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Amazon Kindle lights Fire under Android, RIM

Amazon Kindle Fire's bang-for-the-buck is going to be hard to beat, putting a lot of pressure on Android tablets and BlackBerry's PlayBook.

Brooke Crothers Former CNET contributor
Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.
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Brooke Crothers
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On a bang-for-the-buck index, the Amazon Kindle Fire rates high compared to similar tablets like the BlackBerry PlayBook that are hundreds of dollars more.
On a bang-for-the-buck index, the Amazon Kindle Fire rates high compared to similar tablets like the BlackBerry PlayBook that are hundreds of dollars more. Amazon

The $199 Amazon Kindle Fire is expected to put pricing heat on tablet market. And it's not just the iPad that will feel the pressure, according to an analyst and a cost analysis report today.

"It establishes a new price point for the low to mid-range tablet. Apple will likely have to respond," Ashok Kumar, an analyst at Rodman & Renshaw, said in a phone interview.

A report today from UMB TechInsights says Amazon will make a profit on hardware sales of its Kindle Fire "but probably only a third to a quarter as much as the Apple iPad and [BlackBerry] Playbook," according to estimates from TechInsights that show the Kindle Fire's bill of materials at $150.

That kind of profit margin loss-leader stance "can be viewed as a major blow to all Android tablet manufacturers who really have no way to compete since the channel mark-up would require [that] companies put their tablets at or below cost to beat the Kindle Fire price--and they still all lack the content that the Amazon storefront has," according to the report, citing Jeffrey Brown, vice president of business intelligence at TechInsights.

And tablets like RIM's BlackBerry PlayBook that are similar in design--the PlayBook is also a 7-inch tablet whose chassis looks very similar to the Fire's--may suffer even more. "There have been dramatic cutbacks in the production of the PlayBook" because it is not selling at current prices, said Kumar.

Indeed, the PlayBook has been selling for $499, $599, and $699 at major retailers in the U.S. (though there is the occasional sale that usually proves to be very temporary).

(Update: the PlayBook just went on sale at Best Buy for $299 for the 16GB model, $499 for the 64GB version.)

TechInsights says the Kindle Fire "looks similar in fit and form" to the Playbook and even uses the same, or similar, Texas Instruments dual-core processor.

The Kindle Fire has been stripped of the bells and whistles found on the PlayBook to bring down the price. But for $199, many consumers may be able to do without features like forward- and rear-facing high-resolution cameras, which appear on the PlayBook.

It's not clear, however, how Apple will respond--if it responds at all. Apple is famous for sticking to price points that deliver solid margins in the face of price pressure from rivals. Look no further than the MacBook line.

Amazon Kindle specifications:

  • Screen size: 7 inches, 1024x600
  • Weight: 14.6 ounces
  • OS: Android with Amazon Silk browser
  • Storage: 8GB; free cloud storage
  • Wireless: Wi-Fi (no 3G)
  • Camera: N/A
  • Battery life: rated at up to 7.5 hours of video playback
  • Processor: Texas Instruments dual-core
  • Connectors: micro USB 2.0
  • Price: $199
  • Availability: November 15

BlackBerry PlayBook:

  • Screen size: 7 inches, 1024x600
  • Weight: 14.4 ounces
  • OS: BlackBerry PlayBook Tablet OS (QNX)
  • Storage: 16GB
  • Wireless: Wi-Fi (no built-in 3G)
  • Camera: front and rear
  • Battery life: rated at 10 hours
  • Processor: Texas Instruments dual-core
  • Connectors: Micro USB, Micro HDMI
  • Price: regularly $499