Amazon launched two different Kindle Fire HD tablets, a Paperwhite Kindle eBook reader, and upgraded and lowered the price of the Kindle to $59. The Kindle Fire HD starts at $199 for 16GB 7". They have ultra high resolution screens (the 7" is 1280x800), plus an 8.9" at $299 (with a 1900x1280 display), dual speakers for Dolby stereo, boosted graphics and processors, and dual band WiFi antennas. Leo says that Bezos can make the price so low because Amazon wants to sell content for it through their one click system, which more than makes up for any loss on hardware.
Leo also says that the world is changing again and the emphasis isn't really about hardware anymore - it's about content. Google has the Play store, Microsoft has the XBox Media Center, and Apple has their App stores. Since it's pretty much known how to build tablets (and many just contract them out from tablet manufacturers), stores like Amazon can come up with a list of specs and not bother with development and innovation costs.