US online retail giant Amazon launched a touchscreen tablet computer, the Kindle Fire, on Wednesday that costs $199, less than half the price of the cheapest iPad from market-leader Apple.

Amazon CEO Jeff Bezos introduces the new line of Kindle products in New York. Besos introduced (L-R) the Kindle Fire, the Kindle Touch 3G, the Kindle Touch and a new lighter and smaller Kindle

The Kindle Fire, which has a seven-inch (17.78-centimeter) screen, smaller than the iPad\'s 9.7 inches (24.6 cm), will ship in the United States on November 15 and could emerge as a strong rival to the Apple device.

"Kindle Fire brings together all of the things we\'ve been working on at Amazon for over 15 years into a single, fully-integrated service for customers," Amazon founder and chief executive Jeff Bezos said.

Bezos also unveiled three new Kindle electronic book readers at a launch event in Manhattan: a new basic Kindle for $79, a Kindle Touch for $99 and a Kindle Touch 3G for $149.

"We\'re offering premium products, and we\'re doing it at non-premium prices," he said.

The Kindle Fire has Wi-Fi connectivity only and is powered by Google\'s Android software. It does not have a camera like many other leading tablets, including the latest iPad.

Bezos said Amazon is hoping to sell "many millions" and touted the features of a new Web browser in the Kindle Fire called Amazon Silk.

According to technology analysts, a low-priced Amazon tablet could pose the most serious challenge yet to the iPad, which has dominated the fast-growing market for tablet computers since it went on sale in April 2010.

"Amazon will sell millions of tablets, and the rapid fire adoption of the Kindle Fire will give app developers a reason -- finally -- to develop Android tablet apps," said Forrester Research analyst Sarah Rotman Epps.

"Apple\'s place as market leader is secure, but Amazon will be a strong number two, and we expect no other serious tablet competitors until Windows 8 tablets launch," Rotman Epps said.

According to technology research firm Gartner, the iPad will account for 68.7 percent of the 69.7 million tablets sold this year and will remain the top-selling device over the next few years.

At $199, Amazon is significantly undercutting Apple with the price of the Kindle Fire. Apple\'s cheapest iPad sells for $499.

"Amazon is competing on price, content, and commerce," Rotman Epps said.

The Kindle Fire connects to Amazon\'s App Store and it comes with a 30-day free subscription to Amazon Prime, whose members pay $79 a year for free shipping and other benefits such as unlimited streaming of movies and TV shows.

The Kindle Fire also has a pre-installed Amazon shopping application as Amazon, like Apple, seeks to drive owners of the tablet to its online store, which features books, music, movies, TV shows and games.

"Over the past few years, Amazon\'s customers have gotten used to one-click purchases of books and other published content via the Kindle," independent technology analyst Carmi Levy told AFP.

"(Amazon\'s) goal is to drive as much business as possible to and through its online retail presence," he said. "Amazon doesn\'t need to maximize its profits on every tablet sold.

"It\'ll take thinner margins -- or even per-unit losses -- if that means getting as many Amazon tablets into consumers\' hands before the all-important Christmas shopping season," the analyst said.

Technology research firm Forrester has forecast that Amazon could sell 3-5 million tablets in the fourth quarter alone.

Apple sold 9.25 million iPads last quarter and has sold nearly 30 million since launching the device in 2010.

Amazon shares gained 2.45 percent to $229.71 on Wall Street on Wednesday.

Shares in US bookseller Barnes & Noble, which makes the Nook e-reader and a color Nook tablet, lost 6.89 percent to close at $12.30 while Apple lost 0.56 percent to $391.01.