Amazon spruces up lineup as tablet competition grows

Jeff Bezos, CEO of Amazon, held the new larger-model Kindle Fire HD at Thursday's introduction.
Jeff Bezos, CEO of Amazon, held the new larger-model Kindle Fire HD at Thursday's introduction. AP announced a series of updates to its Kindle devices on Thursday as it seeks to stoke consumer demand as Google and Microsoft crowd the tablet market with competing devices.

The company first unveiled the Kindle Paperwhite e-book reader with a higher-resolution screen, for $119. It has light directed toward the screen, making it work better in direct sun.

CEO Jeff Bezos also announced the Kindle Fire's basic model is getting improved processing power and a price drop, from $199 to $159. He then unveiled entirely new Kindle Fire HD models, including a new, larger model with an 8.9 inch display, which is just slightly smaller than Apple's iPad.

Amazon, the world's largest online retailer, relies on the Kindle to help sell digital movies, books and music — an effort that may be bolstered by the revamped device.

"The launch is important as it sets the stage for a fierce market share battle with Apple and Google — or more likely a battle for second place, given Apple's significant advantages," said Colin Sebastian, an analyst at Robert W. Baird & Co. in San Francisco.

Amazon's share of the global tablet market slipped to 4 percent in the first quarter from 17 percent in the December period, according to research firm IDC. Apple's iPad widened its lead in the market to 68 percent in the first quarter, IDC said.

Microsoft and Google are pushing into a market that may reach $66.4 billion this year, according to research firm DisplaySearch. Apple plans to debut a smaller, cheaper iPad by year-end, two people with knowledge of the plans said in July.

Google, which makes the Android software that runs the Kindle Fire, is entering the running with the Nexus 7, a tablet that is thinner and lighter than the first Kindle Fire for the same $199 price. Google buyers have the option to upgrade to 16 gigabytes of storage from 8 gigabytes for $249. The Nexus 7 also boasts Bluetooth connectivity, GPS and a camera.

Microsoft's device, the Surface, has a 10.6-inch display and also is slimmer than the original Kindle Fire. It will run on Microsoft's revamped Windows operating system and has a cover that serves as a full keyboard with a track pad. Microsoft hasn't disclosed the price.