Amazon's Response to the Nexus 7 and the 7-Inch iPad Lands in Two Weeks

A cheaper Kindle Fire 2, a smartphone, a 10-inch tablet, they're all possibilities

Amazon has announced that it's holding an event on September 6th. It didn't say what the event is about, but it's not that hard to guess. Even if it were hard, it wouldn't stop anyone. The event will be about the Kindle, new ereaders are the safest bet.

Amazon may also be unveiling a predecessor to the highly popular Kindle Fire 2, maybe a 10-inch model. A less safe bet would be an Amazon-branded smartphone.

A tablet makes sense for Amazon, from a content perspective, a phone less so. For one, tablets are great for media consumption and movies, music and ebooks are a big chunk of Amazon's business.

But an even bigger chunk is the actual store. People do buy stuff with their phones and more often look for stuff to buy, but this is mostly for local products, things that are in the vicinity. Online shopping is something more suited to tablets.

That's not to say there isn't value in an Amazon phone and that the company isn't thinking about it, it's just that it makes less sense, especially when the tablet market is so competitive.

And this brings us to the Kindle Fire. It was quite a success last year for a very simple reason, it was the first cheap tablet worth buying and Amazon pulled all of its marketing muscle to push the tablet.

But in less than a year, the Kindle Fire is not only obsolete from a hardware point of view, the price is no longer that attractive since Google is selling the Nexus 7 at the same price point. From the looks of it, the Nexus 7 has been quite a success, Google is having trouble keeping it in stock.

But there's an even bigger threat than the Nexus 7, a threat to the Nexus 7 too in fact, the heavily speculated 7-inch iPad. There's been too much smoke for it to be no fire, a smaller iPad is coming. Depending on its price, it's going to be a big problem for Amazon and Google. Even at $300, EUR240, many would choose the iPad over the $200, EUR160 Nexus 7 and Kindle Fire.

Amazon knows this obviously, so it's going to be interesting to see what it comes up with. An updated, quad-core tablet with a better screen at the same price point would counter the Nexus 7, but not the iPad. A cheap 10-inch model could get some traction as it seems Android tablet makers have given up on that size.

Amazon could also continue to sell the first-generation Kindle Fire at a lower price point or introduce a new tablet at below $200. One subsidized by ads would be one way to do it. But there's only so much you can cut, the cheapest Kindle ereader is still $109, EUR87 without offers.

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