Amazon undercuts iPad 2 with $79-$199 Kindles

Directly targeting Apple’s growing iPad ecosystem with even lower-priced alternatives, Amazon today launched a series of three completely new Kindle devices with prices ranging from $79 to $199. The most basic Kindle e-reader will now sell for $79, a drop from the company’s prior $114 price tag for its lowest-end unit, relying on modest screen saver-style ad support and a streamlined design to reduce the price tag. Amazon also announced a new $99 Kindle touch e-reader that employs an IR touch system in place of a physical keyboard, as well as a redesigned user interface that involves taps in place of buttons.

The new unit is also reportedly slimmer, smaller and lighter than the current Kindle models. A 3G-enabled model will also be available for $149 with free global roaming.

Amazon also revealed the anticipated Kindle Fire Android-based tablet today at a price of $199.

Designed to provide capabilities beyond those of traditional Kindle devices, Kindle Fire uses a custom version of the Android OS on a 7-inch IPS panel, featuring a dual-core CPU, Wi-Fi and a 14.6 ounce chassis. Although it lacks an embedded camera and microphone, or 3G connectivity, Kindle Fire is designed to be a simple touch-based video, music, book, and app-ready device leveraging all of Amazon’s digital stores and services. The device includes a 30-day trial of Amazon Prime, and provides access to the Amazon Appstore, Kindle Books, Amazon Cloud Storage, and introduces WhiperSync bookmarking for movies and TV shows.

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