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Amazon Kindle Fire HD: First Impressions (Update 1)

Stocks in this article: AMZN AAPL TXN DLB T

The 8.9-inch tablet is good value at $299, but paying for 4G LTE would set you back an additional $200, which is where it gets complicated if you're looking for an iPad replacement. At $499, the 4G version of the Kindle Fire HD still seems expensive compared to Apple's popular tablet. Even the $299 version may struggle to claw share from Apple after the tech giant cut the iPad 2's price to $399. The 7-inch version of the Kindle Fire HD, which starts at $199, seems like better value for your hard-earned dollar. Given that Amazon also cut its original Kindle Fire price to $159, I wouldn't be surprised to see this device outsell the new versions over time, given customers' price-sensitive natures, especially in this economy.

Amazon is making a valiant effort to compete in the high-end tablet market, alongside Apple. The Kindle Fire HD is much improved over the Kindle Fire, not only because of new hardware, but new software as well (Kindle Serials, more apps, games, Kindle FreeTime, for example). Ultimately, though, it feels as if the company will come up short in making a dent in the high-end tablet market Apple has dominated since 2009. The effort is there, but Amazon has to convince consumers to shift away from the Apple ecosystem.

There have also been questions about the data plan Amazon is offering. Amazon announced a 250 MB per month data plan for $50 per year for the first year, a significant cost savings over the iPad, but did not say the data plan provider (though it looks liked an AT&T logo). There was confusion during the event over whether the cost of the data was being subsidized by Amazon and would revert to original prices. An Amazon spokeswoman confirmed that the $50 cost is only for the first year, and "after that customers can choose from one of AT&T's (T) other standard plans."

Ultimately, the 7-inch tablet is one I'd recommend for purchase. If you're going to spend $499, I just can't see Amazon winning over Apple here, despite its best efforts. At that price level, it's just comes up short.

-- Written by Chris Ciaccia in Santa Monica, Calif.

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