Amazon Rockets Upmarket with Kindle Fire HD Devices

Amazon has shown the world it is possible to compete against the iPad if you offer a smaller device and charge a lot less for it. When the Kindle Fire was released it cost $199 while the equivalent WiFi-only iPad cost $499.

Since that time, Apple has released the New iPad with a Retina Display at $499 and the iPad 2 saw its price drop to $299.

Now, Amazon has taken a page out of the Apple book and dropped the price of the Kindle Fire to an impossibly low $159. Hopefully, for Amazon’s sake, Cupertino didn’t patent price drops. smiley-tongue-out But seriously, the good news for customers is this new device has more memory, a bigger battery, a new front-facing camera and still undercuts the Google Nexus 7 by $40. If I were a betting man I’d wager that at this rate, the price of the Kindle Fire will cost less than a venti latte at Starbucks by 2016.

Of course I digress – ahead of the Apple event next week; it seems everyone is making news. Yesterday it was Google/Motorola Mobility and Nokia and now it’s Amazon who also announced a new Paperwhite e-ink device with massive battery life as well as two Kindle Fire HD models which have already wowed the critics.


According to TMCnet:

The 8.9-inch Kindle Fire HD, in particular, stole the show with its 1920 x 1200 resolution, a TI OMAP 4470 processor, dual speakers, a front-facing HD camera, built-in MIMO Wi-Fi and an HDMI output. The Kindle Fire HD will go for $299 for the 16GB version when its ships on November 20th, while the Kindle Fire HD with 4G LTE will land on the same day for $499. This version will feature 250MB of 4G data usage per month from AT&T.

The other Kindle Fire HD model sports a seven-inch display like the basic model, but otherwise sports very similar specs, including 1200p resolution, to the 8.9-inch version. The seven-inch Kindle Fire HD will cost $199 at launch.

Perhaps most unique in this offering is the 4G Kindle Fire HD comes with the most affordable 4G tablet data package. Customers will have access to a 12-month data plan with 250MB per month, 20GB of Amazon Cloud storage, and a $10 credit in the Amazon Appstore for a one-time cost of $49.99. In other words, when you combine the cost of the device and the data plan, customers who purchase the Kindle Fire HD 4G LTE will pay over $400 less than latest generation iPad owners in the first year of ownership. Customers can also choose to upgrade to 3 GB or 5 GB data plans from AT&T from the device.

One of the other features of these new tablets which is very exciting is the addition of Dolby Digital Plus which according to Dolby provides:

  • Crisp, clear dialogue: Detect the presence of dialogue and works to improve its intelligibility so that the viewer hears the whole story.
  • A more realistic, immersive surround sound experience: Enable any movies, television or music content played on the Kindle Fire HD’s stereo speakers or headphones to be heard with more depth, creating a powerful, virtual surround sound experience.
  • Volume consistency: Include a unique volume-leveling technology that maintains one consistent volume level when the user switches back and forth between different forms of content, such as movies or web content, as well as between different media players.
  • Custom tuning by Dolby engineers: Include features that are specifically designed to optimize audio played through the Kindle Fire HD. These features help to produce natural, balanced sound with more bass and treble. They also eliminate unnecessary noise and minimize distortion.

Volume consistency is a great addition to mobile devices because users have to rely on different apps to gain access to various music services. I recently noted that Songza for example sometimes plays music at different volume levels than other content I listen to. It is worth pointing out the music player on an iPhone generally sounds louder than all the streaming radio services I have checked out.

To show how serious Amazon is about going upmarket in the tablet space, CEO Jeff Bezos had this to say, “We are not building the best tablet at a certain price.” For those of you who may not follow the tech market for a living, this single statement will translate into about 4,000 hours of work for Apple’s attorneys. whistling It’s the verbal equivalent of dropping an injured wildebeest in the middle of a starving lion pride.

At this point the most serious competitors to Apple in the tablet space are Samsung and Amazon with Google doing anything it can including becoming evil to become a serious player. And these new Kindle Fire HD tablets are head-to-head competitors to Apple and it will be fascinating to see how the public reacts.

Regardless – the pressure is on and the most interesting question may not be about the points of marketshare Apple can potentially lose due to so many choices but instead, how long Apple can make huge margins on iPads when the low-end of the market for a very competent device now stands at $159 and Kindle Fire HD customers are able to get such an amazing deal on 4G access.

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