Amazon tablet goes head-to-head with iPad

NEW YORK -- Amazon is applying real heat on Apple.

Even before CEO Jeff Bezos announced the Kindle Fire tablet at a packed press conference here Wednesday, the market for slate-style computers was on fire. Practically every tech manufacturer under the sun has brought out a tablet. Yet only the Apple iPad has been a piping hot bestseller, dousing the tablet dreams for companies ranging from Research In Motion to Hewlett-Packard.

Amazon could change that. On the surface, and up in the Internet cloud where the tech battle rages on, the outlook for the new Fire tablet, which ships Nov. 15, would appear promising.

For starters, playing with Fire will only cost $199. The entry-level iPad by comparison costs $499. The 14.6-ounce Fire has a fast dual-core processor and a protective 7-inch Gorilla Glass display capable of showing off 16 million colors. There's a handsome carousel interface (built on top of its Android operating system) that shows off movies, TV shows, books, magazines, music and other content Amazon is all too happy to sell.

One reason that some companies have not succeeded in the marketplace is "because they built tablets instead of services," Bezos said in an interview following the press conference. "The hardware tablet is (only) a piece of that service. The end-to-end service is what customers really want, the deep integration with all of Amazon's media."

That Fire only has a modest 8 gigabytes of storage may be beside the point. All the content consumers buy (and in some cases rent) through Amazon will be stored and backed up for free online. The Fire tablet, at least at the outset, is Wi-Fi only, and with 7 or 8 hours of battery life doesn't come close to the four week or so longevity of its Kindle cousins.

Amazon introduced three new products besides Fire, two touchscreen Kindles, coming Nov. 21 for $99 (without 3G connectivity) and $149 (with 3G), respectively, plus an under 6-ounce non-touch Kindle for $79, which ships immediately. Two existing Kindles with physical keyboards remain in the lineup, for $99 and $139, without or with 3G. Not all users want a touch device, Bezos says. Amazon also unveiled a promising new Kindle feature called X-Ray which lets readers explore "the bones of the book" by learning more about fictional characters and historical places.

Bezos doesn't expect Fire to cannibalize lower-priced Kindles. "There's lots of data that people buy Kindles and they also buy LCD display devices. Because you can do different things with them. It's like having a pair of running shoes and a pair of hiking boots. At these price points people can afford to buy both of them."

That may be wishful thinking. But Fire boasts some interesting innovations, including what Amazon claims is an exceptionally speedy "split browser" called Silk that is engineered to take advantage of the backbone of the Internet by moving heavy lifting computations to the cloud. It can also anticipate where a user is going to click next, by exploiting the same technology that helps Amazon on the Web famously determine that "customers who bought this also bought this." Now it's effectively "people who load this Web page, here's what they load next."

"There has to be something in the coffee in Seattle. What an inspired idea this cloud-backed mobile browser is for Amazon," says Al Hilwa, a program director at IDC.

Moreover, on its market leading Kindle electronic readers, Amazon has had a feature known as Whispersync, which lets you keep your progress inside a book in sync as you read across other Kindles, smartphones, computers and on the Web.

With Fire, Amazon adds Whispersync to movies and TV shows, meaning you can start watching a flick on the tablet, and resume on a large screen TV, potentially a killer application. Amazon has been pushing its Prime subscriptioin service that now includes instant streaming of movies.

Bezos says Amazon already has about 10,000 apps in its Android app store and "now that this thing is announced we can start approaching more developers about Kindle Fire. "From a developers point of view it is Android, so you don't have to develop special apps for Kindle Fire."

Forrester Research analyst Sarah Rotman Epps says "the rapid fire adoption of the Fire will give app developers a reason—finally to develop Amazon tablet apps."

At the outset, you can get Android apps from the Amazon App store. It'll be up to Google, Bezos says, to allow users to enter the Android Market from the Fire device.

As much as Amazon competes against Apple, Google, and Microsoft, "In most ways we're like minded with (these companies) and work closely with them. And then there are little corners where we step on each other toes. I think there's a lot of mutual respect."

Epps of Forrester believes: "Amazon will be a strong No. 2, and we expect no other serious tablet competitors until Windows 8 tablets launch."

Does Bezos expect people to buy Fire and iPads?

"We'll have to see. Price point makes such a big difference—the $199 price point makes Kindle Fire an incredibly attractive device. It's a high quality product at a non-premium price. I think we're going to sell millions of Kindle readers and millions of Kindle Fires."