NEW YORK (
Kindle Fire is further proof the e-commerce giant will purchase
, according to analysts.
Amazon launched the tablet at a conference in New York on Wednesday, creating a stir with its low price of $199. The device is being used as a way for Amazon to market its digital content, include its Prime Instant Video service.
Amazon is offering a 30-day free trial to Amazon Prime to those who purchase the device. The Amazon Prime membership, which typically costs $79 a year, provides free shipping on all Amazon purchases and access to more than 11,000 streaming videos.
The company has been beefing up its streaming content library, most recently striking a deal with Fox for its movies and television shows.
While Wedbush analyst Michael Pachter said he doesn't see the tablet as a huge threat to Netflix, he does believe it makes an acquisition of the company by Amazon more likely.
"In our view, Amazon has always wanted to be in the streaming business, and has been constrained from buying Netflix due to tax considerations," Pachter wrote in a note last week.
"Netflix streaming has current content deals that provide it with access to movie content during the premium cable TV window, and Amazon has the financial resources to secure additional streaming rights, including Starz content," Pachter wrote. "Netflix's financial flexibility is quite limited, while Amazon's is virtually unlimited."
Collins Stewart analyst Mayuresh Masurekar agreed.
"We believe the tablet launch and the integration of Amazon's e-books, digital music and digital movie offerings with the tablet indicate accelerating pace of innovation at Amazon to stay ahead of the secular shift to digital format. We believe there is a high likelihood that Amazon will: 1) launch a 10-inch tablet priced below $300 in early 2012, and 2) purchase the streaming business of Netflix," the analyst said.
-- Reported by Jeanine Poggi in New York.
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