Amazon has kickstarted the feature tablet market

Amazon unveiled its long awaited tablet, the Kindle Fire, this week. While it’s unlikely to be the device to kill off the iPad, it may well have kick started a whole new category of its own: the feature tablet.

The cut-price device will cost just $199 (£127) – undercutting almost all of its rivals in the tablet market, including Apple, Samsung and RIM.

Apple dominates Europe’s tablet market, with a 67% share in the second quarter of 2011, according to IDC. The iPad 2 currently retails at about £320 for the most basic of its models.

Its closest (in the loosest sense of the word) competitor is Samsung, which had just a 7% share of the market in the period. Galaxy Tabs also cost in the region of £300-400 – although the most souped up version retails for more than £500.

There are other tablets on the market that are even cheaper than the Kindle Fire, but they are not attached to a trusted brand name and proven experience in the digital entertainment market with its e-book offering.

The device offers its own app store and streaming of its massive library of music and video content – a clear poke in the eye to iTunes – which ties directly into users’ already existing Amazon accounts.

For this reason Amazon also has the advantage of data over its competitors in the tablet space: hundreds of millions of people already buy from the company, who in turn provide their names, bank details and – through their purchases – an insight into their interests.

Brands looking to develop apps or adverts for specific tablets could tap into this insight to produce targeted media based on the gargantuan database Amazon already has at its disposal.

The price point does have its trade-offs: the device does not have a camera or 3G. The device also won’t be available outside the US for some time because of its tie up with the cloud player, which is not yet in other territories for legal reasons.

But, in the ever thorny tablet war against Apple, it seems it might be price alone that will lead to the market becoming a little less monopolised.

Big brand manufacturers have tried and failed to produce iPad killers. The Blackberry PlayBook, Samsung Galaxy Tab, and HP TouchPad all had the bells and whistles in terms of tech to rival Apple, but they failed to make even a dent to its ever-growing dominance. Purchasers, it seems, are buying on brand reputation rather than spec.

In fact, the HP TouchPad, with its Beats by Dr Dre speakers and multi-tasking, only sparked consumers’ interest when the company dramatically slashed the price of the product to around £89 to sell off excess stock after it announced it was retreating from the hardware business.

It doesn’t need me to state that tablets are hot property at the moment (I’ve gone and said it anyway), but at currently they are a luxury item, mostly confined to suit-wearing commuters.

A £130 tablet opens up the market to everyone and has launched just in time to fill (7-inch) Christmas stockings across the land.

By producing a “feature tablet”, one that might not have the bells and whistles of its older brothers but still functions in a similar fashion, Amazon could get a grip on the market in the same way that Nokia still has a strangehold of the entire mobile phone sector because there is still a demand for feature phones that are cheaper than a dinner.

In these current times, price really is everything. Whether it is the supermarkets’ price drop war, fast fashion, or the growing demand for discount code and vouchers, everyone is on the hunt for a bargain.

Amazon has launched a seemingly luxury item at a bargain basement price at just the right time, pushing almost all of its Android competitors out of the market. The showdown between Apple and Amazon is officially on.