As expected, Amazon announced its updated 2012-2013 Kindle family this afternoon. In addition to two new eInk readers, three Android-based Kindle Fire tablets were also introduced, two with HD displays.

The Kindle Fire HD models are available with either a 7-inch or 8.9-inch touchscreen, the smaller costing $199 with 16GB of internal storage, the larger priced $100 more.  Both screens are HD, with the larger 8.9-inch model featuring an impressive 1920×1200 display with 254PPI (a slightly less-dense pixel count than the iPad 3).  New display construction methods are said to reduce glare and increase effective viewing angles. 

The larger Fire HD includes the new TI OMAP4 4470 ARM SoC processor, which Amazon says outperforms even the NVIDIA Tegra 3, currently considered to be the fastest tablet SoC.

Amazon also has a 4G version of the 8.9-inch Kindle Fire HD, which gives you 250MB of use per month for an annual fee of $50.  Impressive.  This model comes with double the storage, 32GB, and is $499 – $230 cheaper than a comparable iPad 3 and far more affordable once you factor in the monthly cost of 4G access on Apple’s tablet.

The standard Kindle Fire also received a reported 40% performance bump, improved battery life, and a price cut – now $159 rather than $199.

Pre-orders start today with the new Kindle Fire and 7-inch Kindle Fire HD shipping in mid-September.  The 8.9-inch models will ship in November. 

Amazon’s first Android tablet, the Kindle Fire, and its first touchscreen electronic paper eReader, the Kindle touch, are launching early.

The $199 Kindle Fire, which is a color eReader, media player, and general-use tablet, has begun shipping today (1 day early) for those first in line with pre-orders; new orders are expected to ship by the end of the week.  The Kindle Touch and Kindle Touch 3G, which weren’t supposed to ship until next week, will begin shipping tomorrow, but again only for those with first priority pre-orders.  New Kindle Touch orders are expected to ship in the next 8 or 9 days.

The Kindle Touch and Kindle Touch 3G come in both ad supported and non ad supported models.  The ad supported Kindle Touch (called the Kindle Touch with Special Offers) is $99 – the ad-free model costs $40 more.  The ad supported Kindle Touch 3G is $149, $189 without ads.  Be careful when ordering.

This morning, Barnes & Noble took the wraps off the not-so-secret Nook Tablet, follow-up to the Nook Color and a head-to-head competitor with Amazon’s upcoming Kindle Fire.  The Fire will cost less – $199 rather than the Nook Tablet’s $249 – but will also offer less memory and storage.  And each will ship around the same time, mid-November.

So… which to choose?

This isn’t a question that can be answered in the same way for everyone, so let’s look at the two devices’ features one by one:

Price

The Nook Tablet will cost $50 more than the Kindle Fire, probably not the best move for B&N if they really want to compete with Amazon in the tablet eReader space.  Amazon is also throwing in a free month of Amazon Prime, a $79/year club that offers thousands of free streaming movies and TV shows, free two-day shipping, $3.99 per item overnight shipping, and even book lending.

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After a year of speculation, today Amazon took the wraps off its first tablet device, the Kindle Fire.  The Kindle Fire is a skinned Android tablet with a dual-core processor, a 7-inch IPS touchscreen, Wi-Fi, and software geared for Amazon-powered content consumption.

Of course, the Kindle Fire will have an eBook reader app, much like tablet versions of the software already available, but there will also be support for watching streaming video, and purchasing and listening to music.  And, of course, there’s a web browser. 

Unlike many Android tablets on the market, the Kindle Fire isn’t trying to be all things to all users; it’s a content consumption device first and foremost.

You can add additional software to the Kindle Fire via the Amazon Appstore.

The Kindle Fire will sell for $199 and will include a one month trial of Amazon Prime(Review), the $79 yearly membership that allows $3.99 per item overnight shipping of Amazon-stocked products as well as streaming movies and TV shows from the Amazon Instant Video library.

A new touch-enabled version of the eInk Kindle, called the Kindle Touch, was also announced.

Sources: Bloomberg, thisismynext.com

Given the success of Android in the smartphone market, we’ve been surprised, frankly, that not one of the tablets powered by Google’s OS has been able to make the iPad so much as flinch; iPad continues its dominance in the tablet space as surely as if it were the only available option.

But this reality won’t be last. Eventually, a viable competitor will emerge.   So, could Amazon be the company to finally offer an acceptable alternative, at least from consumers’ standpoint, to Apple’s iPad?

For months there have been rumblings that the retailer would, building on its success in the eReader market, release its own tablet device.  And for several reasons, Amazon might just stand the best chance of challenging iPad.  But what exactly would such a tablet offer? Would it feature a color eInk touchscreen (unlikely), an LCD-eInk hybrid (also questionable), an entirely new display technology, or simply a color LCD touchscreen like the Nook Color and other current tablets?  What software would it run? How much would it cost?

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