Analysts say that the low price of the Kindle Fire is likely to force other tablet manufacturers, including Apple, to cut their prices.
According to Amazon, users will be able to access movies, television shows, songs, applications and games directly via its existing website. A possible downfall for the Fire is that it is not equipped with a camera and is unable to make video calls.
Amazon's chief executive, Jeff Bezos says the Fire is aimed at providing users with a premium product that does not carry a premium price. He says the company expects to sell millions of tablet computers when it goes on sale in the United States on 15 November.
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View more information on Amazon's Kindle Fire.
