New Kindle Fire at breakout $159 price

September 6, 2012

At a media event in Santa Monica, California, Amazon CEO Jeff Bezos showed off new additions to the Kindle and Kindle Fire line.

The first bit of big news from the event is that Amazon is launching a new Kindle Fire at $159. More details below. Ovum analyst Jan Dawson has already weighed in that Amazon's move should worry competitors.

“Amazon is clearly spooked by Google’s Nexus 7 coming in at $200 for a much more capable device, and it’s upped its own hardware specs while reducing the price to $159, which is clearly an attempt to keep it somewhat attractive in the face of that new competition from Google and Asus," she said.

As various live blogs report, Amazon CEO Jeff Bezos kicked off the event by noting last year more than two dozen Android tablets were launched “and no one bought them. Why? Because they are gadgets and people don’t want gadgets anymore. They want services.”

He then declared, “Kindle Fire is a service” but also noted that hardware is “a critical part of that service.”

Amazon is believed to have offered the $199 Kindle Fire at about a slight loss over what it cost the company to make it because it can still profit from such services as online shopping and virtual goods like ebooks and movies.

Bezos showed off a new high res $119 Kindle e-reader with 25% more contrast and a front lit display. This Kindle includes eight weeks of battery life with the light on. A new feature called “Time to Read estimates how much time it will take you to finish a chapter or the entire book.

New Kindle Fires

Declaring that Amazon wants to have the best tablet at any price, Bezos unveiled a new Kindle Fire that will sell for $159 and be available September 14. It sports double the RAM and is 40% faster than the original Kindle Fire, but still has longer battery life.

There will be two new models. In addition to the $159 that replaces the original Kindle Fire, there's now the Kindle Fire HD sporting an 8.9-inch display and Dolby's new Dolby Digital Plus audio. The HD model has a very high, 1900 x 1200 resolution and Amazon says its polarizing filter ensures about 25% less glare than the earlier model.

Bezos also claims Amazon will offer much faster WiFi speeds for the new Kindle Fire — at 31 Mbps he says the Kindle Fire now has 54% faster WiFi than the Nexus 7 and 41% faster than Apple's latest iPad.

Hurry and wait for Kindle Fire HD

Amazon plans to take the iPad on head on with the 8.9-inch HD model, matching Apple's $499 base with more features while offering a WiFi-only model for $200 less.

The Kindle Fire HD 8.9 4G includes higher speed 4G LTE connectivity and 32GB, with an option for 64GB. (The basic new iPad comes with 16GB) for $499.

But Amazon also undercuts the $399 iPad 2 with a $299 WiFi-only verison, the Kindle Fire HD 8.9 with 16GB storage (or optional 32GB).

Amazon also has an aggressively-priced data plan —  150MB of data access a month from AT&T, and 20GB of cloud storage from Amazon for $50 a year.

Amazon's taking pre-orders now, but the Kindle Fire HD won't be available for delivery till November 20.

Apple's expected to show off a new iPad Mini sometime next month and, based on past rollouts, there isn't likely to be a very long time between announcement and delivery, which means it could well be available weeks before Amazon's Kindle Fire HD is available.

Both company's new tablets figure to be big sellers this holiday season. 

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