Amazon’s $199 Kindle Fire: Seven-inch display, no camera & mic, 30-day free Prime trial

Note: This is a mockup, not the actual Kindle Fire

Just as Amazon’s media event begins in New York, serving as a launchpad for their inaugural tablet, Bloomberg spoils the announcement by publishing key pieces of information about the device. It will be called the Kindle Fire, as rumored, and will cost just $199, which is a pretty big deal. The tablet has a seven-inch color display which responds to touch (just two fingersat once, though) and a “fresh and easy user interface” running on a forked Android version. Another biggie: The device will come with a 60-day free trial of Amazon Prime (a $79 a year value) membership.

Bad news: It has no cameras – not even a microphone. Heck, it even lacks 3G access so looks like the Fire will be a WiFi affair only. We’ll have more info soon as our own Seth Weintraub is on the scene in New York at Amazon’s press conference.

Chief Executive Officer Jeff Bezos is betting he can leverage Amazon’s dominance in e-commerce to pose a real challenge to Apple’s iPad, after tablets from rivals such as Hewlett-Packard Co. and Research In Motion Ltd. have fallen short. Sales of Amazon’s electronic books, movies and music on the device may help make up for the narrower profit margins that are likely to result from the low price, said Brian Blair, an analyst at Wedge Partners Corp. in New York.

The analyst observes what all of us have known for a long time, that the Seattle-based online retailer has the most compelling ecosystem to take on Apple’s iTunes juggernaut:

Amazon is really the only other guy, the only other potential tablet player, that has a similar offering to what Apple has. If you look across their product offerings, they have content that none of the other tablet makers currently have because they have content on the media side.

Amazon was probably rushing to get this thing out of the door ahead of the all-important holiday shopping season. They are also rumored to be working on a 10.10-inch Android tablet.

Cross-posted at 9to5Mac.com.