SEATTLE—Amazon.com Inc. is staying the course with a new line of Kindle Fire tablet computers that undercuts competitors like Apple Inc.'s iPad on price, and appears designed largely to drum up sales for other services such as digital music and e-books.
The company on Wednesday unveiled two new versions of its tablets—the Kindle Fire HDX—available with 7-inch or 8.9-inch screens.
'We want to make money when people use our devices, not when they buy our devices,' says Amazon.com CEO Jeff Bezos.
The tablets, which come at the same time as a flurry of new entrants from competitors such as Samsung Electronics Co., include a faster processor and graphics, improved screen quality and new software features, as well as a tweaked design to make them lighter, with a slimmer body.
"We want to make money when people use our devices, not when they buy our devices," said Amazon Chief Executive Jeff Bezos in an interview.
One new software feature, known as X-Ray for Music, allows users to identify by name songs in television shows and movies—at which point they are prompted to buy a digital version from Amazon.
Also new to the devices is integration of book recommendation and sales site Goodreads, which the company bought earlier this year.
Kindle Fire users also will be able to download videos available free as part of an Amazon Prime membership, when before they required a Wi-Fi connection to view them.
![[image]](http://si.wsj.net/public/resources/images/MK-CG559_AMAZON_DV_20130924191926.jpg)
Stuart Isett for The Wall Street Journal The new Kindle Fire HDX is available with 7-inch or 8.9-inch screens.
Amazon's approach contrasts with rivals like Apple and Samsung, which generate hefty profits from the devices themselves. From their introduction two years ago, Amazon's tablets have stood out chiefly for their low prices and deeply integrated Amazon-specific software.
"If you're making most of your money when you sell the device, you really care about upgrading, and what we really care about is building a device that people continue to use," said Mr. Bezos, recounting a recent trip to Florida where he said he saw people on the beach using four different versions of the Kindle e-reader.
"We don't have to have our customers on the upgrade treadmill," he said.
Still, he stopped short of saying Kindle Fire users spent more on Amazon e-books, music or physical goods. "That's not our motivation," he said. "There are some customer delight features that we want to build that require us to operate all the way down to the hardware."
Amazon released a new version of its Kindle e-reader this morning that has two main goals for the company: get more people buying more things on Amazon.com, and undercut Apple's iPad. George Stahl joins MoneyBeat with the details. Photo: Amazon.
Amazon has broad hardware ambitions and has been developing an array of devices at its Lab126 unit in Silicon Valley. It has been working on at least two different smartphones, including one with a 3-D screen as well as a set-top box for streaming video and an audio-only device, according to people familiar with the matter.
The Kindle Fire HDX starts at $229 for the 7-inch version and $379 for the 8.9-inch version, and models with 4G wireless connectivity are $100 more each.
By contrast, Apple's iPad Mini is $329 to start, Samsung's Galaxy Tab starts at $299 and Microsoft Corp.'s new Surface 2, unveiled this week, is $449 for a 32-gigabyte version.
Tablet shipments jumped 43% in the second quarter to 34.2 million, with Amazon boosting its sales more than threefold to 1.55 million, according to research firm Canalys. Apple meanwhile saw shipments slip 14% to 14.6 million, followed by Samsung's 7.37 million.
While Apple and others disclose tablet sales figures, Mr. Bezos said Amazon doesn't disclose Kindle Fire results due in part to tradition. "We have a long-standing history of not sharing many numbers," he said. "We've sold many millions."
Sarah Rotman Epps, an analyst with Forrest Research, said the latest Kindle Fire tablets could appeal to a broader base of customers, particularly those less savvy about technology. One feature, known as Mayday, allows users to call up a live tech helper for problems with their device.
"That's a differentiator from other tablets," said Ms. Epps. She also pointed to the addition of a rear-facing camera as an improvement over previous Kindle Fire models.
The devices are available Wednesday for preorders and the 7-inch version begins shipping Oct. 18, followed by other versions starting Nov. 7.
Write to Greg Bensinger at greg.bensinger@wsj.com
Corrections & Amplifications
Apple's iPad Mini sells at $329 to start. An earlier version of this article incorrectly said Apple's lowest-priced iPad sells for $499.
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