As suspected, Jeff Bezos took to a stage in Santa Monica today to unveil a new line of Kindle Fire tablets, as well as a backlit e-reader called the Kindle Paperlight. The Paperlight is clearly designed to compete with the Barnes and Noble Nook Glow, which has sold well in recent weeks. But it is the Kindle Fire HD tablets that have drawn the most attention from the tech press.
Bezos said Amazon will sell three HD Kindle Fires: One 7-inch model and two 8.9-inch tablets. The 7-inch model, priced at $199, gets Wi-Fi connectivity and 16 GB of storage. The cheaper of the 8.9-inch tablets will be equipped with a powerful OMAP4 4470 processor and graphics engine, and a price tag of $299. The more expensive will sell for $499 (the price of the cheapest iPad), and include 4G LTE connectivity.
Amazon will offer one year of 4G LTE data service for $49, although it remains unclear whether the price would go up after that.
"Kindle Fire HD is not only the most-advanced hardware, it’s also a service," Jeff Bezos wrote in a statement. "When combined with our enormous content ecosystem, unmatched cross-platform interoperability, and standard-setting customer service, we hope people will agree that Kindle Fire HD is the best high-end tablet anywhere, at any price."
Content ecosystem and service are the key words here. Because, as was the case with the first Kindle Fire, the Kindle Fire HD line is basically a way – a pipeline, if you will – for Amazon to sell you stuff from Amazon's digital stockroom. That stuff might include e-books, or movies, or even music. Thus the relatively low price: Amazon is betting it'll make up the difference in other ways.
Remember that Amazon actually lost about three bucks on every original Kindle Fire it sold (and according to Forrester, it sold about 7 million of them). We wouldn't be surprised if the company is pursuing a similar strategy here.
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