Amazon's Big Bet on Content Over Devices

Underlying all of Jeff Bezos big Kindle announcements Thursday was the message that Amazon is betting big on selling content, more than devices.

Amazon Kindle fire HD
Amazon Kindle fire HD

After revealing that the Kindle Fire HD would start at $199 for the 7-inch version with 16 GB, $299 for the 8.9 inch, 7 GB version, Bezos addressed the question "How are these prices possible?"

"We want to make money when people use our devices, not when people buy our devices," Bezos said to the audience of about 250 at Amazon's big press event. (Read More: Amazon Introduces New Kindle And Bigger Version of the Fire.)

He added that the company "also doesn't want to lose money on devices, because that misaligns you with consumers."

But bottom line, this looks an awful lot like a razor/razor blade model, and there's some subsidizing going on. (Read More: Amazon's Risky Bet on Profit-Free Hardware.)

And the new models do seem designed to improve the way people experience content more interactive, with new "X-Ray" technology.

Integration with IMDb allows users to click on a character in a movie for info about an actor. Click on a word in a textbook for history and background. And new "Whispersync" technology allows readers to seamlessly move between books and audio books, while gamers' can move between devices without losing their spot in the game. If Kindle owners want their kids reading, rather than playing those games, "FreeTime" technology automatically sets those limits.

Now we're waiting to see what Apple has up its sleeve to counter Thursday's announcements. (Read More: Apple Will Make Big Announcement Next Week, Hints at iPhone 5.)

—By CNBC's Julia Boorstin

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