Amazon Is Poised to Become A Powerhouse in Tablets

During the last year, Amazon ventured into the world of tablets with the Kindle Fire. It clearly represented their first salvo in this market and according to their extrapolation of current tablet data, this aggressively priced tablet now has 22% of the US tablet market.

Today Amazon became an even bigger player in tablets with three new models that are set to shake up the Android tablet market in a big way. And at the moment, they could even have an impact on Apple’s sales, at least until they introduce the highly rumored iPad mini later this year.

Amazon also introduced a new version of their eInk Kindle eReader that is sure to become the standard in eBooks. Amazon says they have sold over 10 million Kindles already and I believe that the newest model will help them bring more converts into the world of dedicated eReaders.

By now you have probably read many blogs and news reports about the actual products Amazon unveiled today in Santa Monica, CA but there are three products I specifically want to highlight. The first is the new Kindle eReader with what they call the Paperwhite backlit screen. This is a very thin model with an innovative eInk screen that basically triples the data resolution because of the way it renders fonts. And, there are a lot of new fonts you can choose from as well as font sizes that can be customized for individual reading styles. The backlit Paperwhite eInk display is clearly the best screen I have ever seen in an eBook reader.

This one will be a huge seller with people who want a dedicated eReading device. Also, Amazon introduced a new thinner Kindle with the existing eInk screen but with higher resolution that is now priced at $69.00.

The second product I want to highlight is the new Kindle Fire HD. They did show a Kindle Fire that looked much like that last version but with an updated processor, more RAM and new software. But the one that will set a new standard for 7” tablets is the HD version of the Kindle Fire.

The Kindle Fire has a 1280 X 800 resolution screen with a true white polarizing filter, and the new TI 4460 processor. It also has a no air-gap laminated display that includes Gorilla glass. Amazon officials say this gives it 25% less glare than the iPad screen. Since HD content is larger it will come in 16-or 32-GB models . A new DSP chip will support MIMO radios, delivering 40% faster WIFI throughput.

But one feature that makes this the best 7″ on the market, bar none. Amazon has included the new Dolby Digital + sound system that adds greater sound dimension. We got a chance to see it demoed in the Dolby offices two weeks ago and were stunned by the increased sound quality it gives a tablet. Dolby is licensing this to other tablet vendors, but the new Fire is the first to hit the market and the Kindle Fire’s sound quality with its new speakers really sets it apart.

Amazon also includes an enterprise-class Microsoft Exchange-compatible email client and calendar, giving it greater versatility within an Android based OS. In fact, one of the big complaints about Android is its poor email client and Exchange support and the Kindle Fire HD with true Exchange support solves this problem.

Although Amazon has done some great new work with the hardware, they are also innovating in software. And one of the more significant software offerings is Kindle Free Time, a parental control that allows parents to set the time that kids can use the Fire. It also and allows parents to pin only kid-friendly content to this area, barring children from the main Fire content. This is extremely important since 7” tablet are finding their way into more educational settings and these controls are a godsend for parents and schools.

We believe that products that cater to how families use these devices together as a community will be well received in the market place.

But the big surprise in today’s announcement was the new Kindle Fire HD with an 8.9” screen. This larger tablet has a 1920×1200 resolution and sports the new TI 4470, an extremely fast low-voltage processor. It is very thin–just 8.8 mm thick–and is 8% lighter than Apple’s current iPad. A 4G LTE version with 32 GB of storage will be priced at $499, well under Apple’s current pricing for a similar 4G configuration of the iPad. It will ship just before Thanksgiving.

There had been rumors floating around that Amazon was working on a larger Kindle Fire but the details took most of us by surprise. Although not as large as Apple’s 9.7 inch iPad, it will give Android users a larger option to view content on and because of the true Exchange support, they might even want to use in for productivity.

From an analytical viewpoint, the new Kindle Fire HD should have Google very concerned since it easily trumps their new Nexus 7 tablet. Plus, it is tied to Amazon’s great ecosystem of content and in fact, any Android vendor with 7″ or 10″ models should be quaking in their boots if they have to go against Amazon and these new Kindle Fire HD offerings.

Amazon says they still have a ways to go to even come up to where Apple is with the iPad, but even Apple has to look at these new offerings from Amazon and be impressed. Of course, this edge for Amazon especially in the smaller screen tablets could be short lived if Apple does introduce their own version of a mini iPad at very aggressive prices. And we don’t know what Apple has up their sleeves for a new iPad that will debut early next year. Yet, the Kindle Fire 7″ will hold its own thanks to increased media available to Amazon Prime customers and at the very least will be a worthy competitor to any smaller iPad Apple might eventually introduce.

There is no question in my mind that Amazon is in the tablet/hardware business for keeps. They clearly understand the value of owning the hardware, software and ecosystem and are clearly on track to emulate Apple’s own strategy of owning and controlling their hardware, OS and services strategy.

These new offerings from Amazon, especially the 8.9inch model, should also compete with Windows tablets thanks to the Exchange support and should undercut Windows 8 tablet prices considerably. And while Windows 8 tablets will be squarely aimed at businesses, if the 8.9” Kindle Fire HD picks up steam with consumers, it could become a candidate for BYOD at some point, which could make it even more competitive with Windows 8 tablets in IT.

This new offering puts Amazon on a whole new map in the tablet world and has now become a force to be reckoned with in this market. And with extremely aggressive price points starting at $199 for the HD 7″ and $299 for the Fire HD 8.9 they are making a compelling case for the Amazon hardware ecosystem.