Amazon turns up the heat with the new Kindle Fire

New York:

Amazon’s shares soared to a record high immediately after the online retailer unveiled the latest versions of its popular Kindle tablet and raised the pressure on rival Apple by pricing the improved products competitively.

Investors appeared to react positively to the new products and sent shares in the company up 4.1 per cent to $258.20 (Dh948.12) over the week.

Analysts highlighted the company’s efforts to increase revenues by selling content on its premium subscription service, Prime, by pricing the new line of Kindle tablets below those set by Apple for its iPad tablet.

Edward Williams, analyst at BMO Capital Markets, said: “In typical Amazon fashion, the price points were kept low, suggesting that the company is poised to be profitable with the device as it is used [and new content is consumed] rather than when the hardware is sold.”

Apple investors, however, remained focused on expectations that the consumer product and technology company would unveil the latest version of the iPhone next week.

Apple rose 2.3 per cent to $680.28 (Dh2,498) and were set to finish the week at their own all-time high.

Earlier in the week, Amazon said it agreed to a deal with Epix, a TV channel with programming that includes movies such as The Hunger Games, to broadcast its content on Prime.

The news took a toll on shares of Netflix, the home DVD and online streaming company, which fell heavily at the start of the week.

Williams warned that the continued spending on new initiatives by Amazon, in highly competitive markets such as tablets and content streaming, would keep pressure on the company’s margins.