Amazon.com (NAS: AMZN) dramatically increased the stakes in its ongoing battle with Apple (NAS: AAPL) for digital media supremacy, officially launching its long-awaited, Android-powered tablet device as well as new Kindle e-reader devices.
The Amazon tablet, dubbed the Kindle Fire and priced at $199 (compared to $499 for Apple's cheapest iPad), effectively gives consumers a single, portable point of access to digital media initiatives including the Kindle e-book catalog, Amazon Appstore for Android, Amazon Instant Video and Amazon MP3, with all content backed up in the cloud. The Kindle Fire integrates with the Amazon Web Services platform and enables consumers to leverage free media offerings included within Amazon Prime, the $79 annual service that also offers unlimited two-day shipping on all products sold and processed by the e-commerce giant, excluding items offered by third-party sellers.
Unlike Apple, which relies on content from its iTunes digital media storefront and App Store to boost sales of hardware like the iPhone and iPad, Amazon is looking to the Kindle Fire to stoke consumer interest in its premium digital media ambitions.
"For 15 years we've been building our media business, and it's become a $15 billion a year business," said Amazon founder and CEO Jeff Bezos during Wednesday's media event, stating that the company now offers more than 100 million feature films and television programs available to buy or rent. In addition, the Amazon MP3 storefront touts more than 17 million songs, some priced as low at 69 cents.
Kindle Fire also heralds the launch of Amazon Silk, a new browser promising to accelerate the mobile web user experience by caching and compressing data and images. Living both on the tablet and Amazon's own EC2 servers, Silk promises to consume less bandwidth than other tablet browsers, translating to faster page and multimedia load times. The Kindle Fire does not feature 3G network access, instead relying exclusively on Wi-Fi connectivity.
Amazon additionally rolled out the Kindle Touch, a new version of its signature e-reader enabling readers to turn pages of e-books or magazines by swiping the screen. The unit also boasts an on-screen keyboard. Pricing: $149 with Amazon Whispernet mobile connectivity or $99 for the Wi-Fi version. Amazon also unveiled a new, lighter version of the original Kindle priced at $79.
Amazon.com's Kindle Store offers more than 950,000 e-books, including the vast majority of current New York Times Bestsellers. Over 800,000 Kindle titles are priced at $9.99 or less. Amazon now sells more Kindle books than hardcover and softcover volumes combined: As of April 1, Amazon consumers purchase 105 Kindle titles for every 100 print books.
As of the second quarter of 2011, the Kindle brand leads the worldwide e-reader market with a 51.7 percent share, followed by Barnes & Noble's Nook at 21.2 percent, according to IDC data issued this month. IDC reports that the e-reader market experienced a seasonal sequential drop of 9 percent to 5.4 million units, although year-over-year growth reached 167 percent.
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