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Published: Monday, 9/26/2011

Amazon may be set to complete with iPad

The iPad has dominated the tablet market, but if Amazon introduces a new Kindle it may steal away some of Apple's market share. The iPad has dominated the tablet market, but if Amazon introduces a new Kindle it may steal away some of Apple's market share.
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SAN FRANCISCO — One after another, like moths to a flame, technology companies have been seduced into entering the market for tablets. Apple made it look so irresistible, with 29 million eager and sometimes fanatical consumers snapping up an iPad in the device’s first 15 months.

None, however, could beg or borrow any of Apple’s magic. Now comes what might be the best-placed challenger of all: Amazon.com. The retailer is on the verge of introducing its own tablet, analysts predict, a souped-up color version of its Kindle e-reader that will undercut the iPad in price and aim to steal away a couple of million in unit sales by Christmas.

Most tech companies like to keep their cards close to their vest, but Amazon, like Apple, strives to keep the whole deck invisible. It has, though, scheduled a news conference Wednesday in Manhattan, and the speculation on technology blogs and among analysts is that the tablet will be unveiled.

The Amazon tablet, analysts believe, will most likely sell for about $250, half the price of the basic iPad. Its screen will be 7 inches as opposed to the iPad’s 10 inches. Unlike the current Kindle, it will operate by touch. A second tablet, with a bigger screen, is expected next year.

Amazon’s willingness to sell the Kindle e-reader at a loss will doubtless be duplicated with its tablets. By concentrating on direct sales from its own Web site, Amazon does not have to share margins with another store.

‘’The No. 1 thing consumers do on tablets is email,” said Sarah Rotman Epps, a Forrester analyst. “The No. 2 thing is look up stuff on the Web. Then playing games and watching video. Amazon will offer all the tablet that many consumers need.” She estimated initial sales of as many as 5 million devices.

One thing, however, that could hold back the first version of the Amazon tablet is the smaller screen. Steve Jobs, then chief executive of Apple, said last year that it would never make a device that size “because we think the screen is too small to express the software.” Apple also has a lead in design that will be difficult to surmount.

Barclays analyst Anthony DiClemente is another Amazon skeptic who estimated the tablet would sell 2 million units this year. “The great thing about the Kindle is that it was really the first e-reader,” he said. “With the tablet, Amazon is a follower. That’s never as good.”

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