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Thoughts on Amazon's New Tablet, the Kindle Fire

By Sree Sreenivasan | September 29, 2011 6:01pm

For a while now, it's been accepted wisdom that Apple's iPad was going to dominate the world of tablets for years to come. After all, its sales numbers, in a year-and-a-half, have dwarfed those of all competitors. By some estimates, iPad has 75-80 percent of the US tablet market.

While iPad is going to continue to sell well, Amazon has stepped into the fray and, in the process, changed at least part of the game.

On Wednesday, CEO Jeff Bezos unveiled the Amazon Kindle Fire, its entry into the tablet wars, along with updates of Kindle e-readers. 

THE KINDLE FIRE ($199): This Android-powered tablet (similar in feel dimensions to creations by Samsung and others) will be a 7-inch tablet that's optimized to promote Amazon's book, video and music offerings. The most eye-catching part of the announcement is the price. At $199, it's much lower than analysts had been predicting and compares very favorably to the $499 that the cheapest iPad costs these days. In the midst of a recession, that price is going to be attractive to a lot of folks who might have been hesitant to buy an iPad, but wanted to be part of the tablet universe. The iPad's screen, which is substantially larger (at almost 10 inches), is something that millions of people have shown they like, especially for videos and magazine-type layouts. The smaller internal memory of the Fire may also be an issue for power users. But for the average consumers, who are going to get used to storing more content in a cloud, the storage limits may not be a problem.

THREE KINDS OF KINDLES ($79, $99 and $149): The tablet announcement is getting a lot of the attention, but the e-ink Kindle (i.e., the simple e-readers and not fully-functional mini-computers) is going to continue to be part of the Amazon stable. There's the regular Kindle that has just had its price drop to $79; there's a version with a touch screen for $99; and one that has 3G wireless access for $149. The difference between the $149 model and the other two is that the others use WiFi to get new content, while the more expensive version has, basically, its own cell service to go online any time and anywhere. 

I believe that Amazon is on the right track this multi-price strategy. The low prices of the Kindle and the Kindle Fire mean that hundreds of thousands (if not more) of consumers who have sat on the e-reader and tablet sidelines could snap these up. And Amazon can eat into iPad sales this holiday season itself (provided it can get the logistics right; when the Kindle first went on sale in 2007, it promptly sold out for months).  

Eventually, Amazon - and news publishers - might want to give away the Kindle as a way to incentivize the purchasing of content of all kinds. The $79 price certainly shows that we are heading in that direction. After all, this isn't really about the hardware, but about getting consumers to do, well, more consuming. My wife owns a Kindle, but I don't. Instead, I use the free Kindle app on my iPad and Samsung Tab to read books I download off my Amazon account. That ubiquity has meant that I can buy Amazon's e-books without having to buy my own Kindle.

Over at Poynter, Jeff Sonderman has outlined 5 key questions journalists and publishers should ask about the Fire (including, how will Amazon handle customer data and revenue sharing?). 

What do you think of the Amazon annoucements? Post your comments below using your Facebook account or on Twitter @sree

Every week, DNAinfo contributing editor Sree Sreenivasan shares his observations about the changing media landscape.