Looking to step up the pressure on Apple's market-defining iPad with aggressive pricing, Amazon.com on Thursday introduced new models of the Kindle Fire tablet, including one with an 8.9-inch screen and dual Wi-Fi antennas designed for streaming HD video.
The 7-inch Kindle Fire HD includes either 16 or 32 GB of storage and starts at $199, while the 8.9-inch model is available with 16, 32 or 64 GB and starts at $299. A new 7-inch Kindle Fire with 8 GB of storage will cost $159 -- $40 cheaper than the initial model.
In addition, Amazon debuted a Kindle Fire HD model with built-in 4G LTE connectivity, which will run $499 with 32 GB of storage (and $599 with 64 GB) and an 8.9-inch screen. Data plans for the 4G model will cost $49.99 per year, with service provided by AT&T. Usage is capped at 250 MB per month.
"We're taking on the most popular price point for a tablet, $499, but doubling the storage and, incredibly, adding ultra-fast 4G LTE wireless," Jeff Bezos, Amazon.com's founder and CEO, said in a statement, referring to the price of Apple's new iPad.
Kindle Fire HD is "not only the most advanced hardware, it's also a service," Bezos added. "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."
Amazon is looking to take market share from Apple, whose worldwide share of the media tablet market rose to nearly 70% in the second quarter, according to research firm IHS iSuppli.
In the second quarter, Amazon's Kindle Fire was in third place in the tablet market with 4.2% share after shipping 1 million units, trailing both Apple and Samsung Electronics, which had 9.2% share. Amazon said last week it sold out of the original $199 Kindle Fire tablet, which it began shipping in November 2011.
Amazon said the 7-inch Kindle Fire HD and the new Kindle Fire will be available Sept. 14. The 8.9-inch models will be available starting Nov. 20.
Tablets have quickly emerged as popular video-consumption devices for TV and movie content, with displays that are larger and sharper than smartphones. Apple's newest iPad features a 9.7-inch screen with a 2048-by-1536 "Retina" display -- although priced at $499 for the 16-GB model, it's $200 more than Amazon's 8.9-inch Kindle Fire HD.
Other contenders in the tablet wars include Google, which this summer introduced the $199 Nexus 7 tablet, and Microsoft, which plans to launch Windows-based Surface tablets with HD displays this fall.
In announcing the new tablets, Amazon touted its content lineup, which includes more than 120,000 movies and TV episodes. Tablet customers can stream or download, and purchase or rent the titles. Members of the Amazon Prime free-shipping program can access more than 25,000 popular movies and TV episodes --including titles from Epix -- at no additional cost. New Prime customers are eligible to receive one free month of Amazon Prime when they purchase a Kindle Fire.
Amazon announced the new Kindle devices at an event Thursday in Santa Monica, Calif. The Internet retailer also introduced a new e-reader, the $119 Kindle Paperwhite, which features a higher-resolution screen.