Amazon Heats Up Tablet Market With a Handful of New Kindles

Amazon has invited us to join them for a press conference this morning at Barker Hangar in Santa Monica, where it is expected to release a family of new Kindle devices.

CEO Jeff Bezos should take the stage shortly after 10:30 am PT to begin the presentation.

Speculation is running wild about what Amazon plans to announce. Rumors range from an updated e-reader to new color tablets that rival the iPad to a video box for the living room. Some speculate that Amazon may even unveil the smartphone it is believed to be developing.

What we know for sure is that the retailer will be showing off a new line of e-readers, including one with an electronic ink display that lights up to make reading easy in the dark. Amazon will also announce an update to the year-old Kindle Fire tablet, the details of which are entirely unknown.

Regardless, the event will be a defining moment for Amazon, which is still primarily known for shipping goods in the mail, and for selling music, video and books electronically. 

By hosting the event today, Amazon gets a week in the spotlight before Apple debuts its next-generation iPhone..

10:13 am: Taking our seats and getting ready for the announcements. First celeb sighting was Jon Rubinstein, current Amazon board member and former Apple and Palm exec.

Ina Fried and I are here to give you all of the updates as they happen.

10:25 am: It has been almost five years since the original Kindle came out, and a year since the Kindle Fire was announced onstage. The devices are getting progressively smaller, sleeker and more functional. If history is any indication, we’ll see more progress on both of those fronts.

The presentation is expected to begin at 10:30. Right now, we’re just sitting back under the glow of blue lights.

10:36 am: While you’re waiting: Amazon jumped the gun yesterday and provided a glimpse of some of its new devices in a TV commercial that ran during the NFL season opener.

Interestingly, the company’s hardware inspiration comes out of Labs126, its research and development facility in Cupertino, Calif. That’s essentially the same neighborhood as another large phone and tablet maker.

10:42 am: Lights just went out, and we are seeing the commercial that aired last night.

And, Jeff Bezos, founder and CEO, is now onstage, saying thank you for joining us in Santa Monica.

“I hope you enjoyed the new TV spot, and I hope it conveys the spirit of Amazon. We love to invent. We love to pioneer. We even like going down alleys that are blind alleys.”

Bezos is now reading emails that he gets from customers. This one is from Ryan, about how much he loves Amazon Prime, the $79 subscription service that provides free two-day shipping and access to video. “You keep adding more, but not charging more. So, thanks again for all the additions.”

Back to Bezos: “Last year, there were more than two dozen Android tablets launched, and no one bought them. Why? Because they are gadgets, and people don’t want gadgets anymore. They want services.”

“Kindle Fire is a service.”

10:47 am: He’s going on about all the services they offer, like the Kindle Lending Library, which allows you to borrow books for free.

“Hardware is a critical part of the service; it’s absolutely essential.”

He’s showing a chart for Amazon book sales over time, versus Amazon Kindle book sales. The Kindle book-sales line is like a hockey stick, versus a much less vertical, but still rising, line for the company’s original book business.

10:50 am: Amazon is playing a video, showing off the new Paperwhite device, using first-person stories from customers.

Announcing Kindle Paperwhite: A smaller, sleeker-looking cousin to the Kindle Touch.

Bezos lists the features: 25 percent more contrast, 212 pixels per inch, and 62 percent more pixels. The device has a new capacitive touch (old models had infrared). Essentially, there’s a ton of technology packed into that very thin device.

10:56 am: Bezos is demonstrating all the new features, which Ina has written about here. One cool one is that in the bottom left-hand corner, you can see how much time is left before the end of the chapter. The minutes are calculated based on your own reading speed.

Most important of all, the price: $119. Order today, and it ships Oct. 1. With 3G, it’s $179, and that also ships Oct. 1.

Bezos said they are keeping the old Kindle Touch, which was $79. Now they are going to price it at $69, and it ships Sept. 14.

Bezos: “People are going to love these.”

So, to recap, the new Paperwhite at $119 or $179, and the new Kindle Touch at $69.

I’m assuming that all of these will come with “offers,” but that hasn’t been mentioned yet. But customers are quite willing to sign up for offers in exchange for a cheaper device.

(Here’s more on the technology behind the Kindle Paperwhite.)

11:03 am: Bezos says that their publishing group is working: “Could we invent something to help, another route to find readers? It’s called Kindle Direct Publishing. (Authors) publish for free, they keep their rights, and they receive way more royalties.”

Another video with authors describing their experiences. Lots of stories about being rejected, and about how traditional publishing houses don’t gamble on new authors.

A huge round of applause for all the KDP authors in the audience today.

11:07 am: A funny thing about media, Bezos says. Magazines work, and books work, but what about stuff in the middle? He says that works, too, with the invention of Kindle singles: 3.5 million have sold, 35 reached have reached the Kindle Top 50, from authors like Stephen King. Now there are Kindle Serials, which will include paying once to get all future episodes as authors write them.

Amazon is starting with eight titles, like “Downward Facing Death,” a yoga-themed murder mystery. Bezos jokes, “I think that will be a whole new genre.”

To kick off the program, they’ll be reissuing two Dickens books in the same serial format in which they were originally published.

11:11 am: Talk turning to Kindle Fire.

11:11 am: Bezos says: We are keeping the Fire, doubling the RAM, making it 40 percent faster, plus adding longer battery life. It’s $159, and ships Sept. 14. That’s down from the $199 original price.

This year, we want to have the best tablet at any price, says Bezos, emphasizing “any.”

Announcing the Kindle Fire HD in two sizes.

“We decided to go big!” Bezos says. “Our large display tablet is an 8.9-inch display. It’s stunning.”

A true wide polarizing filter, which is more expensive, but totally worth it, he says.

There’s 25 percent less glare because of some fancy laminated touch sensor, which was more expensive, “but totally worth it.”

Because an HD tablet requires larger-sized files, you have to seek balance. “You want balance, proportion. It all has to work together cohesively.”

Bezos says it’s going to be smooth and snappy because of great processing power. What about good sound? They’ve added dual stereo speakers. “Is it harder? You bet.”

This is the first tablet with Dolby Digital Plus. It’s the same one in high-end living-room systems.

No one likes to wait for stuff as it buffers. Wi-Fi is crucial, and other tablet makers aren’t paying enough attention to Wi-Fi.

11:18 am: The 2.4 GHz band has been around forever, and it’s gotten incredibly crowded. Amazon has added 5GHz, which is much cleaner because it’s not crowded with baby monitors and cordless phones. They’ve also added two antennas.

There’s one more really state-of-the art technology. It’s MIMO (multiple-input and multiple-output). The example: If you are shouting at a friend in a mountain pass, it’s difficult because of the echo. What MIMO does, you can turn the echoes upside down, and turn it into an opportunity.

We are talking about really big nerd stuff now, oh boy!

The summary: Kindle Fire HD will be the first tablet to have MIMO.

He’s comparing it to new iPad and the Nexus 7. The iPad does have two bands for Wi-Fi.

That’s 41 percent faster Wi-Fi, and 54 percent faster than the Nexus 7. If you are going to have really big HD content, you have to have this, Bezos says.

Bezos is now addressing storage. For an HD device, eight gigabytes is dead on arrival. “We are starting Kindle Fire HD at 8GB.”

But invention doesn’t stop at the hardware, he says. Now we are getting to content: They’ve added thousands of audiobooks.

Now there’s Whispersync for voice, which allows you to start a book on one device, and then pick it up where you left off on another.

11:27 am: Going to require some new rights from publishers, I think.

Samuel L. Jackson is reading an audio book to the audience to show off bimodal reading. It’s sort of like karaoke; you listen to the audiobook while following along in the book.

Another new feature: X-Ray for movies. Something that would have been impossible without IMDb as part of the Amazon family.

And games: I’m amazed by how many games we’ve sold on the Kindle Fire. There’s one very annoying thing about games. You get 30 levels, and then, for whatever reason, you have to reinstall, and you lose all your levels. “We thought we’d solve that with Whispersync for games.”

Connectivity: We put a dedicated team on Microsoft Exchange, and we’ve built the best exchange integration of any tablet. Facebook built a custom app for us. Skype built a custom app to take advantage of the front-facing camera.

11:30 am: Bezos said he has four kids, and parents have the strange notion that they should do something else, like go outside. He’s talking about the negotiation. To help, they’ve built Kindle FreeTime. You can set separate time limits for different things. Unlimited time for books, but 30 minutes for TV, and 30 minutes for apps.

Demo time!

Enough talking. Bezos is showing off how fast and smooth it is to scroll left and right, past images of books, albums, magazines and apps.

The user interface doesn’t look at all like the original Fire, and definitely nothing like Android. He’s showing off “The Hunger Games” movie, and checking out the X-Ray feature to find out more about Jennifer Lawrence, who plays Katniss Everdeen. Did you know she was also in “X-Men” and “Winter’s Bone”?

A short music demo lets us hear the quality of the audio. Sounds great through the speakers here.

Bezos is now showing off Activision’s Skylanders, which he says Amazon worked closely with Activision on.

He taps on a treasure chest in the game, and it’s for a physical toy — delivered by Amazon — but he is also getting a virtual character in the game.

11:41 am: While not very sexy-sounding, fast Wi-Fi is super important. Original Kindle owners love the convenience of 3G, and yet there’s really no great way of packaging 3G together with tablets for large files, like movies and music. Perhaps providing very good Wi-Fi will be a way that Amazon will continue to deliver the best experience possible.

Now for the most important part of the announcement: The price. The seven-inch with 16GB HD tablet will cost $199. It ships Sept. 14.

The 8.9-inch device is $299. That one will ship in November.

Bezos addresses the elephant in the room. How can they offer these prices when Apple charges so much more?

He says the Amazon doctrine calls for customers to get the best price possible.

“How does this philosophy apply to hardware devices? It’s simple: We want to make money when people use our devices, not when they buy our devices. That is better alignment. If someone buys one of our devices and puts it in a desk drawer and doesn’t use it, we don’t deserve to make money.

“For example, we don’t need you to be on the upgrade treadmill. We are happy that people are still using Kindle 1s that are five years old. That’s good for us.”

11:50 am: Bezos says that the most popular price point for a tablet is $499. He says: “There’s so much room. What else could we add?”

The only thing that could justify that price would be the ultimate tablet feature: 4G/LTE wireless.

This is an unbelievable amount of work. The modems for 4G would not fit in our 8.8mm package, so we had to engineer our own modems. It’s dual-antenna, all 10 bands.

Kindle Fire HD with 4G LTE is only $499 with 32GB. But what about the data plan?

For 150MB of data access a month from AT&T, and 20GB of cloud storage from Amazon, it costs $50 a year.

It ships Nov. 20, and you can order today.

We aren’t building the best tablet at a certain price; we just built the best tablet at any price. We want to have the best hardware, the best content, the best interoperability and the best customer service.

11:55 am: That’s it for the formal presentation. Just to recap, there was no phone, no big, splashy content deals — as some thought, based on the L.A. location.

The focus was all on the Kindle Fire HD. It’s coming in two sizes, and is a much more refined product compared to the one rushed out last year. What’s more, it starts to solve connectivity issues. People want the device and the access without the big data costs.

Amazon is clearly willing to sacrifice its margins for providing that. In return, it is betting that it will see more usage, which is what it saw with the original Kindle and how much more customers read when they had constant access to more books.

12:00 pm: That’s it for the liveblog. Ina and I are now heading out to get our hands on the products, so stay tuned for more coverage.

Update: Here’s Ina and the Wall Street Journal’s Greg Bensinger going over the highlights of the event:

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work