This is an archived article that was published on sltrib.com in 2011, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Online retailer Amazon announced its highly anticipated color tablet Wednesday as well as the next generation of lower-priced Kindle e-readers, the latest attack against Apple's dominance in the tablet market.
Amazon's chief executive, Jeff Bezos, introduced the Kindle Fire, a touchscreen color tablet that does more than display books, but also plays movies, music and runs apps from Amazon's Android Market. The device will sell for $199 (compared to $499 for Apple's cheapest iPad 2) and will begin shipping Nov. 15. Preorders for the device start Wednesday.
"From Kindle, Fire is born," Bezos said during a press conference in New York City.
The new device sports a 7-inch color touchscreen and works with Amazon's cloud service to store media like music and movies. It also uses Amazon's free wireless service called WhisperSync to download content away from a Wi-Fi hotspot.
The Fire also will feature a new, faster way to browse the Internet with browser technology called Amazon Silk. The feature leverages the power of Amazon's cloud service to pre-render Web pages before they are sent to the Kindle Fire.
Because the tablet will use the cloud to store media, a user will be able to watch a movie on the Kindle Fire and then resume watching it on a television exactly where it was left off.
Amazon currently has 14 million MP3 songs for sale on its site as well as 11,000 streaming movies and television shows through its new video streaming service. All will be accessible by the Kindle Fire. Bloomberg reported that purchase of the Fire will also come with one free month of Amazon Prime, the retailer's program that offers free access to the streaming video service as well as free two-day shipping on most Amazon products.
Bezos also introduced a new black-and-white touchscreen e-reader called the Kindle Touch. The new device's 6-inch screen still uses e-ink technology for reading books, but does away with a keyboard and includes a new feature called "X-Ray," which is a word function that not only gives the reader a definition but also more information about its context in the overall story.
The Kindle Touch, which appears to directly compete with the latest touchscreen Nook reader from Barnes & Noble (which sells for $139), will go on sale Nov. 21 for $99 (Wi-Fi-only model) and $149 for one that includes built-in 3G connectivity.
Finally, Amazon introduced its fourth generation Kindle e-reader that is lighter, smaller and will sell for $79. The new model, which will be ad-supported with local deals displaying on the device's screensaver, went on sale Wednesday.
Amazon has never officially released sales figures for the Kindle, but industry analyst Forrester Research estimated that 4 million Kindles had been sold by the middle of 2010. Meanwhile, MediaPost estimates that Amazon has 59 percent of the e-reader market, compared to 11 percent for the Nook and 5 percent for the Sony e-reader.
According to Consumer Electronics Association spokesman Jim Barry, sales of e-book readers doubled in the past year, while computer tablets like the iPad have skyrocketed 150 percent, making them the biggest segments of the electronics market this year, along with smartphones.
While the new Kindle will add to Amazon's sales, estimated by analysts to rise 32 percent to $64.6 billion in 2012, the company may disappoint if the tablet doesn't bring in revenue quickly, Steve Weinstein, an analyst at Pacific Crest Securities in Portland, Ore., said in a note this week.
Consumer reaction to the device will play a "critical" role in the company's growth, he said. Analysts on average predict Amazon's gross margin, a measure of profitability, will fall to 22.17 percent in 2012 from 22.35 percent last year, according to a Bloomberg survey. Gross margin is the percentage of sales left after subtracting production costs.
Several other computer tablets have debuted this year to try and compete with Apple's popular iPad. The HP TouchPad debuted to low sales until its price was lowered to $99 and quickly sold out (with the new price, HP ended up taking a loss on each unit sold). Hewlett-Packard said it would start a second production run of the TouchPad after the successful price drop.
RIM's Blackberry Playbook also was introduced this year along with Samsung's Galaxy Tab 10.1 computer tablet. All have not nearly reached the sales figures of the iPad 2 this year.
The iPad accounted for 68 percent of all tablets shipped worldwide in the second quarter, according to Framingham, Massachusetts-based research firm IDC. Other Android-based tablets, including models from Motorola Mobility Holdings Inc. and Samsung Electronics Co., accounted for 27 percent.
Twitter: @ohmytech
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Bloomberg New and The Associated Press contributed to this story.