Amazon Stays True to Profit Model; Peculiar Showcase Tablet Prior to FCC Approval

by Holly Shoemaker

As expected, Amazon announced its new Kindle lineup on Thursday. The standout item, designed to compete with Apple's iPads, but at a lower price point, is the Kindle Fire HD 8.9" 4G LTE Wireless for $499. Amazon expects the item to ship on November 20, 2012. However, there is one issue with the device – it has yet to receive Federal Communications Commission (FCC) approval.

Potential Roadblock?

I received the email from Amazon shortly after the company’s announcement on Thursday. The email said the following, “The 4G device has not been authorized as required by the FCC. This device is not, and may not be, offered for sale or lease, or sold or leased, until authorization is obtained.”

The FCC must approve tablets and other devices before companies start selling them. The FCC checks to ensure electronics do not interfere with signals and that they adhere to safety standards. Amazon expects to receive approval by the November 20, 2012 shipping date, but its move to announce a non-approved tablet seems unusual. At the same time, the company clearly has faith in its direction and expects to receive the required approval in time.

My Additional Findings

Amazon has once again updated its “Compare Kindles” section and the Kindle Fire HD is now available for $199 with16 GB of storage, and the tablet will start shipping on September 14, 2012. The Kindle Fire has a list price of $159, which will also ship on September 14, 2012.

e-Readers Not Forgotten

Amazon also introduced the Kindle Paperwhite, showing consumers the company still believes in its e-readers. E-readers still provide a good choice for those mainly interested in online books.

Concluding Thoughts

Amazon designed the Kindle brand for expansion. Its ability to offer different price points depending on a user’s needs and budget should appeal to a larger consumer base. While that in itself differentiates Amazon from Apple, Amazon has remained true to its profit model. While Apple makes more money off its devices, Amazon remains focused on content and accessories, showing that it understands the company’s revenue stream. Owning a device is only the start – customers need to build libraries, stream video and download apps, to name a few, to truly get the most out of owning a tablet.