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Amazon Launches Kindle Fire HDX to Take on iPads (Update 1)

Updated from 8:19 a.m. EDT to provide analyst comments in the 10th paragraph.

NEW YORK (TheStreet) -- Amazon (AMZN - Get Report) CEO Jeff Bezos has always been considered an innovator. His latest innovation is announcing new products at the stroke of midnight.

At 12 a.m. EDT Wednesday, Amazon updated its Kindle Fire tablet line, launching 7-inch and 8.9-inch versions of the Kindle Fire HDX to help take on Apple's (AAPL - Get Report) iPad, which still has the top spot in the tablet market, with 32.4%, according to tech research firm IDC.

Amazon doesn't break out how many units it sells, but IDC estimated in the first quarter of 2013 that it had 3.7% of the tablet market. By the second quarter, Amazon had dropped out of IDC's top five tablet makers, with Apple, Samsung, ASUS, Lenovo, and Acer taking the top spots.

The 7-inch tablet starts at $229, while the larger 8.9-inch version starts at $379.

"These are powerhouse tablets," Bezos wrote in a letter posted on Amazon's Web site. "We added the latest graphics engine, doubled the memory, and tripled the processing power with the most advanced 2.2 GHz quad-core processor. Our HDX displays bring together exceptional pixel density (up to 339 ppi), perfect 100% sRGB color accuracy, improved brightness, and dynamic image contrast. You also get up to 11 hours of battery life--17 hours when you're reading."

Bezos also noted that the new tablets, including the 8.9-inch version, are "startlingly light." It weighs 13.2 ounces, 34% lighter than the Kindle Fire HD, which Amazon unveiled in Santa Monica last year.

There's also hundreds of updates for the new tablets, including email, calendar, productivity apps and X-Ray for Music and Second Screen. The most buzzed-about new feature (for perhaps the wrong reasons) is the 'Mayday' button, which makes an Amazon expert appear on screen for free, at any time, to show you how to operate the tablet. That seems like a curious feature to me, perhaps indicating previous Kindle Fire tablet owners thought the devices were too complicated. <story_page_break>

The new Kindle Fire HDX tablets run Fire OS 3.0, codenamed "Mojito," which is built off Google's (GOOG) Android 4.2, codenamed Jelly Bean.


Unfortunately, despite the device using an OS built of Android, users still can't get access to Google Play, with its hundreds of thousands of apps and media pieces. Instead, users are still forced to download apps and content from Amazon's appstore (not to be confused with Apple's App Store).

Topeka Capital Markets analyst Victor Anthony reiterated his "buy" rating on Amazon, following the announcement. "We reiterate our Buy rating as we believe the specs and features offer a compelling economical alternative to iPads," Anthony wrote in a report. "Amazon is well on its way to effectively replicate Apple's business model."

In addition to announcing the new Kindle Fire HDX tablets, which are available for pre-order starting Wednesday, and new Origami covers (ummm okay), Amazon cut the price on its previous Kindle Fire HD, which is now selling for $139.

Shares of Amazon were rising 0.7% Wednesday to $316.19.

--Written by Chris Ciaccia in New York

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