Amazon's rumored Android tablet will support the retailer's video streaming system, currently offered free to Amazon Prime customers, according to analysts Detwiler Fenton. In a new research note, they claim that the 10-inch "Hollywood" tablet rumored earlier this year will be sold with a "promotional video service offering"; they also concur on the LCD display and "more robust applications process" than the smaller color Kindle - which we've heard codenamed as "Coyote" and as using a 7-inch panel - also believed to be in the works.
The analysts expect pricing around $399 for Hollywood, undercutting previous leaks suggesting $449. Coyote is believed to around the $349 mark. Amazon is yet to even acknowledge the existence of either slate, but the 7-inch model is tipped to use NVIDIA's Tegra 2 chipset, while the 10-inch version will, it's rumored, use the new quad-core NVIDIA Kal-El processor, launching later in 2011.
There's still confusion over whether Amazon's two models will be color ereaders or true tablets, or some hybrid of the both. What Detwiler Fenton does seem convinced about is that the combination of Amazon slates and Apple's iPad makes for bad news for rivals like Motorola and RIM. They're each only expected to shift a million units a year.
We hear that Amazon (AMZN) is prepping a new color Kindle (code named “Hollywood”) capable of streaming video and to be sold with a promotional video service offering. The device is expected to incorporate a 10” color screen and have a more robust applications processor than that expected for the smaller color Kindles AMZN is also expected to launch for the holiday season. It is particularly interesting to note that AMZN is expected to include its movie service for free for an unspecified amount of time to buyers of the device. This is the same movie service AMZN already offers for free to its Prime customers. We expect pricing will be in the $399 range in order to create enough of a pricing differential between it and the iPad.
As we have written previously, color eReaders in our opinion will take the majority of the tablet market share beneath the iPad because of price and content advantages (see 3/15/11 DF note: AMZN: Filling the low end tablet niche). The remaining niche of tablets (perhaps 5MM-10MM total units) will be fought over by a growing number of vendors including the Chinese OEMs offering $300 wholesale costs to the carriers. This would appear to put further pressure on premium priced tablet vendors Motorola (MMI) and RIM (RIMM), each of whom we expect will only sell somewhere in the 1MM unit range in 2011.