NEW YORK CITY -- Amazon (NASDAQ:AMZN) introduced its Kindle Fire tablet computer, a WiFi-only, 7-inch slate priced at $199.999 to drastically undercut the $499 base price of Apple's (NASDAQ:AAPL) iPad.
The Kindle Fire, which is based on Google's (NASDAQ:GOG) Android operating system, will go on sale Nov. 15.
The device is equipped with an IPS, Gorilla Glass-based touchscreen, is powered by a 1GHz, dual-core processor and weighs only 14.6 ounces. The tablet has 8 GB of internal storage and roughly 8 hours of battery life.
The Kindle Fire will be the main vehicle with which Amazon drives users to its 18 million books, magazine, movies, TV shows, songs, and applications.
During a demonstration of the Kindle Fire here, Amazon CEO Jeff Bezos showed how a user interface built atop Android provides consumers easy access to the company's content. There is even multitasking; users may read books while playing their music in the background.
Amazon's patented Whispersync, content synchronization technology now works with Amazon Instant Video. This will allow consumers to watch movie and TV shows on the Kindle Fire, stop watching them, and pick up where the movie left off on their home television or PC.
The Kindle Fire provides access to the Web via Amazon Silk, a mobile Web browser created by Amazon that splits information processing between each device and on Amazon's EC2 Web services cloud. Bezos called this software a "cloud-accelerated mobile browser."
While Amazon may take a hit on selling the Kindle Fire hardware at $199.99 a pop, the company expects to make up the costs by selling consumers movie and TV show rentals, titles from its Kindle bookstore, as well as streaming music from the Amazon Cloud Player for music, and applications from Amazon's Appstore of Android programs.
The slate will come with a free, 30-day trial of Amazon Prime, the $79 a year membership service that afford consumers free, two-day shipping and access to Amazon's Prime streaming movie service. Amazon is also providing free Cloud Storage for every Kindle Fire.
"We're building premium products at non-premium prices," Bezos said.
The Kindle Fire may not be an iPad replacement for everyone. Like the original iPad, the Fire lacks a camera to enable users to shoot pictures or video. This Fire also lacks mobile broadband capabilities.
Still, the price point alone will win over cost-conscious consumers at time when Apple has set the tone for the market in selling over 30 million iPads.
Piper Jaffray analyst Gene Munster polled 410 consumers last week and found that 62 percent of those consumers said they would purchase a $249 tablet over the average, $599 iPad sold.