Fri, Sep 30, 2011 - Page 10 News List

Amazon fighting Apple’s iPad with Fire

AP, NEW YORK

Amazon is taking on the untouchable iPad with a touch-screen tablet of its own.

The company on Wednesday introduced its entry into 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 on Nov. 15. Amazon is offering the Kindle Fire for US$199. The bare-bones iPad sells for US$499, the most expensive for US$829.

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 last year 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,” chief executive Jeff Bezos said 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 onto a stage extolling the product while technology sites live-blogged the event.

Bezos also introduced three versions of its popular Kindle e-reader, all with black-and-white screens — a basic model for US$79, a touch-screen version for US$99 and a touch-screen with 3G wireless service for US$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 17.7cm diagonally, makes it a close match to Barnes & Noble’s Nook Color tablet, which came out last year.

However, while Barnes & Noble sees the Nook Color as a 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 the capability for some PlayStation games will be added later.

Analysts had expected the Fire to sell for about US$250. Epps called the US$199 price “jaw-droppingly low,” and said it would be tough competition not just for Apple, but for contending tablet makers like Samsung, Motorola and HTC (宏達電).

Analysts had speculated that Amazon would sell the tablet at a loss, counting on making back some money through book and movie sales. Bezos said that is not the case, but that 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 said.

Epps said she believed 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 has come out so late.

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