Upgraded Kindle Fire Now $159, New “HD” Tablets Also Aggressively Priced

The Amazon Kindle

event just concluded without a smartphone announcement. But there were a bunch of new tablets introduced. I’m not going to go through all the specs; Danny’s live blog presented some of them and Techmeme is loaded with blog posts that detail screen resolution, battery life and so on.

However what struck me about the announcements was the pricing.

Amazon now maintains that in its new Kindle Fire HD line it has created the “best tablet” in the market at any price. And at the end of the presentation Amazon CEO Jeff Bezos slammed Apple by name, arguing that the better business model is to make money on content and not routine hardware upgrades.

Here’s the rundown on the new line of Kindle Fires:

1. Kindle Fire 7-inch (upgraded) but not “HD”: $159

2. Kindle Fire 7-inch HD: $199

3. Kindle Fire 8.9-inch HD: $299

4. Kindle Fire 8.9-inch HD 4G LTE: $499

From a distance these look like nice devices; however that remains to be seen. Bezos made lots of claims about the original Kindle Fire, which turned out in my experience to be a pretty weak tablet (outside of the Amazon content universe). These devices look stronger.

The strategy is the same as with the original Kindle line: a low-priced entry level device with multiple upsell opportunities to other units with slightly greater capabilities at each price point. There are currently five (count ’em) Kindles available, not including the Kindle Fire and its new siblings. In all there will now be something like eight individual devices in the newly reconstituted “Kindle family.”

This explosion of devices may be a kind of “shelf space” strategy on Amazon’s part as well.

Clearly Amazon recognizes that Kindle Fire’s success was mostly driven by aggressive pricing. And it has lowered the entry level Kindle Fire device price to an almost unbelievable $159. Lots of people will probably go for one of those; it will likely cannibalize regular Kindle sales at the higher end.

However the highest-end “HD” device (with 4G) is the same price as the entry level iPad without LTE. And it’s only about an inch smaller diagonally. Many people will find that a compelling offering.

Apple is slated to release a smaller tablet, probably priced around $199 to compete with Kindle Fire and the Nexus 7. Yet the $159 Kindle Fire could create problems for a smaller Apple tablet priced at $199 or above.

Indeed, we’ve gone from a market where the iPad was so far above the quality of competing devices to one where there are several very reasonable and affordable choices for consumers — especially those who are price sensitive.

Apple and Google it’s your move.