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SANTA MONICA, Calif. -- Amazon unveiled four new Kindle Fire tablet computers on Thursday, including ones with larger color screens, as the online retailer steps up competition with Apple ahead of the holiday shopping season.

Amazon.com Inc. showed off the larger Kindle Fire amid expectations that Apple Inc. will introduce a smaller iPad as early as next week.

The larger Fires will have screens that measure 8.9 inches diagonally, compared with 9.7 inches for the iPad. The original Fire had 7-inch screens. The basic version of the larger Fire will sell for $299, or $100 less than the cheapest iPad.

[See also: GeekWire's coverage of the Amazon.com announcement.]

It's very clear today that there are two names in the market for tablets. One is Amazon and one is Apple, said Carolina Milanesi, research vice president at Gartner.

Seven out of every 10 tablets sold in the second quarter were iPads, according to IHS iSuppli. Tablets using Google's Android operating system have not been able to carve out a significant stake. Amazon is trying to change that with the new Fires, which run a modified version of Android.

Amazon has been selling lower-priced tablets at thin, if any, profit margins to boost sales of digital items from its online store. As a result, it has been able to compete with the iPad on price.

The basic, 7-inch Fire model will cost $159, down from $199 for the original model, which sold out last month. Amazon says it's 40 percent faster, has twice the memory and a longer battery life than the old version. It will start shipping next Friday.

I want one, BGC Partners analyst Colin Gillis said about the $159 Kindle Fire. It's a great price, and it's certainly not something that's going to be making money for them initially. It's great for consumers. How great a business strategy (it is) for Amazon remains to be seen.

Amazon's bread-and-butter is not its Kindle gadgets but the movies, books and music that people consume through them. By contrast, Apple sees content sales as a sideline and wants to make a healthy profit on every device sold. For example, the cheapest iPad costs $399 and the most recent models start at $499.

But Amazon signaled Thursday that it is going head-to-head with Apple when it unveiled its high-end Kindle Fire HD. It will have two Wi-Fi channels for faster transfers. That will be crucial for high-definition movies and other large files, CEO Jeff Bezos told reporters.

The HD model will also have more storage, starting at 16 gigabytes (the same as the iPad), compared with 8 GB for the old Fire. About 2 GB is taken by the Fire's operating system.

An 8.9-inch model will go for $299 and start shipping Nov. 20. That means a device nearly as big as the iPad will sell for at least $100 less. A 7-inch HD model will sell for $199, starting next Friday.

The Fire, however, won't have as extensive a selection of apps as the iPad. In addition, while the HD models will have a front-facing camera for video chats, the iPad has one on the rear as well for taking photos and video.

A premium Kindle Fire HD model, one with the ability to connect to the 4G cellular networks that phone companies are building, will cost $499. It will come with 32 gigabytes of memory and an 8.9-inch screen. A data plan will cost $50 a year. Apple's 4G iPads with 32 GB cost $729, not including data plans.

Baird analyst Colin Sebastian said Thursday's event showed that at the end of the day, Amazon is a legitimate competitor in the tablet market.

They did at least enough to compete against Apple and against Google this year, he said. That said, Sebastian added that he wouldn't worry about Apple.

I'd worry about the other Android tablets, he said.

Google, for one, has a 7-inch Android tablet called the Nexus 7. Samsung Electronics Co., which outsold Apple in smartphones this year, also makes Android tablets under the Galaxy line. Barnes & Noble Inc. has the Nook Tablet, which also runs on a modified Android system.

Amazon also refreshed its line of stand-alone e-readers. Called Paperwhite, the new e-reader model has a black-and-white screen and comes with a light source.

Tablets such as the iPad and the Fire don't work as well in bright light because they are lit from the back. Bezos says the light on the Paperwhite is directed down at the display. The device promises eight weeks of battery life, even with the light on.

It costs $119 and starts shipping Oct. 1. Amazon says it will start taking orders Thursday. There's also a model with 3G cellular connections for $179. Amazon is also dropping the price of its low-end Kindle to $69, from $79. That will start shipping next Friday.

With the Paperwhite, Amazon proved that there is still value in the uni-functional device, Gartner's Milanesi said. But, she added, it has to be cheaper than the rest.

Seattle-based Amazon's stock jumped $5.16, or 2.1 percent, to close Thursday at $251.38. Earlier in the day, it hit a record high of $252.70.

Here's a look at the key differences between a mid-range model closest to the iPad, along with the original Kindle Fire, the iPad and other leading competitors.

Amazon.com Inc.'s mid-range Kindle Fire HD:
-- Price: $299 for 16 gigabytes of storage
-- Screen size: 8.9 inches diagonally
-- Screen resolution: 1920 by 1200 pixels
-- Weight: 1.25 pounds.
-- Cameras: Front-facing camera.
-- Battery life: Undisclosed.
-- Operating system: Modified version of Google's Android
Pros: Cheap and portable. Convenient access to Amazon store. Large high-definition screen. Dolby audio. Available with access to fast 4G wireless broadband networks, for $499.
Cons: Small selection of third-party applications available from Amazon. No rear camera for taking video and photos.

Amazon.com Inc.'s original Kindle Fire:
-- Price: $199 for 6 gigabytes of storage
-- Screen size: 7 inches diagonally
-- Screen resolution: 1024 by 600 pixels
-- Weight: 0.9 pounds
-- Cameras: none
-- Battery life: 8 hours.
-- Operating system: Modified version of Google's Android
Pros: Cheap and portable. Convenient access to Amazon store.
Cons: No-frills tablet lacks camera and microphone. Small selection of third-party applications available from Amazon. Data storage cannot be expanded with memory cards. No option for cellular wireless broadband.

Apple Inc.'s iPad:
-- Price: Starts at $499 for 16 gigabytes of storage, goes up to $699 for 64 gigabytes, more for versions with cellular data access. (Apple still sells the older, iPad 2 for $399.)
-- Screen size: 9.7 inches diagonally
-- Screen resolution: 2048 by 1536 pixels
-- Weight: 1.44 pounds
-- Cameras: 5-megapixel camera on back and a low-resolution camera on front, for videoconferencing
-- Battery life: 10 hours.
-- Operating system: Apple's iOS
Pros: Unmatched access to third-party applications, high-quality Apple software and the iTunes store. Unique high-resolution screen. Widest range of cases and accessories available. Available with access to fast 4G wireless broadband networks, starting at $629.
Cons: Data storage cannot be expanded with memory cards.

Google Inc.'s Nexus 7
-- Price: $199 for 8 gigabytes of storage, $249 for 16 GB.
-- Screen size: 7 inches diagonally
-- Screen resolution: 1280 x 800 pixels
-- Weight: 0.75 pounds
-- Cameras: Front-facing, 1.2 megapixel camera
-- Battery life: 9.5 hours
-- Operating system: Google's Android
Pros: Access to a variety of games, utilities and other software for Android devices, though not as extensive as apps available for iPad. More features than Kindle Fire at same price.
Cons: Integrates with Google Play store, which is still new and isn't as robust as Apple or Amazon's stores. Data storage cannot be expanded with memory cards. No option for cellular wireless broadband.

Samsung Electronic Co.'s Galaxy Tab 2 10.1:
-- Price: $399 for 16 gigabytes of storage
-- Screen size: 10.1 inches diagonally
-- Screen resolution: 1280 by 800 pixels
-- Weight: 1.24 pounds
-- Cameras: low-resolution front camera, 3-megapixel back.
-- Battery life: 11 hours.
-- Operating system: Google's Android
Pros: Also with 7-inch screen for $250. Storage is expandable with microSD memory cards. Can act as a universal remote control for an entertainment center.
Cons: Selection of third-party applications not as good as iPad's, but wider than Kindle. Screen resolution lower than iPad's. No option yet for wireless broadband.

Samsung Electronic Co.'s Galaxy Note 10.1:
-- Price: $499 for 16 gigabytes of storage, $549 for 32 gigabytes
-- Screen size: 10.1 inches diagonally
-- Screen resolution: 1280 by 800 pixels
-- Weight: 1.3 pounds
-- Cameras: low-resolution front camera, 5-megapixel back.
-- Battery life: 9 hours.
-- Operating system: Google's Android
Pros: Comes with a pen, for jotting notes and drawing on the screen. Slightly thinner and lighter than an iPad. Longer, narrower screen better suited to movies. Storage is expandable with microSD memory cards. Can act as a universal remote control for an entertainment center.
Cons: Selection of third-party applications not as good as iPad's, but wider than Kindle. Screen resolution lower than iPad's. No option for wireless broadband. Pen sensor slightly shortens battery life.

Barnes & Noble Inc.'s Nook Tablet:
-- Price: $199 for 8 gigabytes of storage, $249 for 16 gigabytes
-- Screen size: 7 inches diagonally
-- Screen resolution: 1024 by 600 pixels
-- Weight: 0.9 pounds
-- Cameras: None.
-- Battery life: 11.5 hours.
-- Operating system: Modified version of Google's Android
Pros: Cheap and portable. Storage is expandable with microSD memory cards. Easy access to Barnes & Noble book store.
Cons: Selection of third-party applications is small. Barnes & Noble lacks wide range of content. Lacks cameras and option for wireless broadband.

Microsoft Corp.'s Surface (available Oct. 26):
-- Price: Not yet announced. Storage options will range from 32 to 128 GB
-- Screen size: 10.6 inches diagonally
-- Screen resolution: Not yet announced.
-- Weight: About 1.5 pounds for low-power version, 2 pounds for version running PC-style Intel processor.
-- Cameras: Front and back cameras
-- Battery life: Not yet announced.
-- Operating system: Microsoft's Windows 8.
Pros: Some compatibility with programs available for traditional Windows computers. Storage can be expanded with microSD memory cards.
Cons: Operating system lacks good track record on tablets, and selection of tablet-adapted third-party applications will be small.

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