Amazon Fire will burn Apple, say analysts

Aggressively priced device will become "strong number two" behind iPad, says Context

Analysts have hailed the Amazon Fire as the first tablet able to challenge the dominance of Apple's iPad.

The online retailer has priced its first multimedia tablet at $199 (£127), $300 cheaper than Apple's entry-level iPad 2.

Pitched at consumers – particularly those who already own a Kindle – the 413g device has a 7in in-plane switching, ultra-wide display with a resolution of 169 pixels per inch.

Salman Chaudhry, mobile computing analyst at research house Context, argued the device will become a "strong number two" behind Apple.

"Non-Apple vendors will see this as a challenge and we would expect price cuts and some products pulling out of the market," he said.

Although evidence to date suggests users prefer larger-format devices, Chaudhry said the Fire's 7in display would tap into the Kindle-installed base. Its portability will be another selling point, while the price is a "brazen attempt to win market share", he added.

"Contrary to [what some analysts predict], this will be a direct competitor to the iPad, and will eat away at market share," Chaudhry said.

Ovum analyst Adam Leach agreed. "We believe that the launch of an Amazon tablet will significantly boost the market and inject a much-needed competitor to Apple's iPad," he said.

"The device will lift currently sluggish shipments of Android-based tablets, helping them to grow from five million units by the end of 2011 to an expected 89 million units by 2016."

Amazon founder and chief executive Jeff Bezos said at the New York launch: "This is unbelievable value. We are building premium products at non-premium prices. We are determined to do that."