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Amazon's Kindle Fire: iPad Finally Gets Android Competition

CEO Jeff Bezos takes a jab at Apple

Amazon CEO Jeff Bezos introduces the new Kindle Fire tablet in New York, on September 28, 2011 | Photo: EMMANUEL DUNAND/AFP/Getty Images

Finally! Apple’s iPad has some real competition.  

After days of leaked reports and rumors, Amazon CEO Jeff Bezos introduced the Kindle Fire tablet at a highly anticipated New York press conference Wednesday morning.

The $199 device isn’t as functional as an iPad but, at half the price of the cheapest iPad, the sleek multi-media tablet is ready to take Apple head on.

The Kindle Fire may not have the storage, camera or 3G capabilities of the iPad, but given how smoothly it integrates all different kinds of digital content (video, print, music and apps) for those who just want an easy-to-use tablet for consuming media, it's surely Apple's biggest challenger yet.

In explaining his latest invention to the mesmerized tech media, Bezos didn’t hold back from taking a little jab at his Silicon Valley rival.

Bezos explained that all of the content on Kindle Fire is backed up in the cloud, so that users can delete content from the device, and later retrieve it, whenever they want.

“That model where you need to back up your own content is a broken model. We want to take responsibility for that,” he said.

Standing in front of an image of an Apple USB cord, Bezos added (to the amusement of the crowd), “We feel the same way about syncing.”

“Syncing, just like with Kindle books, should run invisibly in the background, and wirelessly. And it should actually work,” he said.

With a 7-inch screen and weighing less than a pound, the Kindle Fire looks very much like the traditional Kindle. But in addition to storing millions of books, it gives users access to 100,000 TV shows and movies, 17 million songs, and full-color magazines.

A few of the content partners include CBS, Fox, NBC-Universal, Conde Nast, and Hearst. To demo the video player, Bezos played a scene from “X-Men” and used an Adele song to show how easily a Fire owner could adjust audio settings without leaving her book.

At the presentation, Bezos took his time getting to the Kindle Fire announcement, starting with a review of Amazon’s success that highlighted the Kindle’s hockey stick growth. When the Kindle was first launched four years ago, Amazon offered just 90,000 books. Now, he said, its e-bookstore offers more than 1 million titles (not including free books).

He also unveiled a suite of new e-ink digital readers at discount prices—a new Kindle for $79 and two new touchscreen Kindles, the Kindle Touch and Kindle Touch 3G, for $99 and $149 respectively.

“I hope you see what we’re doing here,” he said. “We’re offering premium products at non-premium prices.”

Throughout the presentation, Bezos exclaimed that the company would sell “many millions” of its new devices, and early reactions indicate that that his rosy prediction may well bear out—as long as supply doesn't run out.

Piper Jaffray analyst Gene Munster said that, after seeing details for the Kindle Fire, they feel “incrementally more comfortable” in their expectations that Amazon would sell 2.5 million Kindles for the fourth quarter. But he added that the company could experience supply restraints.

“When Amazon launched the original Kindle, the device was out of stock for five months. If supply were not an issue, we believe Amazon could sell closer to 4 million Kindle Fires in the holiday quarter,” he said in a research note.

Munster also said that while the Kindle Fire is not a true competitor to the iPad, it is more competitive than expected.

"Kindle Fire has 8GB of storage compared to the iPad at 16GB, 32GB, or 64GB ... the iPad has two cameras and a 3G option, but the Kindle Fire does not. That said, the Kindle Fire is more competitive that we anticipated due to its new movie, music, and web browsing capabilities," he said.

Still, Forrester Research analyst Sarah Rotman Epps said that Amazon is competing with Apple on “price, content, and commerce,” and will finally push developers to create Android tablet applications.

“Apple’s place as market leader is secure, but Amazon will be a strong number two, and we expect no other serious tablet competitors until Windows 8 tablets launch,” she said in a blog post.

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