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AMAZON ENTERS RING AGAINST APPLE

September 28, 2011 by · Leave a Comment 

Bezos with Kindle Fire

Amazon today (Wednesday) unveiled its new electronic tablet, the Kindle Fire, which analysts said may give Apple’s iPad its biggest challenge to date. The device, which can stream thousands of movies and TV shows from Amazon’s extensive catalog via a wi-fi connection, is priced at just $199 — far lower than the cheapest iPad, which costs $499. (Its size is also reduced — seven inches versus the iPad’s 10.) It also comes packaged with a 30-day free trial of Amazon’s $79-a-year streaming service and a lower shipping charge for goods purchased on Amazon’s site. Digital purchases — books, movies, TV shows, games, etc. — made by Amazon customers will reside on Amazon’s servers for instant access. A relatively easy-to-use interface also makes it a snap to order products from Amazon’s stores. “This is unbelievable value,” Amazon CEO Jeff Bezos said at the launch event for the Kindle Fire in New York. I really want to stress this point: These are premium products at nonpremium prices.” Analysts appeared impressed. Ken Sena, who covers Amazon for Evercore Partners, told the Wall Street Journal: “Amazon has an advantage that other tablet manufacturers don’t in that millions of people already visit its site on a regular basis” and will see promos for the device when they do. Some questioned whether Amazon could make a significant profit on the device given its low price — well below what most analysts had expected. “Let’s put it this way,” Bezos said today, “we are and always have been very comfortable at operating at extremely low margins.”