Amazon May Rekindle the Fire Sept. 6
Aug 24, 2012 10:57 AM PT
Amazon has a big announcement to make on Sept. 6, according to invitations to an upcoming event in Santa Monica the company recently sent.
Amazon's announcement will come about a year after the online retailer launched the Kindle Fire. The timing has given rise to speculation that this time Amazon plans to announced an upgrade to the tablet -- and possibly more products in the Kindle line.
Rumors about the new Kindle include a much improved, higher-resolution display, a smaller and thinner design, and a built-in camera. The upgraded display would work well with Amazon's continued emphasis on its digital entertainment options as the company works to bolster its streaming content offerings.
The new features might also mean an increase in price. The current Kindle Fire sells for US$199. Amazon might leave that original model on the market for $149 and offer the upgraded versions with 8 GB and 16 GB options for $199 and $249. Google offered similar options with its recently launched 7-inch tablet, the Nexus 7.
The event will also come about a week before Apple is expected to announce its newest iPhone and possibly a 7-inch iPad. With its smaller size and possibly more affordable price point, the presumed iPad mini would directly rival the Kindle Fire and Nexus 7.
Amazon did not respond to our request for comment.
Riding on Ecosystem
When Amazon launched its Kindle Fire about a year ago, it was unknown how the online retailer's hardware would fare against competitors with more experience in the PC business. But the tablet did well during the holiday season and hung on to some of its marketshare throughout the rest of the year. To keep that momentum alive in a crowded market, Amazon can't skimp on its next upgrade, said Patrick Moorhead, president and principal analyst at Moor Insights & Strategy.
"The Fire will need to updated significantly if it has a chance versus the [iPad] mini," Moorhead told TechNewsWorld.
That means the hardware as well as the price point needs to stay competitive, said Tom Mainelli, research director and tablet analyst at IDC.
"It's very likely that this announcement is going to be an updated Kindle Fire, and maybe some additions to the traditional Kindle line," he told the E-Commerce Times. "Amazon is going to need hardware that's as good or better than Google's Nexus 7 so that it can gain some traction, and it also needs to continue to be priced aggressively. If it comes out with an 8.9 inch tablet at $249 or a 10-inch around $300, that could make customers give the products a close look."
Amazon can get away with more aggressive pricing because of its massive ecosystem. The online retailer can use its core business of digital content and entertainment options to rely on customers buying back into the product by purchasing e-books, apps and other content for their Kindle Fires. Currently, only Apple has comparable depth, said Mainelli.
"Amazon's strength is that they have arguably the best or at least the second best ecosystem out there," he said. "It's comparable to Apple. The standard Android guys are kind of floundered because Google's ecosystem isn't quite up to speed yet. The Nexus 7 is pretty good in the U.S., but it's not nearly there for other regions yet."
Mini vs. World
As competitive as Amazon's ecosystem is, though, it's unclear whether Amazon's Kindle Fire can stand up against an Apple option when both hit the already packed tablet market.
If customers shopping for a first tablet are shopping during the holiday season, the options have the potential to be overwhelming, said Mainelli. New consumers would have to choose between standard Android tablets, a Barnes & Noble option, Amazon's Kindle Fire, new hardware that runs the revamped Windows 8 operating system, and possibly a 7-inch Apple iPad.
In that young and crowded marketplace, Apple might come out on top, said Mainelli.
"A confused consumer will probably default to the market leader," he said. "That's obviously Apple. There is a lot of potential out there for competitors, but Apple is still in the driver's seat. Amazon has a chance but it really has to make a big splash Sept. 6 and hit the ground running."