) slashed the price of Kindle Fire high-definition (HD) 8.9
tablets in order to make the device more affordable and thrive in
the highly competitive environment. The online retailer also
announced the availability of its 8.9 inch Kindle Fire HD tablets
across the U.K., Germany, France, Italy, Spain and Japan.
The company stated that the WiFi version of the Kindle Fire HD
8.9 inch tablet will now be available in the U.S. for $269
instead of $299 while the price of the 4G version will come down
to $399 from $499.
The Kindle Fire HD 8.9 inch is a large-screen version of
Amazon's Kindle tablet used for web browsing, email, gaming,
watching TV shows, reading magazines and more. It comes with dual
band Wi-Fi connectivity and MIMO technology that speeds up video
streaming and downloading. The device also includes an upgraded
version of Immersion Reading that allows the user to hear
narration by a popular actor while reading a book.
The company entered the tablet market with the shipping of
Kindle Fire in late 2011. The tablet market is getting more
competitive by the day.
) leads the race so far with record unit shipments of its iconic
iPad but Amazon's lower-priced Kindle Fire has also seen very
strong demand. Other players like
) have also stepped in to grab a share of the pie.
Though Amazon's unit sales are far behind Apple's iPad and
Samsung Galaxy tablets, we believe that the lower rates will
definitely create a price war in the tablet market and will
continue to pressure the high-volume Android OEMs like Samsung,
ASUS and even Google.
We view Amazon's expansion into the tablet market as a
defensive move, designed to protect its leading share of the
e-reader market and maintain sales of books and other digital
products through the Kindle platform. Even if Amazon does not
make big money from tablets, it will increase the number of
customers buying both physical and digital products from the
company, such as movies, music, games and apps, thus increasing
At the same time, we think there is a certain amount of
uncertainty regarding Amazon's investment plans, which could
continue over the next few quarters. While it is true that these
investments are going to drive the next phase of its growth,
near-term earnings will remain under pressure.
Amazon currently retains a Zacks Rank #3 (Hold).
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