Thursday's Amazon announcement surrounding the Kindle Fire HD is almost certain to cause headaches for Apple's iPad designers. The new Kindle Fire HD gives customers an alternative option from the hugely popular Apple device.
Jeff Bezos holding up the update Kindle Fire and the new 8.9in Kindle Fire HD. (Credit: The Verge)
Amazon.com Inc. (Nasdaq: AMZN), the No. 1 e-retailer, announced a new model of its Kindle Fire tablet, priced at $159 and available Sept. 14, as well as a new version of its e-reader, dubbed Paperwhite, priced at $179 and $119. It also plans to sell the most advanced Kindle Fire HD for $499 by late November.
Speaking at a product launch in Santa Monica, Calif., CEO Jeff Bezos said the Seattle-based retailer will keep its Kindle Touch e-reader but price it at $69.
A new version, the Kindle Fire HD, will have greater Wi-Fi capability than the version introduced a year ago, said Bezos, 48. The model with 16GB of memory and 7-inch screen will cost $179 and go on sale next Friday; the HD tablet with an 8.9-inch-screen will sell for $299 but won't be available until November.
Other models with 4G long-term evolution (LTE) capability for handling streaming media will be priced at $499, Amazon said. Available on Nov. 20, the first 32GB HDs will come with a data plan from AT&T (NYSE: T), the No. 2 wireless carrier. Annual fees for storing data will be $50. They'll offer 150 MB of storage from AT&T as well as 20GB of cloud storage from Amazon, whose Web services support many enterprises, as well as the overall company.
The new Kindles come about 10 months after Amazon first entered the tablet sector that was dominated by the iPad from Apple Inc. (Nasdaq: AAPL), but which now includes rivals such as the Galaxy Tab from Samsung Electronics (Seoul: 005930), the Nexus from Google (Nasdaq: GOOG) and the Surface from Microsoft (Nasdaq: MSFT), as well as others.
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"Amazon is increasingly well positioned in mobile markets," said Jamie Townsend, of Town Hall Research. While not "a game changer," he said, the new models close the gap with Apple and emphasize how competitive the market has become.
Amazon operates all the Kindles on the Android OS from Google but tweaks the software to its own specifications.
Meanwhile, Amazon said the Paperwhite e-readers use new technology that makes reading easier on the screen, especially in sunlight. The displays have 62 percent more pixels and 25 percent higher contrast than previous models, making type appear more crisp. A back light can be adjusted, and the front light has been redesigned for better efficiency. It can run for eight weeks before recharging, the company said.
The Paperwhite weighs 7.5 ounces and measures less than a third of an inch. It uses what Amazon calls Whispersync technology that will recall the last page read when the device is turned off. It adds a voice reader, so that users can listen to books from Audible, another Amazon service.
The new Kindle will weigh only 5.98 ounces, sell for $69 and offer parental controls, the company said.
Bezos and Amazon have also rushed to offer as many books, movies, magazines and TV shows as possible to encourage new sales and revenue from the Amazon Prime service that competes with the iStore, as well as online services like Netflix (Nasdaq: NFLX). As of Aug. 31, the Kindle Store held 1.6 million titles: the Music Store had 22 million titles and the video-on-demand store held 143,000 titles, including 90,000 TV episodes.
Amazon didn't announce suppliers for the new products. Earlier-generation Kindles and Kindle Fires were known to be sourced from Taiwan's Quanta Computer (Taipei: 2382).
Shares of Amazon set a 52-week high of $252.27 in afternoon trading before easing back to close at $251.38, up $5.16. They've gained 45 percent in the past year, during which they fell as low as $166.97 in January when fourth-quarter earnings fell on costs required to ship the first Kindles.
Bezos, who owns nearly 20 percent of the company, said he'd sacrifice short-term profit for long-term gain.
