Amazon Launches Premium Android Tablets with Alexa+, Raises Device Prices
Amazon Unveils High-End Alexa Tablets and Shifts Strategy
By Greg Bensinger
SAN FRANCISCO, Oct 8 (Reuters) - Amazon on Thursday unveiled a slate of higher-end tablets that for the first time feature its Alexa+ voice assistant and run on Google's Android operating system, a bet that consumers will pay more for premium devices after years of focusing on the budget end of the market.
Transition from Fire OS to Android
Seattle-based Amazon had been working on the tablets under the code name Kittyhawk, as Reuters reported exclusively last year, to transition away from its more limited homegrown Fire OS operating system software, after years of gripes from consumers and app developers. Fire OS is a “forked” version of Android, with modifications to make it work like a unique operating system.
Alexa Tablets: Features and Pricing
Known as Alexa Tablets, the line features several different versions with starting prices from $230 to $500; all are made with aluminum cases, a switch from Fire tablets’ plastic.
The new tablets will cost as much as $550, a big bump from Amazon’s more recent top-of-the-line Fire HD 10 tablet which cost upwards of $180, though the company often discounted them.
The top Alexa tablet, with 128 gigabytes of memory, for $550 compares with an Apple iPad for $450 and Samsung's Galaxy tablet for $550.
Strategic Shift Under New Leadership
The product revamp marks a new strategy under devices chief Panos Panay to move upscale and away from the inexpensive gadgets Amazon sold at or near cost to hook customers into using Prime Video, Kindle, music apps and the main e-commerce website. That focus on affordability came with compromises, like lower screen quality and battery life, compared with rivals Apple and Samsung and others.
Alexa+ Integration and Subscription Requirements
Alexa+, an advanced AI-powered version of the Alexa voice assistant, will feature prominently on the devices to help perform actions or answer questions using generative AI. Accessing Alexa+ on the tablets will require a Prime membership or Alexa+ subscription, Amazon said.
Market Context and Competitive Landscape
Amazon is pushing the pricier devices as worldwide tablet sales are falling, down 12% in the second quarter from the year before to 33.6 million units, according to IDC data. The US market, which has been especially hurt by a shortage of memory chips, saw sales plunge 32% in the second quarter year over year, IDC data showed.
The Seattle company held just 1.9% of the global tablet market in this year’s second quarter, down from 8% a year earlier, according to IDC. Apple is the leader with 34%, followed by Samsung at 17.5%.
Advertising and Additional Fees
The tablet prices do not include a one-time fee customers have to pay to turn off advertising displayed on the lockscreen, though the highest-priced Alexa Tablet will not have the ads. It will require a one-time $20 fee to eliminate the ads, up from $15 for Fire OS tablets, a spokesperson said. Such ads help users “discover new content that’s relevant to their interests” and the revenue helps underwrite other innovations, the spokesperson said.
Upgrade from Fire OS
Expanded App Access and Voice AI Differentiation
With Android, Alexa Tablet customers won’t be limited to the apps offered in the Fire OS app store, disdained by developers who had to make a third version of apps offered in the Google Play and Apple stores. And the built-in Alexa+ voice AI assistant helps to differentiate the tablets from others.
Amazon's Investment in Generative AI
Amazon has spent billions overhauling Alexa to power it with generative AI and make it more capable for connected homes, shopping and accessing third-party services like Uber and Grubhub. The service, free with a Prime membership, is unprofitable.
Support for Older Devices
Prior Fire OS tablets will still work, said the spokesperson, but she did not say whether Amazon will continue to maintain the operating system or app store. Earlier this year Amazon cut off support for older Kindle models, citing software maintenance costs as a reason.
(Reporting by Greg Bensinger; Editing by Cynthia Osterman)
