Amazon – the largest online retailer the web has ever came to know – might not be a company with extensive experience in designing tablets, but if sale reports for the original Amazon Kindle Fire are anything to go by, the Seattle-, Washington based retailer is doing a whole lot better of a job than almost every other tablet manufacturer out there except Apple.

In the other corner, Apple is the company that has first managed to go through the process of designing a thin device that has the exact same features of a modern day smartphone, but with a bigger touchscreen display, thus creating the tablet market from roughly scratch.

While Amazon was not willing to share exact sales numbers numbers, Jeff Bozos (CEO for Amazon) claimed that the Kindle Fire has captured 22 percent of tablet sales in the USA. According to the fellows over at MaximumPC, 22 percent of the US tablet sales should translate into roughly 5 million units. Unfortunately for Amazon though, it is still unknown if the money lost by the retailer with each unit it has sold was recovered via content sales.

Apple, on the other hand, is making a whole lotta profit out of the iPads. Apple is believed to have a market share in the worldwide tablet sector of above 66 percent, with projected global sales surpassing 70 million units for 2012. Add the fact that the Apple iPads are sold with one of the largest profit margins you’ll encounter in the tablet market (a principle that the Cupertino company has applied to most its products), and Apple are clearly making a lotta money out of iPads.

Amazon Aims High with the 8.9-inch Kindle Fire HD

Apparently, Amazon has realized that it’ll soon be unable to maintain its impressive lead in the budget tablet market (a market that it has basically created with the original Kindle Fire), as Google has launched its impressive Nexus 7 tablet, while Apple is rumored to launch its own budget tablet in October. So what is there to do when other companies start taking bites out of your market share? Easy: start expanding into new markets!

And this is exactly what Amazon did on September 5th: the new Kindle Fire is aiming at the dirt-cheap tablet market (priced at $150), the 7-inch Kindle Fire HD aims to overthrow the Google Nexus 7 as the best budget tablet (price range: $200 – $250), while the 8.9 inch Kindle Fire HD aims to be a high-end device, despite the fact that it is priced considerably lower than other tablets featuring the same kind of specs, starting at just $299.

And this is how we reach a logical question: do the differences between the new Apple iPad (third generation) and the 8.9 inch Kindle Fire HD justify the $200 price difference between the most basic models of the two tablets? Read on for a complete answer to that question as we compare the Apple iPad 3 with the Amazon Kindle Fire HD (8.9 inch) in the following areas: display, internal hardware, OS and ecosystem, and, finally, price and release date.

Display

As most tech fans probably know, the main attraction of the new Apple iPad is its Retina display. At 9.7 inches across its diagonal, the new iPad’s LED-backlit IPS TFT display uses a 2048 x 1536 pixel resolution, the highest resolution you’ll encounter on any tablet currently announced. The Apple iPad 3 display features a PPI (Pixel Per Inch) density of 264, also currently a valid record in the tablet market.

The 8.9-inch Amazon Kindle Fire HD has an 8.9-inch display (DUH!) that works at a 1920 x 1200 pixel resolution (the same resolution used by ASUS in its current flagship tablet, the ASUS Transformer Prime Infinity). Thanks to the smaller screen, the PPI density isn’t much smaller on the Kindle Fire HD display than it is with the new iPad’s display. With a PPI of 254, it is safe to say that the display on the 8.9 inch Amazon Kindle Fire HD is almost as sharp as that of the Apple iPad 3, although it is 0.8 inches smaller. However, one advantage that the 8.9 inch Kindle Fire HD has over the new iPad is the first’s anti-glare technology.

Here’s a sample from Amazon’s pitch on the anti-glare technology:

“Kindle Fire HD solves this air gap problem by laminating the touch sensor and the LCD together into a single layer of glass, creating a display that’s easy to view, even in overhead light.”

Since all Amazon Kindle models are dedicated towards consuming Amazon content – and this includes an impressive collection of ebooks, magazines, and movies – this is a most welcomed feature.

Verdict: Draw: The Kindle Fire HD has a noticeably smaller display, but the quality difference is virtually indistinguishable

Internal Hardware

CPU, GPU & RAM

Down to more serious business, when Amazon announced that the Texas Instruments OMAP 4470 chips will be powering the 8.9-inch version of the Kindle HD, it also claimed that the chip is faster than the Nvidia Tegra 3 SoC. However, while the 1.5Ghz dual-core processor inside the Kindle HD is believed to be faster than the 1.4GHz quad-core CPU inside the Tegra 3, many experts believe that the GPU inside Nvidia’s latest SoCs is better than that offered by the TI OMAP 4470.

In the other corner, Apple has used the new A5X chip inside the third-generation iPad. Apple A5X vs Nvidia Tegra 3 benchmarks have proven that Apple’s latest chip is currently the fastest chip on the market when it comes to both CPU and GPU tests. In this context, I’d assume that the performance offered by the CPU inside the Amazon Kindle Fire will be comparable, but the latter will not be able to compete against the iPad’s more powerful GPU.

While GPU tests are heavily influenced by the resolution – and the Amazon Kindle Fire HD uses a smaller resolution – the difference in raw processing power will most likely prove to be bit too much for the TI OMAP 4470 chip.

On to the amount of RAM memory, the latest version of Apple’s iPad carries 1GB of RAM, while the 8.9-inch Amazon Kindle Fire HD is presumably using the same amount of RAM (presumably since Amazon has not shared any info on the exact amount of RAM inside the flagship tablet).

Internal Storage & Cameras

The Wi-Fi only 8.9-inch Amazon Kindle Fire HD comes in 16GB or 32GB models, while the LTE enabled Fire HD will be available with 32GB or 64GB of internal storage. Since we’re at the storage chapter, you should also be aware of the fact that Amazon is throwing in 20GB of cloud storage space for your own stuff, and unlimited cloud storage for all Amazon content.

In the Apple corner, the new iPad comes in 16GB, 32GB, and 64GB versions and offers up to 5GB of iCloud storage no matter whether they’re cellular-enabled or Wi-Fi-only versions.

When it comes to cameras, the new iPad has a 5MP rear facing camera capable of 1080p videos and a VGA camera for video chatting. The Amazon Kindle Fire HD does not feature a rear facing camera, although it features a HD front-facing camera for Skype calls and such.

Wi-Fi and LTE

The LTE-enabled version of the new Apple iPad can work with both Verizon and AT&T (two of the major carriers that offer LTE connectivity in the U.S.), while the LTE version of the Amazon Kindle Fire HD (8.9 inches) will only work with AT&T.

Amazon has a nice trick up its sleeve when it comes to the LTE-enabled version of the Kindle Fire HD, as it will offer you 250MB per month for an entire year in exchange for a single $50 downpayment. It may not look like that’s a big enough cap, but you’ll most likely use the Fire HD predominantly on a Wi-Fi connection anyway, right?

Verdict: The Apple iPad wins this round, mostly thanks to a better GPU

OS and Ecosystem

Amazon has opted to go for a heavily modified and ad-supported version of Google’s Android 4.0 Ice Cream Sandwich. Unfortunately though, while the ICS source code is there, you won’t know it thanks to the intense customization. Basically all you can do with the Amazon Kindle Fire HD is to access Amazon’s Appstore or buy books, music and magazines or rent movies. Google’s products are virtually non-existent on all the new Amazon Kindle tablets.

For video buffs, Amazon offers its Amazon Prime subscription-based membership, meaning that for $79 per year, you’ll be granted unlimited access to Amazon’s selection of 25,000 popular movies and TV episodes. The cool thing is that Amazon offers one month of free access to Amazon Prime so that you can test run the program for yourself.

Apple’s new iPad uses iOS 5, a (limited?) OS that offers access to the over 550,000 apps inside the Apple App Store. As far as the quality of the available apps goes, it’s safe to say that the wide diversity of quality, tablet-optimized apps offered by the iPad is unrivaled even by fully-fledged Android tablets.

Verdict: Both the Amazon Kindle HD and the Apple iPad 3 are “walled gardens” that offer little-to-no view on the other side of the hedge. If you want tons of quality apps, go for the iPad. If you want tons of books and movies, go for the Kindle Fire HD.

Availability and Price

Here is a table outlining the price differences for the various iPad 3 and Kindle Fire HD models:

As it can be observed, all but the entry-level versions of the Apple iPad 3 are priced $230 higher than the Fire HD corresponding models (when available). This is because Amazon is most likely selling the tablet at cost, making little, if any profit, on the device itself. Amazon makes money only whenever Kindle Fire users buy content from its delivery network. It has applied this strategy with the original Kindle Fire, and it seemed to work well (at least for Kindle customers). On the other hand, Apple makes most of its profit on the iPads thanks to the high price of the actual device.

The Apple iPad 3 has been available since March this year, while the Amazon Kindle Fire HD will be released on November 20.

Conclusion

To sum it up, the Amazon Kindle Fire HD (8.9-inch) is almost as powerful as the iPad, has a similarly sharp display (albeit 0.8 inches smaller) and uses the same “walled garden” model for its OS. From where I’m standing, I can’t see any viable reasons for any customer to pay the $230 premium just because the iPad has the Apple logo.

The 8.9-inch Kindle Fire HD is currently the tablet that offers the best bang for buck ratio around. It might not be as versatile as fully-fledged Android tablets, but the price is also significantly lower.

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