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Amazon Shakes Up Tablet Market

Amazon Shakes Up Tablet Market
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Kindle Fire ignites tablet price war.

James Alan Miller

James Alan Miller is Managing Editor of Tom's IT Pro. He is a veteran technology journalist with over seventeen years of experience creating and developing magazine and online content. Founding editor of numerous business and enterprise computing sites at the internet.com network, James headed up the After Hours section at PC Magazine, as well as hardware and software sections of various Windows publications.

Yesterday, Amazon CEO Jeff Bezos unveiled the Kindle Fire, the company's first e-reader to double as a full-fledged tablet computer.  

Three new e-Ink Kindles joined the Kindle Fire during the announcement: the $149 Kindle Touch 3G, $99 Kindle Touch WiFi and the $79 Kindle.

Sporting  a dual-core processor, Wi-Fi, 8GB of storage, 8 hours of battery life and a 7-inch LCD touch screen, the Kindle Fire’s low $199 price tag is already igniting a tablet price war—RIM slashed the price of the BlackBerry PlayBook, for instance—although it won’t ship until November. So IT pros can thank Amazon when the number of people bringing tablets into the office rises dramatically in the coming months. 

Amazon’s Kindle Fire is, essentially, an Android tablet that's been optimized to access Amazon services, such as eBooks, music, movies, applications and more. The proprietary Amazon Silk browser leverages what Bezos called "split browser" technology,  heavily integrating with Amazon's Elastic Computer Cloud and accelerating performance. And, like with Barnes & Noble’s very successful  Nook Color e-reader ($250), the Kindle Fire's user interface is so customized, you wouldn't recognize it as an Android product at first glance.

The Kindle Fire itself won’t be attractive to business, as it is so consumer orientated.  But it should go a long way towards legitimizing tablets as viable computer platform beyond the iPad. Expect millions of people, many of them already Amazon customers, to finally take the tablet plunge thanks to Amazon.

The Kindle FireThe Kindle Fire

True, the iPad is far more capable than the Kindle Fire. (Rumor has it a more feature rich 10-inch version of the Kindle Fire is in the works, but isn’t due until next year.)  But overturning the iPad isn’t Amazon's goal anyway; iPad owners download and read eBooks from Amazon eBook store all the time.  

With the Kindle Fire, Amazon is targeting those who can't afford an iPad or don't want and need all that the iPad offers. At an attractive price that's less than half that of the cheapest iPad configuration, the Kindle Fire, as we alluded to in the beginning of this article, is already pressuring other tablet vendors to lower their prices. As HP demonstrated with the TouchPad, one of the reasons all vendors but Apple's been having such difficulty moving their wares is that current pricing, upwards of $500 or more, is way too high.

HP zipped through its remaining TouchPad inventory when the price plunged to $99 (16GB) and $149 (32GB) from $399 and $499, respectively, just after killing the tablet off after only a couple months on the market. It sold so many TouchPads so quickly, HP even decided to manufacture another batch this fall. While we doubt new HP CEO Meg Whitman will change course, and permanently reinstate the TouchPad and its  webOS platform, it could happen. 

As even the iPad has shown, tablets are not yet capable of  replacing desktops or laptops, except in, perhaps, some very specific vertical business niches (i.e. doctors using them to track patients when making their rounds in in the hospital).  This is doubly true for a more limited tablet such as the Kindle Fire.

Tablets overall, however, are slowly becoming yet another must-have device, such as the mobile phone or MP3 player, for people to have at their disposal. For millions, the Kindle Fire should fill that role nicely.

Like the iPad with iTunes and the App Store, the Kindle Fire will also show that the most successful tablets are those heavily integrated with online services that make it easy for users to consume and manage content. We expect that Google and its new mobile hardware division, Motorola, already knows this, and other tablet vendors—such as Samsung, Toshiba and, especially, RIM—must be scratching their heads to figure out how they can deliver the same type of experience.

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