Amazon.com CEO Jeff Bezos unveils the new Kindle Fire tablet at a September 28, 2011 press event in New York City.
NEW YORK -- Amazon.com Inc. Chief Executive Officer Jeff Bezos yesterday showed off the Kindle Fire, a $199 tablet computer, challenging Apple Inc.'s iPad by extending its Kindle brand into the world of full-color, multipurpose devices.
He also took the opportunity at a press event to introduce a line of Kindle e-readers with black-and-white screens and lower prices, further pressuring competitors that are trying to break Amazon's dominance in electronic book sales.
The Kindle Fire will go on sale Nov. 15. It's about half the size of the iPad, making it a close match with Barnes & Noble's Nook Color tablet. But while Barnes & Noble sees the Nook Color as a jazzed-up e-reader, Amazon has broader goals for the Fire as a platform for games, movies, music, and other applications.
Even before its release, the Fire was heralded as a worthy competitor to Apple's iPad. Amazon is nearly unique in its ability to sell content such as e-books, movies, and music suited for a tablet -- just as Apple Inc. does.
Still, competing with Apple won't be easy. Many have tried to copy the iPad's success, but it remains the overwhelming front-runner in tablet computers. Apple sold 28.7 million from April, 2010, to June, 2011. Analysts at research firm Gartner Inc. expect the iPad to account for three out of four tablet sales this year.
"Some of the companies that have made tablets and put them on the market ... the reason they haven't been successful is because they made tablets. They didn't make services," Mr. Bezos said. "So what we've done is really integrate seamlessly all of our media offerings -- video, movies, TV, apps, games, magazines, games, and so on."
Analysts had expected the Fire to go on sale for about $250. Forrester Research analyst Sarah Rotman Epps called the $199 price "jaw-droppingly low," and said it would introduce tough competition not just for Apple, but for contending tablet makers such as Samsung Electronics Co., Motorola Mobility Holdings Inc., and HTC Corp.
Analysts had speculated Amazon would subsidize the tablet, counting on making back some money through book and movie sales.
But Mr. Bezos said the firm is content with a slim profit margin.
Ms. Epps believes Amazon will sell 3 million to 5 million Fires before the year-end, but the late shipping date will probably skew the figure to the lower end of the range.
Amazon's cheapest new Kindle will cost $79, and dispenses with the keyboard the Kindles have carried since the first model launched in 2007.
For $99, Amazon is also bringing out the first black-and-white Kindle with a touch screen; it's reminiscent of Barnes & Noble's latest Nook.
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