At Amazon's Thursday press conference, the company unveiled the new Kindle Fire HD, Paperwhite book reader, and an updated version of the basic Kindle, increasing their market shares by 1 percent in Friday's premarket trading. Word is that the Amazon Kindle Fire line could sell up to 12 million units this holiday season, according to Citi Analyst Mark Mahaney. A prediction like that is destined to drum up excitement among investors. With such a large installed base, Amazon will be in a prime position to deliver media through its devices.
CEO Jeff Bezos said, "We want to make money when people use our devices, not when they buy our devices."
Jefferies analyst Brian Pitz repeats this sentiment, noting that content distribution is at the core of Amazon's business model.
Analysts have deemed Amazon's prices as "aggressive," pointing out that the company is able to keep prices low for its devices because the profit margin from digital content benefits from a lower price of entry.
Amazon "is serious in becoming a major player in hardware," says Sterne Agee analyst Shaw Wu.
Amazon's primary tablet competition, the Apple iPad, retails for $100 more than the 8.9-inch Kindle Fire HD.
The updated 7-inch Kindle Fire will now cost $159, the Paperwhite e-book reader will be priced at $119, and the Kindle Fire HD's 8.9-inch model will set you back $299 for 16GB of storage. A 4G LTE version on the Kindle Fire HD will also be offered for $499, with a wireless plan that costs $50 for the first year. If you would rather go for the 7-inch Kindle Fire HD, the device will run you $199.
Consumer will be able to purchase the new Kindle next Friday on September 14, and the Paperwhite on October 1.
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