Amazon.com (NASDAQ:AMZN) has made waves with the announcement of the Kindle Fire HDX, a new tablet designed to compete with Apple's (NASDAQ:AAPL) iPad Mini. Some critics see this device as yet another iPad copycat, slated to be second-rate once the pomp and circumstance subsides. Yet, I think they underestimate Amazon and overestimate Apple's dominance. The Kindle Fire HDX has a few features that will make techies drool.
A Snapdragon pops up
While the iPad Mini is using a Dual-Core A5 processor, Amazon stepped up its Kindle with Qualcomm's (NASDAQ:QCOM)(NASDAQ:QCOM)(NASDAQ:QCOM) Snapdragon 800 processor . This is one of the fastest processors on the market today. Billed as being 75% faster than its predecessor, (the S4), the Snapdragon runs four Krait 400 cores at 2.3 Ghz per core, this is twice as powerful as the iPad Mini processor in both Ghz as well as how many processors it contains.
The Snapdragon is scheduled to be in a few other devices this holiday shopping season, which is good news for Qualcomm's future earnings. This company's expansion into mobile processing will make it a power player in the tablet and phone industries, albeit an internal one. It may play second-fiddle to the tablet makers, but that makes it a quiet sleeper pick for the tech investor in the know.
While not equipped with its own version of Siri (at least not yet), Amazon does have Mayday, a drop-down feature in the Settings tool bar that enables the user to connect to a customer service representative anytime you have an Internet connection. Calling on Mayday brings you face-to-face with an Amazon rep who can access your tablet to fix any problem you might have, possibly within 15 seconds.
Anonymity is also an important Mayday feature. You can see the service rep, but they can't see you, and any password or credit card information you have on your Fire will be blacked out on their end. It's about as safe as you can be on a tablet, while taking tech support to a whole new level. Sure, some users may miss Siri, but Mayday's intuitive new customer service features should more than make up for it.
And it's still cheaper
It's been said on this site, and a number of tech-centric websites that the worm in the Apple is the price. Apple products are typically more expensive than their PC and Android counterparts, but typically make up for it by being more technologically advanced and user friendly. With 375,000 tablet-friendly iPad apps vs. less than 100,000 Kindle apps,apps have long been Apple's strong suit, and to a lot of people who are glued to their tablets and smartphones, apps are everything.
Yet here, Amazon's powerful processor and innovative customer service may make up for the deficiency in apps, which highlights the value of the tablet even further. Moreover, the new tech upgrades may signal future editions of the Fire, including a possible expansion of the app store, if sales do well this holiday season.
There is every reason to think that the Kindle's unique features will draw enough people to establish Amazon as a serious player in the tablet industry, which should guarantee long-term success shareholders thanks to Amazon's growing diversity in the company's holdings and operations. At a cost of $330 for the 8" iPad vs. $230 for the 7" Fire, some feel the Fire may be a better value.
Amazon needs to gain ground
It's necessary for Amazon to go big with the new Fire because, at the moment, it doesn't own a huge chunk of the tablet market. Despite being pioneers of tablet computing with the first Kindle, Amazon only occupies a 6% share vs. 84% for the iPad . This is a really small portion of the market relative to the vast ecosystem Amazon has built for itself with the success of Amazon.com and the popularity of e-books.
Apple's biggest strength has been its ability to take its huge customer base and use it to support new products and updates. With the new Fire, Amazon may be able to build its share by growing its ecosystem, encouraging more Amazon customers to consider the company for its tablets.
The bottom line
The fourth quarter is always interesting for the tech industry thanks to holiday sales, and this year will be no different. If the Fire is a success, Amazon will have a great quarter as investors look to Amazon as more than just a tablet maker for bookworms. There is serious potential for the Kindle Fire HDX due to its huge processor and advantages over competing devices. While it won't be an iPad killer, it will definitely land some body blows and cracked screens.
If the Fire does well, Qualcomm could experience a boost. This will be the first big test for the new Snapdragon processor, and if it lives up to its billing, more companies will be looking toward Qualcomm for its mobile processing units. The Fire has some flaws, but for $100 less, twice the processing speed, and personal customer service, don't be surprised if you have a few people wanting it in their stockings this Christmas.
John McKenna has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Apple. The Motley Fool owns shares of Amazon.com, Apple, and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.