Amazon’s sales will be on fire with the launch of its new tablet PC.

Amazon’s sales will be on fire with the launch of its new tablet PC.

Last week the etailer launched its new tablet PC, the Kindle Fire. The long-awaited device costs just $199 (£128) and is marketed for “web, movies, apps, games, reading and more”.

The Fire will begin shipping on November 15 in the US. It is likely to appeal to a wide audience and boost Amazon’s already rocketing sales during its fourth quarter.

Electronics retailers will be keen to get their hands on the Kindle Fire as well as Amazon’s new range of Kindle e-readers, which were announced at the same time. The new Kindle is already available in the UK, with the other devices likely to follow early next year.

Unlike Apple, Amazon is not expected to make much profit from the sale of its new tablet device; some estimate that it may even be a loss-leader. For Amazon, the Kindle Fire is a means to boosting sales of its popular entertainment categories including music and e-book downloads, apps and movie streaming.

The Fire has been designed with movie streaming in mind and incorporates some appealing technological wizardry such as its ‘split browser’, Amazon Silk, which maximises the use of Amazon’s cloud. Shipping it with a one-month subscription to Amazon Prime (with access to more than 10,000 movies and TV shows) and a wide viewing screen, the company is likely to use the Kindle Fire to accelerate a shift to digital movies in the same way that the Kindle has grown demand for e-books. Amazon’s Whispersync even remembers your place if you switch devices, making movie-watching a pleasure. When it launches in the UK, the Kindle Fire is most likely to include a similar offer with Amazon’s Lovefilm service.

Planet Retail is already projecting that Amazon will be among the Top 10 global retailers by 2015 (from number 31 currently) and the launch of the Kindle Fire and new Kindle line will give its sales a further boost. But the recent demise of the US bookstore giant Borders is proof that Amazon’s growth usually comes at the expense of others, and entertainment specialists, booksellers and retailers of DVDs should be concerned.

As chief executive Jeff Bezos told an Amazon press conference: “These are premium products at non-premium prices. We are going to sell millions of these.”

  • Lisa Byfield-Green, retail analyst, Planet Retail. For more information contact us on:

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