This morning Amazon introduced a revamped line of E-Ink Kindles and lowered prices: Kindle Touch 3G for $149, Kindle Touch for $99 and a new, cheaper Kindle for $79. But the Kindle Fire, it's 7-inch color Android tablet was the star of the show.
It will retail for $199, which is probably break-even or a loss for Amazon. The company hopes to sell content and services to recover its costs and profit from device sales. And sell it will.
Most people will likely see it as an upgraded Kindle with benefits (apps, mobile web). Amazon's pricing strategy is not unlike giving away the printer to generate ink sales.
It will immediately become the most successful Android tablet. Yet it's an Android tablet without the Android brand or Google. Apps will come through Android's app store -- it's unclear whether the Android market will be available -- and content on the device will be dominated by Amazon's books, magazines and movies.
Here's how Amazon's pitching it to consumers:
The device was apparently built by the same company that built the RIM Playbook, which didn't sell. But the Amazon brand and software differences will propel the new Fire.
Bloggers love hyperbole and "X-Killer" headlines. But this is no iPad Killer; it's a better Kindle and a cheaper Android tablet. However its low price and "good enough" value proposition may impact some people who were thinking about buying an iPad. Where all the Android tablets to date seemed like iPad imitators the strength of the Amazon brand and the Kindle legacy will avoid that fate for Kindle Fire.
Kindle Fire is a 7-inch tablet; however it impacts the ability of other tablet makers to sell their devices, regardless of size, for more than $300 at the very outside (maybe $250). In other words, post-Fire $499 Android tablets are DOA.