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When Barnes & Noble showed off its new Nook Tablet, the company had one goal in mind: Make all those folks who preordered the Kindle Fire rethink their decision. The Nook Tablet comes with a 7-inch display and Android-just like the Kindle Fire-but it doubles the amount of storage to 16GB and offers twice as much RAM as the Amazon rival. That said, the device retails for $249, making it $50 more expensive than Amazon’s option.
Barnes & Noble’s swift and strong response to the Kindle Fire is notable. The company appears to see Amazon’s upcoming tablet as a threat, and the last thing it wants to do is allow the online retail giant to take a commanding lead in the lower-end tablet/e-reader market.
This leads one to wonder: What other companies might also be worried by what Amazon is planning to launch next week? After all, the tablet market is very much up for grabs right now, and the company that delivers the best solution-next to the Apple iPad-will likely be able to generate huge amounts of cash. Simply put, there is a lot riding on second place in the tablet market, and for now at least, many firms appear to view the Kindle Fire as their biggest rival.
Read on to find out why so many companies are scared of the Kindle Fire:
1. It’s from Amazon
Let’s face it:The Kindle Fire isn’t all that unique. Several companies currently sell low-priced Android-based tablets that come with few high-powered features, and they’re largely ignored by competitors. But Amazon is different. The competing tablet makers know about its marketing power. They understand how well-respected its brand is, and they see that it has the ability to dramatically change a market.
2. The price is right
At $199, Amazon is making it clear that it wants to at least become the second-place competitor in the tablet space behind Apple. Currently, there are several Android-based tablets that costaround the $499 price point that Apple’s cheapest iPad holds. However, the number of low-priced alternatives, in comparison, is quite low. The Kindle Fire might just bring more consumers into the tablet space, and Amazon will profit from all of those folks.
3. It could put Android on the map
Looking beyond Android competitors, the Kindle fire could also scare Apple and Research In Motion. Those companies would like nothing more than to see Android fall flat in the tablet space. And so far, it has. But the Kindle Fire could change that.
4. Consider the apps
Surprisingly, Google has become a competitor to Amazon and the Kindle Fire. Sure, Google services will be available on the Kindle Fire, but one of the biggest features in the tablet-its app store-will not be powered by Google’s Android Market. Instead, applications will be available through Amazon’s own app store. If the Kindle Fire takes off, that could be a major issue for Google.
Kindle Fire Could Make Tablet Market a Two-Horse Race
5. Consumer excitement seems groundbreaking
Looking around the tablet space, it’s hard to find a single model besides the iPad that has excited consumers as much as Amazon’s Kindle Fire. That’s a key component in the fear the Kindle Fire brings to the tablet space. The original Kindle e-reader was highly popular with consumers. It set the stage for consumer interest in the Kindle Fire and helped ensure that it won’t be ignored when it starts shipping. Unlike so many previous tablet models, Apple and the other rival tablet makers can’t just dismiss the Kindle Fire.
6. It’s anybody’s game
Unfortunately for the Kindle Fire’s competitors, none has been able to establish a dominant position in the Android tablet space. In fact, the tablet market isvery much up for grabs right now. Since the Kindle Fire is widely expected to grab some significant market share, that means Amazon seizes the market position that the other Android vendors have been trying to take.
7. It could significantly hurt margins
As noted, the Kindle Fire is significantly cheaper than most tablet competitors. If it catches on, the competition will be forced to drop the prices of their own tablets or offer new less-costly devices to stay in the race. While that might help sales, it could also negatively affect margins. Currently, tablets are profitable. But if the Kindle Fire takes off, there’s no telling if that will still be the case.
8. It limits future software opportunities
The Kindle Fire’s Android installation is an important component in this story. If the device is successful, it will mean consumers will increasingly turn to Android-based devices. That means companies that aren’t offering Amazon on the tablets will need to think about doing so fast. After the Kindle Fire launches, it might very well become a two-OS race in the tablet market.
9. Integrated services push investments up
Like Apple, Amazon has decided to integrate its many services into the Kindle Fire. So, customers will find Kindle ebooks, have access to the company’s MP3 store and be able to store content in the cloud.If the Kindle Fire proves successful, other competitors might need to develop and integrate their own services to keep up. And that can be costly.
10. Think about the retail partnership
Amazon’s position as a huge online retailer should also strike fear in the competition. After all, the Kindle Fire’s competitors rely upon Amazon to sell their own products. If the Kindle Fire takes center stage on the company’s site, how might their own devices be affected? Amazon’s huge customer base is not only a tool to beat competitors; it’s a tool to keep competitor sales at bay.