The eagerly anticipated gadget, while lacking many of the high-tech bells and whistles common on tablets from cameras to 3G wireless connection, may sound the death knell for a raft of devices based on Google Inc's Android. The software powers tablets made by Samsung, Motorola, Asustek, HTC and LG Electronics.
Dotcom-entrepreneur and billionaire-CEO Jeff Bezos unveiled to a packed audience the gadget he hopes will wed Amazon's books, movies, music and other content with cloud or Internet-based storage and Web browsing.
"People have been waiting for a tablet for 200 bucks for a long time and this is the best one I've seen so far," Tim Stevens, editor-in-chief of gadget review website Engadget, told Reuters.
The Kindle Fire tablet has a 7-inch screen, free data storage over the Internet and a new browser called Amazon Silk. Amazon expects shipments to start on Nov. 15 -- hitting store shelves at Best Buy and other chains just in time for the peak holiday shopping season.
By pricing the Fire at less than half the iPad -- yet stripping out costlier components and features -- the Internet retailer hopes to get the device into millions of consumers' hands, who in turn will buy Amazon content.
One key differentiator that might help the Fire stand out during the cut-throat holidays is Amazon's "EC2" cloud computing service, which supports Internet browsing and helps speed loading of websites. That was not available on rival tablets, Stevens noted.
Amazon shares closed 2.5 percent higher, while Barnes & Noble dropped 7 percent. Apple shares dipped 0.6 percent.
"These are premium products at non-premium prices," Chief Executive Jeff Bezos said. "We are going to sell millions of these."
Analysts had expected Amazon's tablet to be priced around $250, roughly half the price of Apple's dominant iPad, which starts at $499. The Nook Color e-reader costs $249.
Bezos said Amazon is making "millions" of the tablet, without being more specific. However, he urged customers to pre-order the device.
When the original Kindle e-reader came out in 2007, it quickly sold out.
Breaking into a crowded tablet market will be difficult. Companies from Hewlett Packard Co, Motorola, Samsung and Research in Motion Ltd have launched tablets, but none has taken a big bite out of Apple's lead.
Apple dominates the North American tablet market, with 80 percent of the 7.5 million units shipped during the second quarter of 2011, according to Strategy Analytics.
Bezos took a jab at its larger rival during the New York press conference on Wednesday, noting that the Fire needs no wires for syncing. An image of a white USB cord appeared on the screen behind him, prompting laughter from the crowd.
Bezos didn't mention Apple but the picture of the cord resembled those commonly used to connect iPhones and iPads to computers.
The tablet might also encourage customers of Amazon, the world's largest Internet retailer, to shop online for physical products more often. (link.reuters.com/xab24s)
Amazon recently redesigned its main shopping website to make it easier to navigate for mobile users.
Meanwhile, competition at the high end of the market is heating up. Motorola on Wednesday announced it will offer 4G-LTE upgrades for Motorola Xoom users on Verizon Wireless, improving loading speeds.
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