Apple, Amazon announce new gadgets

Unveiled this past week, a host of new tablets, e-readers, smartphones, and portable media players are sure to inspire gadget lust. Amazon announced a new line of Kindles and Apple revealed the iPhone 5 and refreshed its line of iPods.

The two companies merit comparison, due not only to the timing of their product announcements and competition in the marketplace, but also because of the contrast between their business strategies.

Amazon’s Kindle Fire, released last year, has been the only non-iPad tablet to gain significant market share.  The majority of tech reviews, however, opined that the 7-inch device skimped on quality to hit a $200 price point.

Google’s Nexus 7, released over the summer, garnered praise for its build quality and software while matching the Fire’s price and besting its screen resolution, setting a new standard for 7-inch tablets. Amazon responded last Thursday by expanding the Fire family with two new high resolution ‘HD’ 7- and 8.9-inch models joining last year’s 7-inch standard-definition model with updated specifications, now discounted to $159.

The HD 7-inch model matches the Nexus 7’s 1280 by 800 pixel resolution while the the 8.9 packs a full HD (1920 by 1080) display. They sport panel densities of 216 and 254 pixels per inch (ppi), respectively, which approach the iPad’s 264 ppi “retina” display.

Software-wise, they feature Amazon’s proprietary OS, a fork of Android 4.0, with Amazon-specific user-interface, browser, email client and app store replacing Google’s offerings. The Fire provides an integrated storefront for Amazon’s video streaming, music, and e-book services. Amazon also announced the Kindle Paperwhite, updating last year’s model with a higher resolution 212 ppi display with built-in front-lighting for reading in the dark. If Amazon’s new devices are any indication, the readily discernible pixel is going extinct (in the mobile space, at least), and that’s a good thing.

Apple’s iPhone 5 has been anticipated since last year’s 4S launch. Even though Apple chief Tim Cook claimed that they would “double down on security,” the anticipation has been such that Apple was not able to keep it under wraps. Leaked components and photos revealed a new shape and dock connector.

The iPhone 5 is thinner and lighter than its predecessors and features a taller screen, increasing its vertical resolution from 960 to 1136 pixels. The aspect ratio of the screen has gone from 3:2 to 16:9, a common ratio for HDTVs and laptops, allowing a better fit for video and a fifth row of apps on the home screen.

The new phone also features a faster processor and improved camera. The updated dock connector, dubbed ‘Lightning’, is smaller than the legacy 30-pin connector, about the size of micro-usb. Apple will sell adapters to interface with legacy accessories.

The iPhone 5 also features, the latest version of iOS, LTE connectivity, and updated earbuds. Apple also announced a refreshed iPod family and previewed an iTunes redesign. Reception to Apple’s iPhone announcements, however, has been increasingly negative.

Many were unimpressed or even disappointed in last year’s iPhone 4S because most of improvements were under-the-hood like a faster processor and improved camera while the design wasn’t changed. A survey of comment threads in response to this year’s event revealed a similar response, with many claiming that Apple is now playing catch-up to Android.

Regardless of how impressive their new devices are, it may be impossible for Apple to meet their atmospheric hype. In addition, the rumor mill which accurately predicted most of Apple’s Wednesday announcements is still churning about a potential smaller iPad coming next month to compete with Amazon, Google and Barnes & Noble’s offerings, among others.

Apple is known for their slick press events, this year being no exception. Amazon’s event, however, also impressed. John Gruber of Daring Fireball wrote, “Amazon is, to my eyes, the only company playing in the same league as Apple.”

He praised Amazon chief Jeff Bezos’ presentation, calling it “simple, cohesive and true.”  Gruber noted that Amazon played well to their audience of tech reporters, highlighting their attention to detail and quality and distinguishing their business model from Apple’s.

Amazon sells their devices with slim profit margins, making money on e-book, app, video and music purchases, as well as Prime subscriptions. Amazon also subsidizes their devices with “Special Offers” screensaver and homescreen ads, which can be removed for an additional fee.

Apple, on the other hand, makes large profit margins on their devices, luring consumers with their app store, stellar marketing and reputation for quality. Apple’s strategy has made them the most valuable company in history and captured the cultural zeitgeist.

If Amazon can create compelling, high quality devices while selling them at competitive price points, they may capture some market share from the Cupertino tech giant.

The Kindle 7 HD will retail for $199, with the 8.9-inch model at $299, and the 8.9-inch with 4G for $499. The Kindle Paperwhite will retail for $119. The iPhone 5 16 GB, 32 GB and 64 GB models will retail for a MSRP of $199, $299, $399, respectively.