Amazon Introduces Tablet, Undercuts Competitors in Price

September 28, 2011 Updated: October 1, 2015
Amazon CEO Jeff Bezos introduces the new Kindle Touch in New York, Sept. 28. Bezos introduced a line of four new Kindle products, the Kindle Fire tablet, the Kindle Touch 3G, the Kindle Touch and a new lighter and smaller Kindle. (Emmanuel Dunand/Getty Images)
Amazon CEO Jeff Bezos introduces the new Kindle Touch in New York, Sept. 28. Bezos introduced a line of four new Kindle products, the Kindle Fire tablet, the Kindle Touch 3G, the Kindle Touch and a new lighter and smaller Kindle. (Emmanuel Dunand/Getty Images)

NEW YORK—Online retailer Amazon.com Inc. on Wednesday unveiled its Kindle Fire tablet computer, a Google Android-based device, which the company hopes will compete with the Apple iPad and a slew of Android tablets currently flooding the market.

Analysts have long expected such an offering from Amazon, which in addition to being the Internet’s biggest online retailer, is also the maker of the popular Kindle e-book reader. The new device comes with a 7-inch color screen, and sports a $199 sticker price for the least-expensive model.

The Fire goes on sale Nov. 15, and runs a version of Android that is heavily customized by Amazon. The operating system seems, on the surface, to be completely different than the software on current Android-based tablets in the market.

Undercutting Competition

The Kindle Fire’s introductory price of $199 is by far the cheapest Android-running tablets on sale, and undercuts the price of the lowest-level iPad by more than $300.

In addition to introducing the Fire, Amazon’s CEO Jeffrey Bezos—in a conference not unlike the ones run by Apple’s Steve Jobs when introducing a new product—also slashed the prices of current-generation Kindle e-book readers. The least expensive version of the black and white Kindle will now be available starting at $79.

With that kind of pricing, analysts are expecting the new Kindle Fire to put immense pressure on the current crop of tablets, including the iPad, which has attracted consumers but is more than twice as expensive.

Media Service

While introducing the Fire this week Bezos emphasized its features not so much as a tablet computer, but as a media service device and an evolution of its current Kindle.

"Kindle Fire brings together all of the things we’ve been working on at Amazon for over 15 years into a single, fully integrated service for customers,” said Bezos in a company statement.

Among Kindle Fire’s most visible features is its ability to converge Amazon’s large media content library and app store for Android. In addition to being able to surf the Web and watch videos and movies, the Kindle Fire has built in support for viewing the latest magazines, books, and newspapers.

One technology that enables the Kindle Fire to access this type of content is its integration with Amazon’s cloud servers. The Web browser, which comes with the device, Amazon Silk, utilizes the company’s Elastic Compute Cloud technology to generate the fastest Web-surfing times among its competitors.

The other manufacturers “have just sold a piece of hardware. We don’t think of the Kindle Fire as a tablet. We think of it as a service,” Bezos announced at the press conference in New York.

Shares of Amazon (Nasdaq: AMZN) gained $5.29, or 2.3 percent, in New York on Wednesday.