Amazon.com Inc
The world's largest Internet retailer, which got into the market last year with a 7-inch tablet roughly half the price of the iPad, will begin selling on Nov 20 an 8.9-inch version with a high-definition screen, that works off either WiFi or fourth-generation wireless broadband, known as 4G.
Called the Kindle Fire HD, the 8.9-inch device starts at $299 for WiFi and 16GB of storage. Apple's WiFi iPad 2 with 16GB of storage costs $399.
The 4G Fire HD model, with 32GB, costs $499, while the 4G device with 64GB has a $599 price tag. The latest WiFi-only, 32GB iPad costs $599 and the top-end iPad with 3G and 64GB of storage costs $829.
Amazon's two 7-inch tablets will cost less. The updated Kindle Fire will be $159 and a Kindle Fire HD version is $199.
The Kindle Fire HD has a 1920 by 1200 resolution screen, lagging Apple's so-called "retina" display. At 8.9 inches, it is also smaller than the iPad's screen.
"Their first Kindle Fire tablet was a device that said 'See, we can tie all this together," but it wasn't a strong enough device," said Forrester Research analyst James McQuivey.
"Now they've really come ready to show that their device line-up is going to be as good as their service line-up. They're tying those two things together, and at a price that is very very hard to compete with. It's going to push everybody's else's price buttons -- including Apple's."
Apple is expected to unveil the iPhone 5 next week, and Microsoft and Nokia launched their powerful Windows phone on Wednesday.
Amazon Chief Executive Jeff Bezos took the stage to unveil two 8.9-inch versions of the Kindle Fire HD. He said Amazon saw the Kindle family of e-readers and tablets as a service, with hardware critical to its digital content business.
Amazon is competing with Apple, Google Inc
As the world's largest Internet retailer, Amazon must have a major presence in this sector. It is willing to make little or no money selling cheap tablets and e-readers to get the devices into as many hands as possible. Then, it can sell higher-margin digital content, such as e-books, video, games, apps and music, to a more connected and engaged customer base.
Amazon also showed off a "paperwhite" e-reader with a much sharper screen and longer battery life.
The 3G wireless version that made digital readers mainstream will sell for $179 starting in October, in time for the crucial holiday season. A Wi-Fi-only version will go for $119, and the cheapest will carry a $69 price tag -- undercutting the cheapest Barnes and Noble
Shares in Amazon closed on Nasdaq up 2.1 percent at $251.38, after hitting an all-time high of $252.70 during the session.
