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Amazon unveiled its long awaited tablet, the Kindle Fire, together with two new models in its e-reader range, one priced at just $79. Although the media is desperate to present this as a direct war with Apple, that war will be fought over cloud and content services, where the two companies are both vying for dominance - not over device features (the Fire comes without 3G, camera or microphone, for instance). In terms of specs, the new gadgets are head-to-head with Amazon's main US rival in the ebook space, Barnes & Noble.

Like B&N, Amazon now has a lightweight touchscreen tablet, which borrows heavily from the e-reader design and experience rather than trying to be an iPad-alike. If the Fire does well, Amazon is likely to move more directly into the iPad's realm with a 10-inch stablemate with more technical bells and whistles.

For now, Amazon's strategy is to cast a very wide net for customers of its digital content services, including Instant Video for movie streaming, MP3 music, the Kindle store for books and magazines, and the Android AppStore - all backed up in the cloud. It will do this with a tablet that is even more aggressively priced than expected, at $199 (most had expected $250), putting it in a very different market from the iPad and most Android tablets. The fire sale of the discontinued HP TouchPad had already proved the demand for a low cost Android slate, among a user base distinct from that targeted by Apple - and Amazon is not looking for device margins, but increased content purchasing.

That means the Amazon offering, compared to other affordable Android models, has the huge added appeal of a fully integrated content experience, sweetened by a free trial to its Prime service, which includes streamed movies and free shipping of physical goods (Prime subscribers spend several times more with Amazon than casual shoppers, so we can expect to see more bundling of Prime with the tablets).

The significance of Kindle Fire lies in its integrated content and its user experience, which will be the secret to its success or failure in the slate market, and therefore its impact on Apple and (more immediately) weaker rivals like RIM PlayBook. It comes with a new browser-based user interface called Amazon Silk, which promises to be more efficient on a mobile platform through its use of caching and compression. It is 'split' between the device and the EC2 cloud server.

So far, the Fire comes with Wi-Fi, not 3G, indicating the difficulties of transferring the popular embedded 3G model of the e-reader - where cellular connectivity is included transparently in the price of the device - to a more data hungry platform.

"For 15 years we've been building our media business and it's become a $15bn-a-year business," said Amazon founder and CEO Jeff Bezos during the launch event.

For those whose first priority is still an optimized reading experience, Amazon is also broadening its reach with a $79 e-reader. It now has two models under $100 - the new lightweight version of the Kindle 3 at $79; and the Kindle 3 itself, now rebranded the Kindle Keyboard, at $99 in its Wi-Fi only version. Also in the line-up are Kindle Keyboard 3G, and a new 3G/Wi-Fi model, the Kindle Touch. This is the high end for the family now, with an on-screen touch-enabled keyboard and faster page turning, among other features.

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