the Kindle Fire also features an automatic data backup to Amazon's cloud infrastructure and a new web browser caller Amazon Silk that pre-loads pages to Amazon's servers to make mobile browsing quicker.

Other technical details of the wi-fi-only device include 8 GB of storage, a 1024 x 600 pixel multi-touch display, and a 1-gigahertz processor from Texas Instruments.

Other companies have so far failed to dent Apple's dominance of the tablet market, with the iPad controlling about 80 per cent of the US tablet market share, according to Strategy Analytics.

Would-be iPad competitors from the likes of HP, Samsung and RIM all were priced at around the same level as the iPad, but failed to offer customers better value than the market leader.

With the Kindle Fire costing less than half the price of the iPad, Amazon's device could shake up the tablet market, especially as Amazon already has a loyal customer base of millions, and can sell the device directly from its website without needing to split the sales price with other retailers.

Before Wednesday's announcement, analysts forecast that Amazon could sell as many as 5 million tablets in the fourth quarter if the device was priced at under 300 dollars. The 199-dollar price point could sharply increase that number.

News of the product's unveiling sent Amazon's share price up more than 3 per cent in early Wednesday trading.

Early review of the device were overwhelmingly positive. 'Amazon, not Apple, just mainstreamed the tablet market,' said CNet's Molly Wood, who called the device an 'iPad killer.'

'The Amazon Fire is an attractive tablet at a killer price point with instant access to all of your stuff,' said Mashable.com's Lance Ulanoff. 'It could be a no-brainer purchase for Amazon customers.'

The website TechCrunch, said the device may not unseat the iPad as the tablet king but would certainly be the top Android tablet.

'For the average consumer, the Fire is the perfect low-cost iPad alternative,' said TechCrunch's Matt Burns. 'Amazon just won the Android tablet wars with the 199-dollar Kindle Fire.'