Why the Kindle Fire HD is so cheap

Kindle Fire HD isn't really "best tablet at any price" but still decent option for the price Amazon offsets lower price by using the tablet to spur more sales Ads and suggestions are frequent when using the Fire HD It's not a deal-breaker but could open the door for Google's Nexus 7 (CNN) -- If you take Jeff Bezos' word for it, Amazon's new Kindle Fire HD is "the best tablet at any price." Bold claim. And it's an obvious reaction to the reviews of last year's first-generation Kindle Fire, whichraised the $199 price but made it clear you're getting the substandard tablet experience you just paid next to nothing for. This year, Amazon has a new Kindle Fire called the Kindle Fire HD that's a noticeable improvement over the original. But is it the "best tablet at any price"? Nope. If you read the reviews, including mine, you'll quickly learn Bezos seems to have adopted the "reality distortion field" that Steve Jobs was famous for. Does that mean the Kindle Fire HD is horrible? No. Not at all. In fact, it's still a decent option if you don't want to shell out $500 or more on an iPad. But how is Amazon able to make a good tablet at such a cheap price? var currExpandable="expand16"; if(typeof CNN.expandableMap==='object'){CNN.expandableMap.push(currExpandable);} var mObj={}; mObj.type='video'; mObj.contentId=''; mObj.source='technology/2012/09/06/amazon-kindle-fire-service.fortune'; mObj.videoSource='CNNMoney'; mObj.videoSourceUrl='http://money.cnn.com/video/technology/'; mObj.lgImage="http://i2.cdn.turner.com/cnn/dam/assets/120906074415-kindle-fire-hd-story-body.jpg"; mObj.lgImageX=300; mObj.lgImageY=169; mObj.origImageX="214"; mObj.origImageY="120"; mObj.contentType='video'; CNN.expElements.expand16Store=mObj; New Kindle tablet targets the iPad var currExpandable="expand26"; if(typeof CNN.expandableMap==='object'){CNN.expandableMap.push(currExpandable);} var mObj={}; mObj.type='video'; mObj.contentId=''; mObj.source='tech/2012/09/06/lkl-simon-new-amazon-tablets.cnn'; mObj.videoSource='CNN'; mObj.videoSourceUrl=''; mObj.lgImage="http://i2.cdn.turner.com/cnn/dam/assets/120906112932-lkl-simon-new-amazon-tablets-00011710-story-body.jpg"; mObj.lgImageX=300; mObj.lgImageY=169; mObj.origImageX="214"; mObj.origImageY="120"; mObj.contentType='video'; CNN.expElements.expand26Store=mObj; Amazon announces new wave of Kindles Simple. Like Amazon.com, the Kindle Fire HD is built to find ways to sell you more stuff. First, and most annoyingly of all, the Kindle Fire HD displays full-color ads on its lock screen. That means every time you switch the device on, you see an ad for stuff like a Kindle e-book, a movie download, music from Amazon's MP3 store and the like. Amazon told me you'll also see a lot of third-party ads for products outside Amazon's ecosystem. The good news is, if the ads really bother you, you can pay $15 to Amazon after you purchase the device to remove them for good. But Amazon didn't stop with the ads. When you're using the tablet, you're constantly inundated with suggestions to check out more Amazon products. The most blatant example of this is on the Kindle Fire HD's home screen. Whenever you hover over an app, movie, song or book, there's a section at the bottom of the screen that suggests other apps, movies, songs or books that you might want to buy. Do you like playing Angry Birds? Buy Cut the Rope! Do you like listening to Nicki Minaj? Check out Katy Perry's latest album! You get the idea. It's nearly identical to the way Amazon's website suggests items to you when you're shopping around. These ads and suggested items are a clever way for Amazon to continue to drive value out of you months and months after you buy the Kindle Fire HD. And it's completely antithetical to your typical tablet experience. Tablets are supposed to be computing devices, helping you browse the Web, check e-mail, manage your calendar and the like. Yes, they make it easy to buy new content, but on devices like the iPad and Google's Nexus 7, you're not constantly pushed to do so. But Amazon doesn't see it that way. It's just another portal to get you to buy. When you buy a Kindle Fire HD, it doesn't feel like your tablet. It feels like Amazon's. Is this a dealbreaker? No way. In fact, I imagine there are plenty of people out there who won't mind looking at ads and suggestions for stuff to buy if it means getting a decent tablet for less than $200. But if I had a choice between a $199 tablet with ads and offers (like the Kindle Fire) and a $199 without ads and offers (like the Nexus 7), I'd go with the latter every time. if(typeof CNN.expElements==='object'){CNN.expElements.init();}