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With New Kindle, Bezos Proves Ecosystems Matter More Than Hardware

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The more powerful Kindles are backed up by Amazon's wide array of services, a key factor in the crowded tablet marketplace.

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MINYANVILLE ORIGINAL Amazon (AMZN) gave would-be entrants into the red-hot e-reader segment something to think about yesterday: Your device is only as good as the services that back it up.

During a Santa Monica press conference to unveil new versions of its popular line of tablets, Amazon CEO Jeffrey Bezos said that the Kindle Fire HD sports two antennas and utilizes the 5 GHz wireless band because the more popular bands are too crowded.

But the new, more powerful Kindles are also backed up by Amazon's wide array of services, something that Bezos was sure to point out now that the tablet market is becoming crowded with new players.

Amazon will offer two versions of the Kindle Fire HD: A 7-inch screen with 16 GB will retail for $199, and an 8.9-inch screen that will sell for $299. The smaller version goes on sale later this month and its larger cousin hits Amazon.com in November.

During the media event, while Bezos demonstrated popular computer games and played high-def movies on the two new models, he said he'd envisioned creating such devices decades ago. But he was only able to bring them to market now because the technology didn't previously exist to give them the computing power they needed. (Bezos quipped that 8 GB HD tablets are dead on arrival.)

The new Kindles score one for the concept of convergence. Bezos, the Web's bookselling pioneer, moved the world one step closer to the day when everyone is connected by their all-in-one computer/e-reader/telephone. "This is a very important step for Amazon," a technology analyst for Gartner Group, Michael Gartenberg, says. "The new version of the Kindle shows that digital ecosystems are more important than devices."

Gartenberg says Amazon is putting other tablet vendors on notice because it's backed by the company's dedicated book services. Even Apple (AAPL), which has remained in a solid position because of its popular iPad, should take notice.
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