3 traits that make the Kindle Fire competitive

Low price, Amazon Silk browser and promising ecosystem of movies, apps and books make the Fire stand out in a crowd

The Kindle Fire tablet, announced by Amazon.com on Wednesday, has three traits that make it competitive in a crowded tablet market: a low $199 price, a fast browser called Amazon Silk, and access to an abundant ecosystem of movies, music, apps, and books.

On price

The Fire, with its 7-in. color touch screen at 1024 x 600 resolution, is lightweight at 14.6 ounces and functions over Wi-Fi only. Those features put the Fire in close contention with Barnes & Noble's Nook Color, a 7-in. e-reader and browser-enabled device that sells for $249.

Most will try to compare the Fire with the Apple iPad 2, the 9.7-in. tablet on Wi-Fi with a price tag that starts at $499. The iPad 2 is already the runaway market leader, with more than a 70% market share, according to Gartner and others.

Amazon CEO Jeff Bezos didn't mention those two competitors in his introduction of the Fire and three new Kindle e-readers priced below $149 on Wednesday, except to say that Amazon is offering "premium products at non-premium prices." Fire will ship on Nov. 15, although orders are now being taken online.

Jack Gold, an analyst at J. Gold Associates, called the Fire's $199 price "groundbreaking" even if it doesn't give Amazon much room for a profit margin. "They don't have to make much profit on the device if they can sell books, music, videos and more," he added.

Bob O'Donnell, an analyst at IDC, said the $199 price "is low enough to be an impulse buy for some people. Even people with iPads may decide to buy the Fire." Amazon won't have to worry about incurring added costs for retail sales since it will sell direct, and the company might not lose profits on the $199 price, he said.

Still, direct sales mean users won't be able to handle and test the Kindle Fire in a store, O'Donnell noted. That factor didn't drag down earlier Kindle sales, but it could matter for the Kindle Fire, he said.

Aside from its impact on competing e-readers, O'Donnell said the Android-based Fire "will make life incredibly difficult for other Android-based tablet vendors" such as Samsung with its Galaxy family of tablets.

Allen Weiner, an analyst at Gartner, said the "Fire competes directly with the Nook Color and not really the iPad." But at $50 less than the Nook Color, the Kindle Fire allows for streaming media in ways that the Nook Color cannot, he added.

The $200 Android tablet will join a crowded market dominated by Apple's iPad.

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