Amazon Prepares for Holiday Battle

Amazon Prepares for Holiday Battle dominated the headlines this morning by unveiling a new generation of Kindle Fire HDX tablets. The e-tail giant's new flagship 7-inch device will now start at $229, a moderate increase from $199. Amazon is also aggressively dropping the price of the second-generation Kindle Fire HD to $139, segmenting the market further.

The pricing move follows Google, which released updated Nexus 7 tablets a couple months ago while also raising the entry-level price to $229. Unlike Amazon, Google discontinued the outgoing model and is not targeting lower price points.

Inside the Kindle Fire HDX is a quad-core Qualcomm Snapdragon 800 processor, replacing the Texas Instruments OMAP chips that have historically powered the Kindle Fire family. This marks the latest tablet win for Qualcomm, while rival NVIDIA continues to miss out on big spots this year. NVIDIA will power Microsoft's Surface 2, but the software giant's track record with Surface unit shipments is poor.

In other tech news, IHS iSuppli estimates that Apple's new iPhone 5s costs $199 to build, while the 5c costs $173. Those are lower than 2012 cost estimates, which suggests that Apple may have some margin tailwinds. However, investors will need to remember other factors that affect overall gross margin.

In today's episode of Tech Teardown, Erin Kennedy discusses recent headlines with Evan Niu, CFA.

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Erin Kennedy owns shares of Apple. Evan Niu, CFA, owns shares of Apple and Qualcomm. The Motley Fool recommends, Apple, Google, and NVIDIA. The Motley Fool owns shares of, Apple, Google, Microsoft, and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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