Amazon’s Kindle Fire HD won't topple Apple's iPad

Posted by Trent Nouveau

Amazon's Kindle Fire HD lineup may be an "ambitious" initiative, but is unlikely to unseat Apple's iPad as the reigning king of the tablet market.

However, the new tablets will almost certainly make it more difficult for competing companies, such as Samsung, HTC, and Research in Motion, to gain traction in the highly competitive space.

"We believe the Nexus 7, which has seen strong sales since its introduction in mid-July, could see competitive pressure with the new 7-inch Kindle Fire HD, which has the same price point at $199 but sports an additional 8GB of storage for a total of 16GB," Sterne Agee analyst Shaw Wu explained in an industry note obtained by AppleInsider. 

According to Wu, the Kindle Fire HD has exerted even greater pressure on Redmond and its nascent Surface tablets, which he believes will have to be priced at $299 or lower to have even a minimal chance of succeeding.

The likely endgame in the tablet market, says Wu, is that no hardware makers other than Apple will be profitable due to Amazon's aggressive pricing. Nevertheless, Wu did note that he remained uncertain about Amazon's content reselling business model.

"We question the company's stance where it believes it can make profits on content is the right business model, as reselling someone else's content has historically proven to not be a very profitable venture,” he said. 

Meanwhile, Brian White of Topeka Capital Markets opined that Amazon's expanded Kindle Fire lineup would be no match for Apple's iPad and its extensive iOS ecosystem.

"Apple still rules the tablet world and we believe the soon to be launched 'iPad Mini' at a $250-$300 price point (possibly a bit lower) will expand the company's addressable market opportunity significantly with a 7.85-inch tablet, and potentially even surpassing sales of the regular-sized iPad," White added.

Amazon unveiled its next-gen Kindle Fire tablet lineup at an event in California on Thursday. The flagship Kindle Fire HD boasts an 8.9-inch, 1920 x 1200 display (or 254 ppi) and is powered by an OMAP 4470 processor from Texas Instruments (TI). It also features stereo speakers, a dual-band 2.4GHz/5GHz (WiFi) receiver and 16GB of storage space.

 Additional specs include a polarizing filter to help reduce glare, along with a laminated touch sensor that offers improved sharpness and contrast.

Pricing? You can pick up the 8.9-inch HD tablet for $299. A 4G LTE version with 32GB of storage will cost you $499 - and $50 a year for 250MB monthly. Pre-orders start now, with shipping kicking off on September 20th.

A 7-inch version of the Kindle Fire HD will be available for $199 on September 14th.  The smaller iteration features the same internal specs as its 8.9-inch counterpart, including dual-antenna 5GHz WiFi, stereo speakers, OMAP TI 4470 processor, HDMI, Bluetooth connectivity, a front-facing HD webcam for Skype and 16GB of storage.