Amazon’s Kindle Fire launching soon

Amazon is expected to unveil an Android powered tablet which may or may not go by the name of the “Kindle Fire” this week. According to reports, the Kindle Fire will be a 7” tablet which will look very similar to the Blackberry Playbook.

The report continues by saying that the Kindle Fire will ship in the second week of November.

Analysts predict that the Kindle Fire could become a rival to the iPad 2 and ensure that another competitor is able to enter the rapidly expanding tablet market.

Independent analyst Carmi Levy said, “More than any other recent tablet introduction, Amazon’s entry is set to shake the still-solidifying market to its very core. Unlike hardware manufacturers who lack the pockets and the resolve to slug it out with Apple in a protracted war over market share, Amazon has both the resources and the will to stay in the game as long as it needs to.”

“It is bit like David taking on Goliath,” says Forrester researcher and senior analyst Rotman Epps. “Amazon’s willingness to sell hardware at a loss combined with the strength of its brand, content, cloud infrastructure, and commerce assets makes it the only credible iPad competitor in the market.”

Analysts have rallied behind a significantly cheaper Amazon tablet offering in comparison to the iPad 2. The most inexpensive iPad retails for US$499, the Kindle Fire is expected to undercut this price by half.

According to Citi analyst Mark Mahaney, the projected costing of Amazon’s tablet could stand it in good stead. “Pricing remains a critical factor, and $200-$300 is an important range to draw new buyers into the tablet market. Amazon faces a significantly large tablet opportunity given its history with being price competitive, ability to enjoy very low distribution costs (vs. other tablet brands), and its ability to integrate top consumer-preferred activities on tablets,” he says

Predicted sales for the Kindle Fire could be in the region of three to five million tablets sold. Amazon’s profits will not be met on the hardware, but on the digital content sales which have proved so successful with the Kindle eBook reader. “Over the past few years, Amazon’s customers have gotten used to one-click purchases of books and other published content via the Kindle. Amazon doesn’t need to maximize its profits on every tablet sold.”