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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

September 6, 2012 at 10:25 AM

Amazon unveils new Kindles, big Fire for $299, LTE for $499

SANTA MONICA, Calif. — You couldn’t miss the symbolism: In its latest push into Apple’s territory, Amazon.com used a California airport hangar to launch its latest devices.

Or maybe it was just baiting the press with pun opportunities — seeing how many “launch” and “take-off” headlines it could get for its new gadgets.

The array of new Kindles includes a new 9-inch version of the Kindle Fire directly challenging Apple’s iPad and an illuminated Kindle e-reader to fend off the challenge from Barnes & Noble’s Nook GlowLight.

Topping the lineup is a $499 Kindle Fire HD with 4G LTE wireless service, available for $50 per year.

The arrival of higher-end, full-color media tablets shows how ambitious Amazon’s plans are for its Kindle business and how far it’s come since it began with a quirky, black-and-white e-reader back in 2007.

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“We love to invent. We love to pioneer. We even like going down alleys that turn out to be blind alleys,” Chief Executive Jeff Bezos said, opening the event. ” Of course, every once in a while one of those blind alleys opens up into a broad avenue and that’s really fun.”

Bezos set up the announcement by saying that people are tired of gadgets and that’s why most tablets launched over the past year didn’t succeed. In contrast, he characterized the Kindle as a service.

“People don’t want gadgets anymore. They want services,” he said, then played a video ad for the new Kindle “Paperwhite” with a new, illuminated screen.

Amazon’s ads aired before the event, confirming months of speculative reports about today’s announcement. Some expected the company to also announce a phone using the modified Android software that powers the Kindle Fire, but that didn’t happen just yet.

Although the LTE version of the Fire is the new flagship, a bigger seller is likely to be the new Kindle Paperwhite with a black-and-white display that’s higher contrast than previous models. It’s 9.1 millimeters thick, weighs 7.5 ounces and has a battery that lasts eight weeks between charges.

The Paperwhite is now on sale for $119 with deliveries starting Oct. 1. A version with 3G wireless is $179.

To demonstrate its light, Amazon set up a tent at its press event. The screen lives up to its name, with pages having the appearance of white paper. Its LED lighting system — which is on whenever the device is powered on — evenly lights the page and is much brighter than the glowing effect of the illuminated Nook.

A new feature predicts the amount of time it will take to complete a chapter, based on the device’s analysis of users’ reading pace.

Also updated is Amazon’s entry-level Kindle, which is dropping in price from $79 to $69. It’s getting more fonts to choose from, and Amazon says its pages turn 15 percent faster, but I couldn’t tell in a quick test at the press event.

Bezos then introduced two new versions of the color Kindle Fire. The basic model is getting improved processing power and a price drop, from $199 to $159.

He also unveiled entirely new Kindle Fire HD models, including a new, larger model with an 8.9 inch display, slightly smaller than the 9.7-inch display on Apple’s iPad.

The 7-inch Fire HD version with 16 gigabytes of memory will cost $199 and ship Sept. 14. The 8.9-inch Fire HD with 16 gigs will cost $299 and ship Nov. 20.

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Amazon quietly made one significant change to the pricing and initial set-up of its Kindles. All models are now configured to display ads, by default, on their start screen.

Last year, Amazon began offering discounted Kindle models that came “with offers.” Now they’ll all come “with offers,” but they can be permanently removed for an additional $20. So if you’re looking for an ad-free Kindle, add $20 to the list price. (UPDATE: An Amazon spokeswoman clarified today that you can’t opt-out of the ads on the Kindle Fire.)

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The new Fires have a more rounded case that feels smoother and less bulky than the first model that debuted a year ago. A nice addition is a photo gallery app that displays photos stored online with Amazon, in addition to those loaded directly onto the device.

New services available for the HD include “X-Ray for Movies,” which offers up details, such as actor biographies when a movie is launched, drawing on Amazon’s IMDb entertainment database.

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During a brief test of the tethered versions on display at the press event, the X-Ray window popped up in a matchbook-sized window in the upper left corner of the screen when a movie was launched. It disappeared when I tapped the “play” icon and resumed the movie.

The higher-end version with 4G LTE wireless, and 8.9-inch display and 32 gigs of memory will sell for $499 and ship Nov. 20.

Amazon is offering the LTE service directly, charging $50 per year for 250 megabytes per month plus 20 gigabytes of online storage. The wireless service is provided by AT&T, from which additional data plans will be offered.

Bezos is especially proud of the LTE model and explained in detail its features, which he characterized as a wish list of things that the company could include by offering a tablet at such a high price compared with other Kindles.

Those features include an LTE antenna that Amazon engineered itself because it found off-the-shelf version were too thick for its tablet.

“We have just built the best tablet at any price,” he said.

Apple and Microsoft — which is releasing its first tablets this fall — declined to comment on that assertion.

Bezos said the company can offer low prices on the hardware because it makes money from the devices after they’re sold.

“We want to make money when people use our devices, not when they buy our devices. That is better alignment,” he said, adding that the approach also avoids putting people on the “upgrade treadmill.”

Features include stereo speakers and Dolby Digital Plus sound processing.

The new Fire also has improved email capabilities, including Exchange sync, and special apps built by Facebook and Skype. The Skype app uses the device’s front-facing video camera for making free video calls.

Also new on the HD is “Whispersync” for voice and games, which lets people listen to audio books or play games and later resume where they left off.

Noting that he has four kids and there’s tension between screen time and other activities, Bezos announced Kindle FreeTime, which lets users set up profiles for different users and add time limits and other parental controls. In “FreeTime” mode the screen turns blue so parents can see it’s activated from across the room.

“I know, genius,” Bezos joked.

To improve the wireless performance, Amazon gave the HD models dual antennas and MIMO Wi-Fi technology. Bezos spent awhile explaining this technology, with the punchline being that the Kindle Fire HD has 41 percent faster Wi-Fi than the iPad 3 and 54 percent faster Wi-Fi than Google’s Nexus 7.

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Bezos didn’t mention it during his presentation, but the new Fire models also have a new power switch that’s flush with the case, unlike the protruding nub on the first model that’s easy to accidently turn off.

Amazon is updating its hardware lineup ahead of a holiday season that will see intense competition among tablet devices, especially at the lower-end, 7-inch range that includes the Kindle Fire and Google Nexus. Amazon also is competing with Barnes & Noble’s Nook, which already sells an illuminated e-reader.

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The hardware update comes as the market for dedicated e-readers such as the original Kindle is tapering, especially in the U.S., with consumers moving toward color media tablets such as Apple’s dominant iPad.

A record 25 million full-featured media tablets were sold in the April-June quarter, up 77 percent over the previous year, according to ABI Research. The firm believes the e-reader market peaked with 15 million readers sold last year but will continue to grow at around 6 percent a year.

That doesn’t mean Amazon’s Kindle business has peaked, though. Bezos said it continues to make money from even the oldest Kindles as people use them to buy more books.

“What happens when you build a great service?” Bezos said. “People read more.”

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Comments | More in | Topics: Amazon.com

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