Amazon's New Kindle Line: Kindle Fire HD Emerges As Worthy iPad Challenger, At $200 Less

By Alexandra Burlacu | Sep 09, 2012 01:51 PM EDT

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In a major event on Thursday, Sept. 6, Amazon announced its new tablet lineup in a bid to pose a more serious challenge to the dominance of Apple's market-leading iPad. The retail giant announced updates to its line of Kindle e-readers, unveiling faster, better, and more competitively priced offerings.

The new line of devices includes the Kindle Fire HD, a tablet that comes in two sizes. The larger variant is nearly as big as the iPad, but costs $200 less. Amazon also introduced the Kindle Paperwhite, a new version of the black-and-white Kindle. The new iteration is thinner, turns pages 15 percent quicker than its predecessor, and has a new contrast screen lighted from the bottom, which should make it easier to read in the dark, touted Amazon. The Seattle-based retail company now offers seven models, ranging from a cheap $70 black-and-white e-reader to a $600 color tablet.

"We are not building the best tablet at a certain price," said Amazon CEO Jeff Bezos, as he was showing off the new devices. "We're building the best tablet at any price."

The new Kindle Fire HD comes as a more serious threat to Apple's iPad, challenging it on several fronts. The larger version comes with an 8.9-inch display, nearly as large as the iPad's 9.7 inches. The new tablet also sports a front-facing camera allowing for video chats via the built-in Skype video conferencing software, challenging the iPad's front-facing camera and Apple's FaceTime software.

This larger version of the Kindle Fire HD comes with 16GB of storage and a $300 price tag, $200 less than Apple's baseline iPad. Amazon is also offering a version with cellular data connectivity for $500, which is still cheaper than Apple's least expensive iPad with cellular connectivity, which sells for $630.

Bezos compared the Kindle Fire HD with Apple's iPad all throughout the presentation, highlighting both the features of Amazon's new tablet and its attractive price tag. He acknowledged that Apple is a major player in the tablet arena, but said the market was big enough for both companies to do well. Amazon, however, does come with one innovation: the X-ray feature for movies played on the Kindle Fire HD allows users to click on an actor in a movie and find out more via IMDb, Amazon's comprehensive movie and TV database.

Amazon does not compare itself to Apple when designing the devices, added the CEO. "Our first approach on this is to make sure that what we are doing is to follow our own philosophies, our own path, our own way," he told the New York Times. "Then, of course, we look around and see what others are doing."

Amazon also has a different approach than Apple's when it comes to selling its devices. While the online retail giant still makes its money selling its content, Apple actually profits on its devices. "Amazon's services are the core of its devices, and the devices enhance Amazon's service: a virtuous cycle where Amazon gains an increasing share of consumers' wallets," Forrester research analyst Sarah Rotman Epps wrote in a company blog post on Thursday.

Amazon has also worked with a number of partners, including Facebook, Microsoft, and various game developers, to have apps specifically created for the Kindle Fire HD. The applications, along with other material such as video, books, and music, are available through Amazon.

In addition to competition from Apple, Amazon was also aiming to challenge Google's recently launched Nexus 7, a 7-inch tablet priced at $200. Amazon's answer to the Nexus 7 is an upgraded version of a 7-inch color screen Kindle Fire tablet, which will sport a $159 price tag.

Although Amazon does not disclose sales figures for its Kindle line, last week it said the Fire had seized an honorable 22 percent of the U.S. tablet market. Meanwhile, Apple has sold more than 84 million iPads worldwide since its first introduced the tablet in 2010, and claims it has sold 44 million iPads worldwide so far this year.