* Alexa Tablets start at $230 and reach $550 depending on
model
* Users need Prime or Alexa+ membership to access generative
AI assistant on tablets
* Amazon's held just 1.9% of global tablet market in second
quarter, IDC data shows
By Greg Bensinger
SAN FRANCISCO, Oct 8 (Reuters) - Amazon AMZN.O on
Thursday unveiled a slate of higher-end tablets that for the
first time feature its Alexa+ voice assistant and run on
Google's Android operating system, a bet that consumers will pay
more for premium devices after years of focusing on the budget
end of the market.
Seattle-based Amazon had been working on the tablets under
the code name Kittyhawk, as Reuters reported exclusively last
year, to transition away from its more limited homegrown Fire OS
operating system software, after years of gripes from consumers
and app developers. Fire OS is a “forked” version of Android,
with modifications to make it work like a unique operating
system.
Known as Alexa Tablets, the line features several different
versions with starting prices from $230 to $500; all are made
with aluminum cases, a switch from Fire tablets’ plastic.
The new tablets will cost as much as $550, a big bump from
Amazon’s more recent top-of-the-line Fire HD 10 tablet which
cost upwards of $180, though the company often discounted them.
The top Alexa tablet, with 128 gigabytes of memory, for
$550 compares with an Apple AAPL.O iPad for $450 and Samsung's
005930.KS Galaxy tablet for $550.
The product revamp marks a new strategy under devices chief
Panos Panay to move upscale and away from the inexpensive
gadgets Amazon sold at or near cost to hook customers into using
Prime Video, Kindle, music apps and the main e-commerce website.
That focus on affordability came with compromises, like lower
screen quality and battery life, compared with rivals Apple
AAPL.O and Samsung 005930.KS and others.
Alexa+, an advanced AI-powered version of the Alexa voice
assistant, will feature prominently on the devices to
help perform actions or answer questions using generative AI.
Accessing Alexa+ on the tablets will require a Prime membership
or Alexa+ subscription, Amazon said.
Amazon is pushing the pricier devices as worldwide tablet
sales are falling, down 12% in the second quarter from the year
before to 33.6 million units, according to IDC data. The US
market, which has been especially hurt by a shortage of memory
chips, saw sales plunge 32% in the second quarter year over
year, IDC data showed.
The Seattle company held just 1.9% of the global tablet
market in this year’s second quarter, down from 8% a year
earlier, according to IDC. Apple is the leader with 34%,
followed by Samsung at 17.5%.
The tablet prices do not include a one-time fee customers
have to pay to turn off advertising displayed on the lockscreen,
though the highest-priced Alexa Tablet will not have the ads. It
will require a one-time $20 fee to eliminate the ads, up from
$15 for Fire OS tablets, a spokesperson said. Such ads help
users “discover new content that’s relevant to their interests”
and the revenue helps underwrite other innovations, the
spokesperson said.
UPGRADE FROM FIRE OS
With Android, Alexa Tablet customers won’t be limited to the
apps offered in the Fire OS app store, disdained by developers
who had to make a third version of apps offered in the Google
Play and Apple stores. And the built-in Alexa+ voice AI
assistant helps to differentiate the tablets from others.
Amazon has spent billions overhauling Alexa to power it with
generative AI and make it more capable for connected homes,
shopping and accessing third-party services like Uber and
Grubhub. The service, free with a Prime membership, is
unprofitable.
Prior Fire OS tablets will still work, said the
spokesperson, but she did not say whether Amazon will continue
to maintain the operating system or app store. Earlier this year
Amazon cut off support for older Kindle models, citing software
maintenance costs as a reason.
(Reporting by Greg Bensinger; Editing by Cynthia Osterman)
((greg.bensinger@thomsonreuters.com))