Amazon's Tablet: Winners and Losers


Rumors often aren't worth the pixels they're written on. But when a well-respected publication posts a hands-on preview of a long-rumored gadget, you sit up and take notice. It doesn't hurt if that outlet also has a track record of breaking news with some accuracy.

TechCrunch reported last week that the hotly anticipated tablet computer from (NAS: AMZN) is indeed very real and probably heading out to manufacturing very soon.

Smaller than the Apple (NAS: AAPL) iPad 2 and less powerful than the Motorola Mobility (NYS: MMI) Xoom or Samsung Galaxy Tab, the Amazon Kindle tablet still packs a mean punch. You see, it's priced to move at $250 per unit. At that price, Amazon doesn't need a computing powerhouse.

In the eternal quest for balance between price and performance, Amazon is clearly leaning toward the low-cost side. The Xoom sports a dual-core NVIDIA (NAS: NVDA) Tegra 2 monster of a processor; Amazon appears to be going for an unnamed single-core option. iPads and their would-be killers like to have a full 10-finger touchscreen controller from Atmel (NAS: ATML) or Cypress Semiconductor (NAS: CY) , but Amazon keeps it simple and cheap with last-generation two-finger sensors.

The list of compromises goes on and on. But in the end, this thing should cost about half of what Apple charges for an iPad, and the TechCrunch writer was suitably impressed by its functionality, design, and performance. The iPad finally has a challenger that matters.

That said, it's no iPad killer. In fact, Amazon isn't pointing this cannon at Cupertino or even at Mountain View. The real target lies some 15 minutes down the road, in Los Gatos.

That's right -- CEO Jeff Bezos just designed a powerful weapon for his media war against digital-video specialistNetflix (NAS: NFLX) .

The hands-on walkthrough says that the tablet will ship with a free trial to Amazon Prime, the free shipping service that comes with a side of online movie rentals. Being the only American competitor in the same subscription space as Netflix, Amazon has always played catch-up. Like I said, this thing is priced to move and could become a big hit. Designed to tap into Amazon's ecosystem of media services, the Kindle tab could be the missing hardware piece of Amazon's digital-video puzzle.

This fight just got interesting.

Regardless of who wins the tablet wars or even the video-store battle, you can rest assured that fatter network pipes will be essential in the next era of home and mobile entertainment. Grab a free special report on that market, including an in-depth profile of perhaps the best investment you'll see all year. It's essential information for any serious tech investor and totally free -- why not grab your copy right now?

At the time thisarticle was published Fool contributorAnders Bylundowns shares of Netflix but holdsno other position in any of the companies discussed here. The Motley Fool owns shares of Apple.Motley Fool newsletter serviceshave recommended buying shares of Apple, NVIDIA, Cypress Semiconductor, Netflix, and, writing puts in NVIDIA, creating a bull call spread position in Apple, and buying puts in Netflix. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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