SANTA MONICA, Calif. – Amazon unveiled four new Kindle Fire tablet computers Thursday, including ones with larger color screens, as the online retailer steps up competition with Apple ahead of the holiday shopping season.
Amazon.com Inc. showed off the larger Kindle Fire amid expectations that Apple Inc. will introduce a smaller iPad as early as next week.
The larger Fires will have screens that measure 8.9 inches diagonally, compared with 9.7 inches for the iPad. The original Fire had 7-inch screens.
The basic version of the larger Fire will sell for $299, or $100 less than the cheapest iPad.
Its very clear today that there are two names in the market for tablets. One is Amazon and one is Apple, said Carolina Milanesi, research vice president at Gartner.
Seven out of every 10 tablets sold in the second quarter were iPads, according to IHS iSuppli. Tablets using Googles Android operating system have not been able to carve out a significant stake. Amazon is trying to change that with the new Fires, which run a modified version of Android.
Amazon has been selling lower-priced tablets at thin, if any, profit margins to boost sales of digital items from its online store. As a result, it has been able to compete with the iPad on price.
The basic, 7-inch Fire model will cost $159, down from $199 for the original model, which sold out last month. Amazon says its 40 percent faster, has twice the memory and a longer battery life than the old version. It will start shipping Sept. 14.
I want one, BGC Partners analyst Colin Gillis said about the $159 Kindle Fire. Its a great price, and its certainly not something thats going to be making money for them initially. Its great for consumers. How great a business strategy (it is) for Amazon remains to be seen.
Amazons bread-and-butter is not its Kindle gadgets but the movies, books and music that people consume through them.
By contrast, Apple sees content sales as a sideline and wants to make a healthy profit on every device sold. For example, the cheapest iPad costs $399 and the most recent models start at $499.