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28
Sep
2011

Amazon on fire: online retailer announces FOUR new devices, including first tablet

POSTED BY Global Administrator
With Apple almost certain to announce its next iPhone model next week, Amazon has stolen its thunder, announcing not one, but four new devices: a tablet (a poorly kept secret) and three new Kindle models. As if teasing the audience, the online retailer spoke about the success of its Kindle device/store combination, with the former boasting electronic ink technology which (according to its proponents) provides a superior reading experience and longer battery life (than LCD, as used in tablets such as the iPad). CEO Jeff Bezos quipped that the company expected scepticism about trying to improve something that is five centuries old: but Amazon’s sales have silenced its critics. With that, while many were no doubt eagerly waiting to hear about its expected tablet announcement, Bezos announced a raft of new Kindle models:

Kindle Touch retailing at $99 (WiFi-only)

Kindle Touch retailing at $149 (but boasting additional 3G connectivity free-of-charge in over 100 countries)

Kindle (Non-touch) retailing at $79

The new Kindle range will start shipping on 21st November and Amazon expects to “sell millions”. At these price points, we would be surprised if they didn’t, particularly with the addition of touchscreen technology (now becoming a must-have in any mobile device). While consumers might have expected to pay more with the move from hard-key to touchscreen, prices will fall: from $139 and $189 for WiFi-only and 3G/WiFi models respectively (without “Special Offers”). As we discussed in our recent report on tablets and eReaders, the price of the Kindle range has fallen substantially since it was first launched in 2007, and more sharply since the launch of Apple’s iPad which heralded the rise of the tablet PC. While the tablet market overlaps into the eReader market – given its facility to consume and render eBooks – Juniper believes there is plenty of room for a dedicated reading device given the sharp price differential and reading-centric display technology. But as we shall discuss in a moment, this may only be in the short-term. Next Amazon emphasised the range of digital content it already offered: 100k movies and TV shows to buy or rent; 17 million MP3s, along with its cloud player; an Appstore providing Android apps. In rhetorical mode, Bezos asked: how could they bring all this together? A tablet, of course: the Amazon Kindle Fire. The device has a 7 inch display, dual-core processor, 8GB storage and boasts Amazon’s new Silk web browser – cloud-based to cope with rendering high resolution pages when bandwidth is at a premium. The device will retail at $199 and will start shipping on the 15th November, with “millions” available. Perhaps the price was the most surprising aspect: $199 for a tablet, even one with a 7 inch display. Bezos emphasised: this is a premium device at a non-premium price (an Amazon philosophy). However, with leading models boasting 10 inch displays, critics will argue this display grouping is too close to smartphone size for comfort. Nevertheless, with Apple and its closest rivals offering devices in the $400 plus bracket, Amazon could be on to a winner. In this sense, Amazon is not really competing with Apple: the iPad is a premium tablet designed for both content consumption and content creation; what Amazon has done is provide solely content consumption for the mass market at a price point that will appeal to a wider audience. While this bodes well for the tablet market, this price is dangerously close to that of the eReader. Why worry though when it has electronic ink technology? Well as our research has found that Apple and others are looking at hybrid displays (switching between electronic ink and LCD) which in the long-term could marginalise eReaders.