OS ANGELES (AP) - Amazon.com Inc. is expected
to unveil a new Kindle Fire on Thursday as it seeks to take a bigger
bite of the tablet computer market and boost sales of digital goods like
e-books and movies.
The announcement at a
former airplane hangar in Santa Monica, Calif., will feature CEO Jeff
Bezos, who announced the first $199 Kindle Fire in New York less than a
year ago.
In the nine months since it
began selling in November, Kindle Fire has captured 22 percent of
tablet sales in the U.S., Amazon said last week. The company also said
it sold out of the devices, which suggests that Amazon halted production
in preparation for a new model.
Although it didn't divulge
actual sales figures, analyst Anthony DiClemente with Barclays Capital
estimates that Amazon sold 7 million tablets combined from November
through the end of June.
Its sales amounted to just 5
percent of the global market in the second quarter, far smaller than
the 68 percent market share for Apple's iPad, and behind the 10 percent
share for Samsung's Galaxy Tab, he said.
Apple sold 17 million iPads in the April-June period alone, and more than 84 million since its debut in 2010.
Amazon has pursued the
strategy of selling lower-priced tablets at razor-thin, if any, profit
margins in order to boost sales of digital items from its online store.
Its Kindle Fire is half the price of Apple's cheapest iPad, which sells
for $399. It also has a smaller screen, lacks a camera and only connects
to the Internet over Wi-Fi.
A newer model might resolve
some of these shortcomings. Amazon is also expected to offer a new
lineup of Kindle e-readers, which have screens that render images and
text in black and white and sell for as little as $79.
Amazon is facing tougher competition.
In July, Google Inc. began
shipping its $199 Nexus 7, a tablet that is about the same size as
Kindle Fire but boasts a better quad-core processor, compared to Kindle
Fire's dual core, a camera and an updated version of the Android
operating system.
Microsoft Corp. will start
selling its Surface tablet, which has a screen that is 10.6-inches
diagonally, in October with prices that are expected to be more in line
with the iPad.
There is also speculation
that Apple may also unveil a smaller iPad at an event in San Francisco
next Wednesday that could reduce the price gap between it and other
offerings.
