SAN FRANCiSCO – Amazon.com Inc. unveiled its third generation of Kindle Fire tablets and boosted their prices, as the world's biggest e-commerce company seeks to set itself apart in an increasingly crowded market.
The new Kindle Fire HDX costs $229 to $479 and comes in two display sizes, 7-inch and 8.9-inch, Amazon said in a statement Wednesday. While the prices are lower than Apple Inc.'s latest iPads and iPad minis, which start at $329, they are more expensive than the older Kindle Fire HD that started at $199. The HDX tablets have higher-resolution screens, faster processors, weigh less than their predecessors, and have 4G wireless capability.
Amazon is battling Apple and Google Inc. in the tablet market, where it remains a smaller player. While Amazon's devices have done well in the holiday season, sales have dropped off after the rush. The company was No. 3 after Apple and Samsung Electronics Co., with 12 percent share in the fourth quarter of 2012, according to researcher IDC, and slipped to No. 4 with 3.7 percent share in the first quarter.
Amazon takes a different business approach with its tablets than its rivals. While Apple makes money on an iPad each time a tablet is sold, Amazon offers its devices at cost. The Seattle company instead aims to profit off the movies, books and music consumed on each Kindle Fire, Chief Executive Jeff Bezos said in an interview.
"We want to make money when people use our devices, not when they buy our devices," Bezos said. "We think that's good customer alignment."
The company has a history of offering some products and services at cost or at a loss to drive consumer engagement. Amazon charges $79 a year for its Prime fast-shipping service, and members of the program tend to be some of the heaviest buyers of goods through its website.