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- Nov 14, 2010
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Amazon is set to join the tablet wars on Wednesday as it launches a rival to Apple's best-selling iPad, a device that has made digital tombstones of all the competition so far.
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The online retailer is set to unveil the tablet at a press conference in New York. Amazon has released no details ahead of the event but the device is reportedly called Kindle Fire, to tie in with its existing ebook reader.
If the Fire does prove to be an iPad rival it will pitch the brainchildren of Steve Jobs and Jeff Bezos, two of Silicon Valley's most innovative tech giants, against each other in a battle analysts say will present the biggest challenge yet to Apple's dominance of the tablet market.
With so little detail available Gartner analyst Michael Gartenberg said he was reluctant to speculate too much. "But it feels like something big is about to happen," he said.
Apple has increasingly encroached on Amazon's business in recent years as its iTunes store has poached more music, movie and now books and magazine sales. Amazon has been building its online presence, too, and entered the hardware business with the launch of Kindle.
The retailer is the biggest online books seller and the US's second largest seller of music online after Apple's iTunes, and it has been increasingly building up its online movies and TV sales and rentals business. The company signed a deal with Fox this week that it said means it now offers more than 11,000 movies and TV shows available via its Amazon Prime service.
Amazon is also competing with Apple to offer a cloud-based media storage service that would allow customers to access anything they buy on any device connected to the internet. Amazon has its own app store already and access to the purchasing habits of its millions of customers and their credit card accounts.
"Amazon has tremendous reach. That makes a huge difference," says Gartenberg. The retailer has a very different approach to Apple, he said, but that is what may make them Apple's biggest threat to date.
"The Kindle for Amazon was about selling books and magazines. Apple's business is about selling devices. You are looking at very different approaches," he said.
Amazon hopes its brand recognition and loyal book-buying customer base will enable it to do battle with Apple, which produced 75% of the tablets sold this year.
Research firm Forrester reckons the Kindle tablet could sell between 3m and 5m units in its first year.
But for all Amazon's muscle, Apple has so far proved a tough competitor. Rival products from Dell, Hewlett Packard and Blackberry maker RIM have all bombed.
According to reports from technology website TechCrunch, the Kindle Fire looks like the BlackBerry PlayBook. RIM said recently it had sold 200,000 of its PlayBooks in the last three months - about what Apple sells in three days.
TechCrunch says Kindle Fire will be a 7in tablet with a $250 price tag. The initial version will offer wireless functionality but no 3G; it will also have a USB port and speakers, but no camera. A bigger, more expensive model will launch next year.
For Colin Gillis, analyst at of BGC Financial, the Kindle Fire sounds more iPod than iPad. Its slimmed-down design sounds like it will be aimed a mass market of people who want a device to watch movies on, read books, listen to music and don't need all the bells and whistles of a fully functioning iPad, he said.
The Kindle Fire is expected to receive a full release in the second week of November seeking to target the important Christmas market. Apple, too, is said to be working on a new iPad for imminent release – and will be watching very carefully for any signs of new gaps in the market.
Gillis this to be a vicious fight. "The tablet is the new store front," he said. Of all the tech giants to enter the tablet wars so far, Amazon is the one with the most to offer and the most to lose.
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