Amazon, the world’s largest online retailer, unveiled its Kindle Fire tablet computer, taking aim at Apple’s bestselling iPad with a device that’s smaller and less than half the price.

The Kindle Fire will have a 7-inch display and sell for $199, compared with $499 for Apple’s cheapest iPad, Amazon executives said in interviews with Bloomberg Businessweek. The device, a souped-up version of the Kindle electronic- book reader, will run on Google Inc.’s Android software, the Seattle-based company said.

Chief Executive OfficerJeff Bezos is betting he can leverage Amazon’s dominance in e-commerce to pose a real challenge to Apple’s iPad, after tablets from rivals such as Hewlett-Packard Co. and Research In Motion Ltd. have fallen short. Sales of Amazon’s electronic books, movies and music on the device may help make up for the narrower profit margins that are likely to result from the low price, said Brian Blair, an analyst at Wedge Partners Corp. in New York.

“Amazon is really the only other guy, the only other potential tablet player, that has a similar offering to what Apple has,” Blair said in an interview last week. “If you look across their product offerings, they have content that none of the other tablet makers currently have because they have content on the media side.”

Amazon shares rose $8.59, or 3.8 percent, to $232.80 at 9:47 a.m. New York time on the Nasdaq Stock Market. The stock had increased 25 percent this year before today.

Apple rose $3.46 to $402.72. Shares of Barnes & Noble Inc., maker of the Nook e-reader, fell 51 cents, or 3.9 percent, to $12.70, on the New York Stock Exchange.

Tablets Surge

The Kindle Fire doesn’t have an embedded camera or a microphone. The device offers Wi-Fi connectivity, though not 3G access, and comes with a 30-day free trial of Amazon Prime, the company’s $79-a-year membership service that includes streaming video and free two-day shipping.

Amazon has painted over the rough surfaces of Google’s Android operating system with a fresh and easy-to-use interface and tied the device closely to its own large and growing content library of movies, magazines and music. Cambridge, Massachusetts-based Forrester Research Inc. predicts the tablet market will grow 51 percent a year through 2015.

While the new Kindle will add to Amazon’s sales, estimated by analysts to rise 32 percent to $64.6 billion in 2012, the company may disappoint if the tablet doesn’t bring in revenue quickly, Steve Weinstein, an analyst at Pacific Crest Securities in Portland, Oregon, said in a note this week.

Original article:Bloomberg.com, 28th September 2011.