Can Amazon's Fire Tap Into iPad's Success?

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Amazon has unveiled its new Fire, a tablet device that does much more than the company's successful Kindle e-readers. Will Amazon's entry into the tablet market challenge Apple's iPad dominance?


Amazon upped its stakes in the technology world, finally confirming it will sell a tablet computer. It's called the Kindle Fire. It's has a color screen and can play movies, TV shows and music. The Fire enters a market that has been dominated by Apple which, of course, has sold about 29 million iPads. But, unlike other challengers to Apple, Amazon has lots of content to sell. NPR's Laura Sydell reports.

LAURA SYDELL: Before Amazon CEO Jeff Besos announced the Kindle Fire, he showed off Amazon's growing assortment of entertainment content - its Prime service offers all kinds of streaming TV and movies for $79 a year.

JEFF BESOS: And we've had great participation from networks and studios, many of them, and I'm just going to - and we're just getting started


RON HOWARD: It's "Arrested Development."

SYDELL: The latest edition was Fox with shows like "Arrested Development" and "Buffy the Vampire Slayer."

BESOS: And we asked ourselves, is there some way that we can bring all of these things together into a remarkable product offering that customers would love?

SYDELL: And Besos said the answer was that they could. He introduced the Kindle Fire. It's smaller than an iPad - seven inches versus about 10, so you can hold it in one hand. And it connects to the Internet with Wifi - no 3G version.


SYDELL: Besos streamed the film 'X-Men" and showed off the full color screen.

BESOS: Sixteen million colors.


BESOS: One-hundred-and sixty-nine pixels per inch. Gorilla glass.

SYDELL: It all sounds pretty grand. But?

MICHAEL GARTENBERG: There's no 3G, there's no Blue Tooth, there's no camera, there's no microphone.

SYDELL: That's Michael Gartenberg from Gartner, a research firm. He says the Kindle Fire is no iPad. Gartenberg says a lot of people will take an iPad instead of a laptop and maybe hook up a keyboard to it so they can get some work done. The Kindle Fire is too small for that, but it's great for watching movies, reading and so forth.

GARTENBERG: So for a consumer that's only looking for content consumption, not creation, this is going to be a device of choice or for the consumer who wanted to buy an iPad but couldn't justify a $500 purchase.

SYDELL: Which leads us to the price. Amazon is offering the Kindle Fire for $199. And that is why Rob Enderle, an analyst with the Enderle Group, thinks a lot of people are going to buy the Fire rather than splurge on an iPad.

ROB ENDERLE: The Fire and iPad overlap significantly, so it is undoubtedly going to be a one or the other decision this year.

SYDELL: Enderle says his studies show that consumers are 10 times more likely to buy something that sells for $200 than they are to pay more than $500 for something. Add to that Amazon's other new options. It unveiled two touch screen Kindles, just for reading, and now it sells its low-end Kindle for $79. So, if you're out doing your Christmas shopping you can buy dad a Kindle Fire and Junior a Kindle eReader for less than $300 total.

Of course, Enderle believes that Apple is watching closely.

ENDERLE: You're running against Apple, and Apple is no normal vendor, and they're clearly going to respond to this threat.

SYDELL: So, we could be about to enter a tablet war. And that, say most analysts, might be hard on some CEO's. However, it might bring down prices even more, or at least get us tablets with even more cool features. Laura Sydell, NPR News.

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