E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
The world’s largest e-retailer heats up tablet competition with a new Kindle HD tablet line.
Tis the season for new tablets. In June, both Google Inc. and Microsoft Corp. released tablets—Google with the small and inexpensive Nexus 7 and Microsoft with its heavier, larger and yet-to-be priced Surface. Not to be outdone, Amazon.com Inc. unveiled today a new group of Kindle tablets—the Kindle Fire HD family priced at $199, $299 and $499.
The Kindle Fire HD starts at $199 and offers a 7-inch HD display, Dolby Digital audio, 16 GB (or 34 GB for $249) of storage and 1920x1200 resolution. It also offers 11 hours of battery life. It is available for pre-order now and will begin shipping on Sept. 14.
The Kindle Fire HD 8.9 starts at $299 and offers the same technology as the 7-inch on an 8.9-inch tablet screen, the option of 16 GB or 32 GB of storage, a 54 pixels-per-inch display and an OMAP 4 mobile processor and graphics engine. Customers can preorder it now and it will ship Nov. 20. OMAP stands for open multimedia applications platform; the processor is designed to achieve high performance while using low power.
The 8.9-inch Kindle HD 4G starts at $499, offers 32 GB or 64 GB of storage, plus 4G LTE wireless powered by a 4G chipset. It also comes with a $49.99 one-year 4G LTE data package, which offers 250MB of storage per month, 20GB of Amazon Cloud storage, and a $10 credit in the Amazon Appstore. Customers can preorder it now; it will ship Nov. 20.
Kindle Fire HD 8.9 weighs 20 ounces and Kindle Fire HD 7 weighs 13.9 ounces.
All versions of the new HD tablets offer a laminated touch screen for 25% less glare, Amazon says, plus dual antennas, multiple inputs and outputs, and dual speakers with Dolby Digital Plus audio. The tablets also offer a front-facing HD camera, a Skype app for video calling and new Amazon features. These features include X-Ray for Movies, which allows customers to tap the screen to access the IMDb (Internet Movie Database) to learn more about a movie, and X-Ray for Books, which lets readers see all the passages across a book that mention ideas, fictional characters, historical figures, places or topics that interest them, as well as more detailed descriptions from Wikipedia and Shelfari, Amazon’s community-powered encyclopedia for book fans. Other features include Whispersync for games and Whispersync for voice. Whispersync always places users at the last point of interaction regardless of which device they are on; many Amazon customers use iPad, iPhone and Android apps for the same features. Kindle Fire users also can access a large library of digital content, including more than 22 million movies, TV shows, games, books and magazines.
“We’re taking on the most popular price point for a tablet, $499, but doubling the storage and, incredibly, adding ultra-fast 4G LTE wireless,” says Amazon CEO Jeff Bezos. “Kindle Fire HD is not only the most-advanced hardware, it’s also a service. When combined with our enormous content ecosystem, unmatched cross-platform interoperability and standard-setting customer service, we hope people will agree that Kindle Fire HD is the best high-end tablet anywhere, at any price.”
Amazon also unveiled today upgraded versions of the standard definition Kindle Fire with a faster processor, twice the memory and longer battery life. It also dropped the starting price of that tablet to $159 from $199. Just last week, Amazon said the standard Kindle Fire, launched nine months ago, now accounts for 22% of all tablets in the U.S. and is the top selling product on Amazon.com.
Amazon is joining a chorus of new device announcements with today’s new line, Robert W. Baird & Co. investment analyst Colin Sebastian wrote in a report this week on the new Amazon tablet. He says the new Kindle sets the stage for a fierce market share battle with Apple Inc. and Google – or more likely, a battle for second place with Google’s recently released Nexus 7, given Apple’s significant advantages.
Indeed, the Kindle Fire HD and the other new tablets from Google and Microsoft will have a tough road to hoe if Apple unveils its rumored mini-iPad in October as many industry analysts speculate. The mini will likely be less expensive, enabling consumers who wanted an Apple tablet but were leery of the price tag (the iPad 2 starts at $399) a chance to nab one.
If that happens, analysts say it will further solidify the competition between Amazon and Google for second place. “With 22% share of tablet sales in the U.S. since launch, Amazon has sold 5-6 million Kindle Fire units, by our estimation,” Sebastian says. “Google’s Nexus 7 tablet provides a reasonable basis for setting expectations, including a faster and more powerful processor and camera for taking pictures and video chat.” Google’s seven-inch tablet, made by manufacturer Asus, sells for $199.
The Nexus 7 offers a quad-core processor and up to eight hours of battery life. It features a 1280x800 high-resolution display protected by scratch-resistant Corning glass. It’s powered by Google’s newest Android operating system, Android 4.1 or Jellybean. It weighs 12 ounces.
Google is serious about competing in the tablet space, and could pose stiff competition to Amazon, Forrester Research Inc. analyst James McQuivey said after the June release of Google’s Nexus 7. The Google tablet is going head-to-head with Amazon’s Fire, with its low price tag, smaller screen and tie-in with a marketplace full of apps and games.
“Learning a lesson from Amazon, Google can see that the only way to beat the premium-worthy iPad is to go for the millions of customers who are ready for smaller and cheaper tablets, and then grow those customers into more Android-powered devices and, more importantly, Google-powered services like Google Play,” McQuivey says. “That range of services will be the secret to stitching together this fleet of Android gadgets into a platform that can compete with Apple for minutes of user's attention rather than premium device dollars.”