Amazon Kindle Fire tablet undercuts iPad with $199 retail price

Amazon has launched its first multimedia tablet as the online retailer looks to translate its success in the e-reader market into the tablet space and challenge the dominance of the Apple iPad.

The 413g Kindle Fire will come with a 7in in-plane switching, ultra-wide display with a resolution of 169 pixels per inch. Other specifications have yet to be disclosed, but the tablet will ship with a dual-core processor.

Amazon has chosen to run a heavily customised version of Android, quashing speculation that the device will run on stock version of the operating system.

The Fire is capable of multi-tasking, so buyers can listen to music while reading, for example. Content will be backed up on the Amazon Cloud wirelessly and will not require plugging the device into a PC.

The tablet features a 'split browser' known as Amazon Silk which lives partly in the Amazon EC2 cloud and partly on Kindle Fire, explained Amazon founder and chief executive Jeff Bezos. Common web files are cached in EC2, which will help to improve browsing speed.

Unsurprisingly, Amazon will undercut the competition by pricing the Fire at $199. This makes it $300 cheaper than the entry-level 16GB Wi-Fi-only iPad 2.

"This is unbelievable value. We're building premium products at non-premium prices. We're determined to do that," Bezos told attendees at the New York launch.

The Amazon Kindle Fire is available to pre-order now, and will start shipping in the US on 15 November.

Amazon has also refreshed the current Kindle e-reader line, adding the Amazon Kindle Touch, which comes without a keyboard but sports a solitary home button on the bottom of the bezel much like the iPad.

"This Kindle is incredibly light - 75 per cent lighter than the previous generation," Bezos said.

The touch-screen device will come in two models, the Wi-Fi only model costing $99 and the 3G version costing $149. UK pricing has yet to be confirmed.

Amazon will also offer a simplified version of the Kindle without the touch screen and keyboard. The device has some directional buttons at the bottom for page turning and will retail at $79 in the US and £89 in the UK.

"You can carry your whole library with you. It's $79. We're going to sell many millions of these," Bezos said. "So meet the family. These are premium products at non-premium prices. People are going to love these products."

Adam Leach, an analyst at Ovum, suggested that the Kindle Fire will provide some much needed competition for the iPad and will increase overall tablet sales.

"We believe that the launch of an Amazon tablet will significantly boost the market and inject a much needed competitor to Apple's iPad," he said.

"The device will lift currently sluggish shipments of Android-based tablets, helping them to grow from five million units by the end of 2011 to an expected 89 million units by 2016."