Amazon announced a lot of Kindles today at their press event. The Kindle Paperwhite is already looking pretty sweet and the cheaper standard Kindle is much appreciated. Despite all these great new Kindle announcements, the star of the show was the Kindle Fire HD. It’s an impressive device that should have Apple and Google concerned.

First and foremost, let’s take a look at this things’s specs. The Kindle Fire HD comes in two flavors – 7-inch and 8.9-inch. Both of them will feature 16GB of onboard memory and a TI OMAP4470 processor that Amazon claims is more powerful than the Nvidia Tegra 3 that powers the Nexus 7. The new iPad’s A5X processor is clocked at 1GHz while the OMAP4470 can be clocked up to 1.8GHz. If used effectively, the Fire HD could easily outperform the new iPad.

Apple’s iPad still holds a few key areas of dominance. Namely, the screen size on the iPad (10-inches) is still bigger than the biggest Kindle Fire HD. The new iPad also features the spectacular retina display that has a max resolution of 2048×1536. The Kindle Fire HD features a resolution of 1920×1200. Both displays are above 1080p, but the iPad is the clear winner here. The Nexus 7’s paltry 1280×800 resolution can’t even compete.

The price is where things go directly to Amazon’s favor. The 7-inch Kindle Fire HD is priced at a very affordable $199 whereas the 8.9-inch model will retail for $299. The 16GB model of the new iPad is priced at $499. Beyond size and resolution, there’s not much difference between the two devices.

Amazon sweetened the deal even more with an announcement of a 32GB Kindle Fire HD with 4G LTE connectivity for only $499. The iPad equivalent goes for $729. Even better, Amazon will be offering their own data plan that only costs $50 a year. Apple offers 4G LTE through either AT&T or Verizon. Both carriers aren’t as cheap when it comes to data.

Is Apple suddenly in trouble with the announcement of new cheaper, and possibly superior, Kindles? Of course not. Apple has the brand recognition and power that drives people to forsake food for a month just to afford a new iPad or iPhone. What Apple should be concerned about is a quote from Amazon’s CEO Jeff Bezos on why they’re able to offer their devices for such a cheap price:

“We want to make money when people use our devices, not when they buy our devices.”

That sentence reaffirms Amazon’s commitment to content over everything else. It’s content that drives the Amazon App Store to be more profitable than Google Play. It’s that content that drives people to download Kindle exclusive books more than 100 million times. It’s that commitment to content that had the original Kindle Fire owning 22 percent of the tablet market.

For their part, Apple has plenty of content as well. The combination of iTunes and the Appstore have been ridiculously profitable for Apple. The real difference is that Amazon has a strong retail background. They know how to best sell content and offer regular discounts and promotions to get content into people’s hands.

The Kindle Fire HD is a challenge that Amazon is issuing to its competitors. As Bezos said today, the Kindle Fire HD is a “hardware device as a service.” Amazon offers some of the best service in both the physical and digital industries. Combining them into a single product is pretty awe inspiring.