Amazon.com Inc. jumped into the tablet computer fray, escalating its rivalry with Apple Inc. as each aims to provide both the devices and digital stores where people buy books, songs and movies.

Standing on stage in front of a large New York audience, Amazon Chief Executive Jeff Bezos Wednesday unveiled a music- and video-playing tablet dubbed the Kindle Fire. The color touch-screen gadget takes direct aim at Apple's market-dominating iPad—particularly with its price of $199, far below the iPad's starting price of $499.

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