Amazon has entered into Apple’s territory with its new Kindle Fire. This Android- based media tablet delivers digital media from the Amazon server right to its users. The new Kindle Fire is now the top selling electronics item on Amazon. One of the main marketing points of the Kindle Fire is its unbeatable price of 199$. Comparing this to Apple’s $499 iPad, this seems like a great deal. At $199, it is very easy to see why this Android is so desirable. It has a multi- touch display, a faster new web browser called Silk, and easy access to Amazon content such as Instant Videos, MP3 music downloads, and applications.

However, there are many differences between the iPad and the Fire that account for this price variance. There are only 15 percent of the number of apps available for the Fire compared to the iPad and also does not offer a 3G service, only WiFi.  Also, there is not a lot of memory space (only 8 GB) which means you will have to be somewhat selective of what you save on your Fire.

“There are two types of companies: those that work hard to charge customers more, and those that work hard to charge customers less. Both approaches can work. We are firmly in the second camp.” Says Jeff Bezos.

It is important to realize that the Kindle is not meant to necessarily compete with the iPad, but rather Amazon is creating its own market for a new, low cost, high quality tablet. Amazon is doing what it does best and using their known strengths of price, convenience, and content.  The Kindle Fire probably will not affect the sales of the iPad much, but Samsung, Motorola, and others will take a hit. “They don’t have the content and services that Amazon has to recoup what they don’t make on hardware sales. It creates a real dilemma for them”.

Google Inc, in another spending spree, is now buying Motorola Mobility Holdings Inc, the phone hardware maker for $12.5 billion. In the company’s largest acquisition yet, Google Inc now has the means to compete against rival Apple Inc, and to move forward in its smartphone marketing strategy.

Google Inc is spending $40 per share in cash, which is a generous 63 percent premium to Motorola Mobility’s Friday closing price on the New York Stock Exchange. Shares of Motorola Mobility, which focuses on smartphone and TV set-top boxes, jumped 59 percent on Monday.

This move will not only make Google a key mobile handset player and boost its Android mobile operating system; it also provides a more effective route into the home for Google’s TV service, thanks to Motorola’s set-top box business.

In a press release, Google CEO Larry page elaborates:

“The acquisition of Motorola Mobility, a dedicated Android partner, will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing. Motorola Mobility will remain a licensee of Android and Android will remain open. Google will run Motorola Mobility as a separate business.”

The purchase comes after Google’s failed attempt at a bid to buy thousands of patents from bankrupt Nortel. The deal opens up growing opportunities for both parties, but one of the main components of the deal, especially for Google, was to secure patents for its Android platform.

RBC Capital Markets analyst Ross Sandler adds:

“Google is paying a significant premium to intrinsic value of Motorola Mobility, because there are few broad patent portfolios available in the marketplace today, and Motorola Mobility has one of the largest. Google (via Android) and the various Android original equipment manufacturers are likely facing significant risk of licensing fees and lawsuits around the intellectual property used to build Android from Oracle, Apple, Microsoft and others.”

With this deal, Google is showing its increased interest in the smartphone marketplace and its goal to compete against Apple on that platform. This is Google Inc’s largest acquisition yet but the Internet giant is expanding its portfolio and is showing no signs of slowing down.