Amazon just agreed to a tablet price war with Apple and Google; this is going to get ugly

Amazon just agreed to a tablet price war with Apple and Google; this is going to get ugly

Amazon today made a slew of tablet announcements, offering devices ranging from a mere $69 to more than quintuple that at $499. If you want a quick rundown of all that’s new, check out our post here: Everything you need to know about today’s Amazon Kindle event in LA.

Are you up-to-date now? Good. I want to go over the price war Amazon has just agreed to wage with Apple and Google. Amazon arguably first started it by debuting the 7-inch Kindle Fire back in November 2011 at a ridiculously low price point of $199.

Amazon made its intentions clear: it would let Apple rule the high-end market with the iPad, which is priced at $499 and up (the iPad 2 is $399), and would focus on commanding the low-end. Unfortunately for Amazon, Google wasn’t having any of that, and the search giant announced the Nexus 7, also a 7″ tablet, and also for $199. On top of that, the Nexus 7 was superior to the original Kindle Fire, mainly because it was released more than six months later.

This left Amazon with a big choice to make: continue fighting the price war with Google, take the fight to Apple, or try to fight both Google and Apple? It’s obvious the company went with the last option. Last week, after selling 5 million Kindle Fires, the company declared the device “sold out” and then moved to wow the world today with its new Kindle lineup.

Yet Amazon did more than that. The online retail giant just demonstrated it isn’t happy with just offering an eBook reader and a slightly better tablet. The company wants to have it all.

It’s clear Amazon wants to take on Google because it’s offering three products very closely priced to the Nexus 7: the original Fire model for $159, the 7″ Kindle Fire HD for $199, and the 8.9″ Kindle Fire HD for $299.

While watching today’s news, I thought that was it. Amazon was taking on Google. Sure, the pricier of the three new tablets would leave the door open for the rumored iPad Mini, which some believe will be less than $499, but still, Amazon was still focusing on the low-end.

Not so. Amazon also announced the 8.9″ Kindle Fire HD 4G LTE at $499. In my eyes, that’s not about the iPad mini or the Nexus 7. That’s aimed squarely at the iPad. The size and price tag give it away: two 8.9″ tablets, one for $299 and one for $499.

Talk about a crowded market. The 3G Nexus 7 and the iPad Mini aren’t even out yet. Oh, and I haven’t bothered to say anything about the upcoming Microsoft Surface tablets, which have yet to be officially priced.

Look at the two tablets Amazon compared its devices to. This is no coincidence:

Remember the rumor that Amazon was going to release two 7″ tablets today? Yeah, forget about it. Those were likely fake sources planted on purpose to make today’s announcement even more surprising.

Well Amazon, mission accomplished. Taking on Google in the low-end market, a market that you first created, is one thing. Taking on both Apple and Google, which both have deeper pockets than you by a long shot, is something else.

Good luck.

Image credit: stock.xchng

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