Will Kindle Fire force Android tab makers to cut prices?

With their me-too type of products priced almost at the same level as the iPad8217;s starting price of 499,none of them have however been able to gain any significant market share from Apple.

So far,Samsung has been seen as the most credible challenger to the iPad and some analysts suggest it could lose its No. 2 position to the eagerly anticipated Fire.

The South Korean company8217;s tablet marketing campaign has also stumbled in recent months due to Apple8217;s legal attempts to ban Samsung8217;s tablet sales in Australia,the United States and Germany,over patent infringement,among other claims.

The Kindle Fire,while lacking many of the high-tech bells and whistles common on tablets from cameras to 3G wireless connection,may sound the death knell for a raft of devices based on Google Inc8217;s Android operating system.

The pricing is critical to gain traction in the tablet market8230; Rival manufacturers have failed to attract consumers as they have matched the iPad8217;s price point without matching its content offering,said Adam Leach,an analyst at research firm Ovum.

Amazon8217;s retail-based business model allows the company to subsidize the device on the premise that consumers will buy more from Amazon,be that physical goods or its digital content.

Samsung8217;s Galaxy Tab,Sony8217;s S tablet,Motorola8217;s Zoom and many others from Acer Inc and Asustek Computer Inc all run on Android,which Amazon8217;s Fire also uses and combines with its online store.

By pricing the Fire at less than half the iPad yet stripping out costlier components and features the Internet retailer hopes to get the device into millions of consumers8217; hands and then into Amazon books,movies,music and other content.

TOUGH FOR SAMSUNG

Samsung8217;s new tablet Galaxy 10.1 is priced roughly the same as the iPad. Even at that price,a slim profit margin of around 5 per cent makes it difficult for Samsung to cut prices sharply,analysts say.

Worldwide tablet shipments will more than triple to 60 million units this year and surge to 275.3 million units by 2015,research firm IHS iSuppli forecasts.

Apple dominates the North American tablet market,with 80 per cent of the 7.5 million units shipped during the second quarter of 2011,Strategy Analytics says.

Analysts had expected Amazon8217;s tablet to be priced around 250,roughly half the price of Apple8217;s iPad,which starts at 499.

Sony vowed in January to become the world8217;s No. 2 tablet maker 8212; behind Apple 8212; by 2012 and Sony executives have since stuck to that ambitious claim.

We expect the Amazon tablet to8230; put pressure on the other non-iPad competitors as they are unlikely to be able to compete on price and value,UBS analysts said in a note.

At the 199,we believe Amazon8217;s tablet has the potential to be disruptive to the market and,in particular,the non-iPad market8230;Other tablet vendors will find it difficult to match Amazon8217;s price point.

HP8217;s firesale of its TouchPad tablet at 99 just six weeks after its launch created strong demand for its soon-to-be-killed product,a sign of just how critical prices are in the sector.