Amazon shakes up pay TV business with $199 Kindle Fire tablet

Undercutting the price of Apple's (Nasdaq: AAPL) least expensive iPad by more than $300, Amazon (Nasdaq: AMZN) took the wraps off of a $199 tablet called the Kindle Fire Wednesday.

Amazon Kindle Fire

Amazon's newly announced Kindle Fire. Click here to view the first commercial.

Containing a 7-inch full color LCD touchscreen display, the Kindle offers Web surfers access to more than 100,000 movies and TV shows from the Amazon Instant Video library. Amazon says it'll give Amazon Prime customers--who pay $79 annually to get free shipping and handling on orders--free access to 11,000 movies and TV shows through Kindle Fire, and it's also offering non-subscribers free Amazon Prime access for one month if they buy a Kindle Fire.

The Kindle Fire allows users to access content via WiFi connections, but owners won't be able to access mobile 3G or 4G networks with the device. 

Amazon began taking orders for Kindle Fire Wednesday, but it won't begin shipping the tablet until Nov. 15. With its low cost, Amazon could attract millions of consumers to the tablet that have been loath to shell out $500 or more for Apple's iPad. Forrester Research predicted in August that Amazon could sell 3 million to 5 million tablets by the end of 2011.

Cable MSOs and satellite distributors have been enamored with Apple's iPad, with Comcast (Nasdaq: CMCSA), Cablevision (NYSE: CVC), Verizon (NYSE: VZ), AT&T (NYSE: T), DirecTV (Nasdaq: DTV) and Dish Network (Nasdaq: DISH) developing apps for the iPad that allow subscribers to watch video on the tablets and use the devices as a remote control. Amazon didn't announce any partnerships with pay TV distributors on Wednesday. It will be interesting to see if distributors attempt to use the Kindle Fire as a way to deliver multiplatform programming to subscribers, and to let pay TV viewers use the device to access content from their cable subscriptions.

Kindle Fire was one of several new products Amazon unveiled Wednesday. It also debuted a $79 Kindle e-reader, a $99 Kindle Touch and a $149 Kindle Touch 3G.

For more:
- see the news release

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