PALO ALTO, Calif. —
It remains to be seen whether Bezos has actually done that. I got to play with the new Kindles for a few minutes in Amazon's press demonstration area, and while I found them pretty impressive, I didn't have nearly enough time to come to any conclusions about how they'll stack up against Apple's stuff.
But during his presentation, Bezos gave us a peek at how Amazon aims to take on the iPad. Apple's chief talent is combining dazzling hardware and software design with production efficiencies. Apple can make the best devices at large scale, and then sell them at prices low enough to foster huge demand but high enough to make handsome profits. Amazon, by contrast, doesn't care much about hardware design. Just like the old Fire, the new Fire HD is a generic, black, glass-and-plastic shell. Amazon's software interface, too, is just serviceable. One thing the firm does care about is hardware specs_Bezos spent lots of time explaining why the Wi-Fi radios in the two Fire HD models were better than those of any other tablet. (Unlike Apple, though, Amazon will buy off-the-shelf components from outside companies.)
So how will Amazon compete? It wants to innovate on price and content. Price is easy: Because it doesn't care about profits on devices, it will always sell its hardware for much less than Apple can. Amazon's top-end Kindle Fire HD, which offers 4G cellular access, is $499; that's the same price as the Wi-Fi only model of Apple's latest iPad. What's more, Amazon has cooked up a 250 MB per month wireless plan for the 4G Kindle that goes for only $50 a year; a comparable AT&T plan for the iPad is $180 per year.