Amazon unveils ad-funded tablets

Amazon has expanded its range of Kindle Fire tablets with more devices that are cheaper than Apple’s iPad, subsidised in part by advertising.

Kindle Fire HD

The online retailing giant launched three new Kindle Fire devices at an event in California yesterday (6 September). Of those, two ”Kindle Fire HD” devices are larger than its predecessor that launched in the US last year, while the third is an upgrade of the original model at a lower price.

All the devices will feature “special offer” adverts when the screens are locked and in the corner of the home screen, which will help keep the price of the devices low. This will include ads for Amazon’s own stores as well as special offers from brands such as AT&T, Discover and Intel.

The tablets range in price from £129 for the lowest end device to £159 for the 7 inch 16 gigabyte model. Both will be available in the UK from the end of October. An 8.9 inch Kindle Fire HD is only being released in the US and will be available from November.

Amazon’s tablets are far cheaper than those of rivals, with the iPad 2 currently retailing for £329 and the Google Nexus 7 and Samsung Galaxy Tab 2 both at £199. Its closest competitor by price is the Kobo Arc tablet, which retails at £189.

The Kindle Fire HD devices feature a front facing camera and two WiFi channels to provide faster downloads. They will run on Android 4.0.

Amazon has been keen to expand into the mobile sector as consumer trends to buying digital streaming services and downloads over physical CDs, DVDs and games. It has looked to build an ecosytem around entertainment apps and its own devices, having launched its own app store earlier this year.

The company now claims it has a 22 per cent share of the US tablet market.

Jeff Bezos, Amazon’s founder and chief executive, said at last night’s event: “We want to make money when people use our devices rather than when they buy our devices.”

It has also been reported this week that Amazon is also set to launch an assault on the smartphone market by developing its own device, although the company did not mention this development at yesterday’s event.

Andy Castonguay, principal analyst at Informa Telecoms and Media, says of the new Kindle Fire HD tablets: “Amazon’s combination of an expanded hardware offering and well-integrated and robust media services are well positioned for the short-term, but the online innovator will no longer be able to compete with only annual updates to its devices portfolio – even with the improved quality and continued value pricing.”

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