The world’s biggest online retailer hopes the Kindle Fire, priced at just $199 (£127), will build on the success of its range of e-readers. The launch is the first serious threat to Apple’s dominance of the nascent tablet market, with rivals struggling to gain traction against the unprecedented success of the iPad.
Analysts say the aggressive pricing means the device will almost certainly be a loss leader, with Amazon’s profit coming from the sale of digital content such as films, music, apps and ebooks.
The tightly controlled unveiling of the Fire in New York yesterday borrowed heavily from Apple’s famous launch events, with chief executive Jeff Bezos even quoting Steve Jobs’ famous line: “Now, I’ve got one more thing to show you”.
The seven inch device will run a customised version of Google’s Android Eclair operating system and feature a newly-created browser dubbed Amazon Silk. Unlike the Kindle e-reader, the Fire will be wi-fi only and does not come with either a camera or microphone. Users will not have access to the Android Market with its selection of more than 500,000 apps. Instead they will be directed to Amazon’s version of the store with around 10,000 available apps.
Amazon Prime customers in the US will be able to stream unlimited movies and TV shows through the Fire but it is not clear whether or when this will be rolled out in the UK. Pricing for the device in the UK has not yet been confirmed.
The Fire cements ARM Holdings’ dominance in the mobile processor market, with its CPU understood to be designed by the Cambridge-based firm.
Amazon saw its stock close up 2.5 per cent after the announcement, and also unveiled a new, smaller version of its e-reader which will sell for just £89.
Apple is expected to launch its new iPhone 5 on Tuesday.