Amazon to launch new Kindle Fire today
The Associated Press Posted: Sep 6, 2012 10:14 AM ET Last Updated: Sep 6, 2012 11:01 AM ET
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Amazon is estimated to have sold seven million Kindle Fire tablets, pictured above, between November and the end of June. Last month, it said it has sold out of the devices, and it is expected to launch a new version of the tablet on Thursday. (Mark Lennihan/Associated Press)
Amazon.com Inc. is expected to unveil a new Kindle Fire on Thursday as it seeks to take a bigger bite of the tablet computer market and boost sales of digital goods like e-books and movies.
The announcement at a former airplane hangar in Santa Monica, Calif., will feature CEO Jeff Bezos, who announced the first $199 US Kindle Fire in New York less than a year ago.
In the nine months since it began selling in November, Kindle Fire has captured 22 per cent of tablet sales in the U.S., Amazon said last week.
The company also said it sold out of the devices, which suggests that Amazon halted production in preparation for a new model.
The current version of the Kindle Fire is not available in Canada or anywhere else outside the U.S., and it's unclear whether that will change with the new model.
Customers who purchase the device in the U.S. and use it outside the country can purchase and view e-books on it but are limited in making the most of some of its other features since they cannot access the Amazon app store, for example, and some streaming services.
Estimated 7 million units sold
Although it didn't divulge actual sales figures, analyst Anthony DiClemente with Barclays Capital estimates that Amazon sold seven million tablets combined from November through the end of June.
Its sales amounted to just five per cent of the global market in the second quarter, far smaller than the 68 per cent market share for Apple's iPad, and behind the 10 per cent share for Samsung's Galaxy Tab, he said.
Apple sold 17 million iPads in the April-June period alone and more than 84 million since its debut in 2010.
Amazon has pursued the strategy of selling lower-priced tablets at razor-thin, if any, profit margins in order to boost sales of digital items from its online store. Its Kindle Fire is half the price of Apple's cheapest iPad, which sells for $399. It also has a smaller screen, lacks a camera and only connects to the internet over Wi-Fi.
A newer model might resolve some of these shortcomings. Amazon is also expected to offer a new lineup of Kindle e-readers, which have screens that render images and text in black and white and sell for as little as $79.
Amazon is facing tougher competition.
In July, Google Inc. began shipping its $199 Nexus 7, a tablet that is about the same size as Kindle Fire but boasts a better quad-core processor, compared to Kindle Fire's dual core, a camera and an updated version of the Android operating system.
Microsoft Corp. will start selling its Surface tablet, which has a screen that is 10.6-inches diagonally, in October with prices that are expected to be more in line with those of the iPad.
There is also speculation that Apple may also unveil a smaller iPad at an event in San Francisco next Wednesday that could reduce the price gap between it and other offerings.
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