The Kindle Fire is coming, and it's going to be a headache maker for its competitors. The dirt cheap $199 price, the cloud-based ear and eye candy, and Amazon.com's
"Kindle Fire brings everything we've been working on at Amazon for 15 years together into a single, fully integrated experience for customers -- instant access to Amazon's massive selection of digital content, a vibrant color IPS touchscreen with extrawide viewing angle, a 14.6 ounce design that's easy to hold with one hand, a state-of-the-art dual core processor, free storage in the Amazon Cloud, and an ultra-fast mobile browser -- Amazon Silk -- available exclusively on Kindle Fire," reads Bezos' letter that popped up on Amazon's home page this morning.
The new gadget won't ship until Nov. 15, but it's never too early to crank up the hype.
Amazon's gains will come at the expense of others, naturally. Let's take a look at the three companies with the most to lose.
Barnes & Noble
Few saw the $199 price coming. The floor seemed to be the $250 that Barnes & Noble charges for the Nook Color, and the two most popular estimates called for either $300 or a match to the Nook Color.
It was nice knowing you, Nook Color.
Making things worse for the giant bookseller, Amazon is also lowering the price of its traditional Kindle to $79, while introducing a touch-based e-reader at $99 for Wi-Fi or $149 for 3G. In short, Barnes & Noble is getting smacked around from all over. The retailer has no choice but to respond with price cuts of its own, weighing on already meager margins.
Everything leading up to this morning's reveal made it seem as if Amazon was gunning for the iPad 2 rather than the Nook Color. This will dent Apple's chunky market share, but the Kindle Fire is no iPad 2.
There's no camera. There's no microphone. We're looking at a seven-inch screen that is larger than a traditional Kindle e-reader, but much smaller than the iPad.
However, the Kindle Fire is a multimedia beast. It streams video and music, plays games, downloads apps. The dual-core processor and beefed up mobile browser will also make it a decent surfing gadget -- and not just through Amazon's virtual storefront.
Unlike the countless other tablet manufacturers that have butted heads with Apple and lost, Amazon has the ecosystem in place to deliver all of these digital goodies (and to profit from them). Many iPad owners won't be able to live without the FaceTime and GarageBand apps that just aren't possible given the Fire's limitations, but a 60% cheaper tablet will turn heads in this soft economy.
Will there be a dedicated Kindle Fire streaming app for Netflix? It may not matter. Amazon is giving every Kindle Fire buyer a 30-day free trial to Amazon Prime, the loyalty shopping club where active buyers pay $79 a year for free two-day shipping on the site. A Prime perk that was introduced earlier this year was unlimited streaming on a limited catalog of videos. That digital vault is now up to 11,000 titles.
Since a lot of the folks preordering today -- as I did earlier this morning -- are already Prime members, this translates into the ability to stream thousands of videos at no additional cost as long as there's a Wi-Fi connection around.
The selection on Netflix.com is considerably better, but only one of the two services is now available at no extra cost to millions of members and also offers new releases as a la carte streams.
It's not just Barnes & Noble, Apple, and Netflix that are cursing under their breath today. Research In Motion
How is Microsoft
Amazon is a major disrupter today. Board rooms at several tech titans are no doubt loading up on aspirin bottles in response.
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Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story, except for Netflix. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.