Amazon unveils 4 new Kindle Fire models

SANTA MONICA, Calif. -- Amazon unveiled four new Kindle Fire tablet computers 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 with a high-definition display amid expectations that Apple Inc. will introduce a smaller iPad as early as next week.

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

Seven out of every 10 tablets sold in the second quarter were iPads, according to market research firm 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 online sales of digital items. As a result, it has been able to compete with the iPad on price.

Chief executive Jeff Bezos said in an interview backstage that Amazon won't lose money on the devices even if customers don't use them to buy digital content from its online store.

"We want people to buy content from the device, sure," he said. "We're fine if they don't."

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

Amazon's bread-and-butter is the movies, books and music that people consume. 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.

Amazon signaled Thursday it is going head-to-head with Apple when it unveiled its high-end Kindle Fire HD. It will have two Wi-Fi channels and two internal antennas for faster, smoother transfers. That will be crucial for high-definition movies and other large files, Bezos told reporters. The HD model will also have more storage, starting at 16 gigabytes. .

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.