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Amazon Launches $199 Tablet

In a move that will increase competition for both tablet makers and providers of streaming video services, Amazon has launched a new $199 Kindle Fire tablet that is significantly cheaper than Apple's iPad, which has dominated the market.

The news is another sign that Amazon plans to be a major player in the streaming video market. Its previous Kindle devices dominated the e-book market but did not have a color screen needed for video delivery.

While other tablets have struggled against the iPad, in part because of the largest amount of content and apps that have been developed for the Apple iOS platform, Amazon has already amassed a huge content library of books, movies, TV shows and other content that users will be able to access on the Kindle Fire.

That will pose competitive challenges for Netflix, which has been moving to beef up its content offerings, and Apple, which remains by far the dominant provider of tablets.

Users will be able to access Netflix and other streaming content providers via Android apps on the Kindle Fire. But Amazon will be able to tightly integrate its offerings into the user interface and much better promote access to its services, which will significantly strengthen its market position.

For TV companies, the new device will provide a new platform for content distribution but could also provide additional pressure to make sure they get Android based apps into the market quicker. Currently many companies have first developed apps for iPhones and iPads because of the large number of Apple devices in the market.

The new Kindle Fire is a 7-inch tablet compared to the 10-inch iPad and it remains to be seen which size consumers will prefer.

Apple is currently taking orders for the device, which will begin shipping Nov. 15.