“We will continue to add more ways to earn and spend Coins on a wider range of content and activities,” Mike George, Amazon’s VP of apps and games, said in a statement. “Today is Day One for Coins.”

Users can buy 100 coins for $1, with discounts up to 10 percent for larger purchases. Developers get their standard 70 percent revenue share for purchases made with Amazon Coins.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• A look back at mobile in the third quarter
• A near-term outlook for the mobile app marketplace
• Research In Motion: future scenarios for its fate

This turns the Kindle Fire into a potentially lucrative product for Amazon, even though most believe it sells the Kindle Fire products near cost, if not below it. Even better: The combination of decreasing hardware prices over time and a rise in content sales — think apps, movies, books, music — will help the product line even more, according to Markkanen:

“Considering the probable margins of app and content sales, our research shows that Kindle Fire is a credible proposition. We expect that there will be a certain level of ‘innovation plateauing’ in mobile hardware taking place over the next five years, and that would certainly work in Amazon’s favor. Its future devices are likely to require less cross-subsidy than the ones we’ve seen so far.”

Markkanen may not have the exact figure for content profits required, but you can bet Amazon does. And this may be why the company wanted to retain control over mobile app pricing when it launched its alternative Appstore. By understanding consumer preferences perhaps better than any other online retailer, Amazon knows the right pricing “mix” for content sales to make money off hardware sales.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Tablets wars: Apple is from Venus, Amazon is from Mars
• What Amazon’s new Kindle line means for Apple, Netflix and online media
• A look back at mobile in the third quarter

The steps to download or install are available from the XDA Developers site and of course, it’s recommended to perform a full backup of your Kindle Fire in advance. Installing the software will completely remove Amazon’s Kindle Fire software, which uses a customized version of Android. You’ll lose the ability to watch Amazon Instant Video if you take the plunge, but your Kindle Fire will gain far more as it can be used as a full Android tablet.

How well does the Kindle Fire work as an Android 4.2.1 tablet? Pretty good, based on Liliputing’s hands-on video:

I wouldn’t foresee most Kindle Fire owners make the leap of turning their device into a full Android tablet, but enthusiasts might.

Thanks to occasional sales and refurbished deals, you can pick up the Kindle Fire for less than its $159 current price. Add this custom software to a low-cost Kindle Fire and you have a compelling Android tablet without paying full price for a Nexus 7 or other small slate. You won’t have camera support and the screen resolution of the Kindle Fire is lower than the Nexus 7, but it’s still a compelling solution on the cheap.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Takeaways from mobile’s second quarter
• Tablets wars: Apple is from Venus, Amazon is from Mars
• A near-term outlook for the mobile app marketplace

While Amazon has had its own Appstore for Android devices since March 2011, I suspect most of the growth came from Amazon’s own mobile devices and not Android smartphones or tablets made by others. A few phones have come with the Amazon Appstore pre-installed, but most do not. That means consumers have to learn about Amazon’s storefront on their own and then install it themselves. Google’s own Play store is central to the Android experience, which is a potential barrier here.

There’s no Google Play on the Kindle Fire or Kindle Fire HD tablets, however. It’s Amazon’s Appstore or nothing, save for any hacking or tinkering that might enable traditional Android apps. For that reason, assuming reasonably good sales of Kindle Fire tablets, most of the app download growth is likely from Amazon’s own hardware. That’s not necessarily a bad thing, particularly if the company launches a smartphone, as some expect it to do.

But the growth isn’t related solely to device sales: Amazon has made a serious attempt to help developers create or port applications to the Amazon Appstore. Along with the download figures shared on Thursday, Amazon announced support for A/B testing:

“With A/B Testing, developers can test simultaneous treatments of their apps, receive data about what’s worked best, and quickly adjust their apps to take advantage of this customer learning. A/B Testing is the latest developer service that Amazon has launched (along with Achievements, Leaderboards, Whispersync across devices, In-App Purchasing, and 1-Click Purchasing) that make it simpler than ever for app developers to concentrate on the differentiating parts of their apps rather than the undifferentiated infrastructure and engagement components.”

That’s a nice development feature that could give programmers a better idea of what consumers do and don’t like about application changes. From there, a developer could quickly adjust code for the optimal experience.

This new development feature is just another in a long list that Amazon has provided since launching the Appstore: GameCircle, a Maps API, Test Drive (Amazon says 20,000 apps can be consumer tested online for free), localization support, and a Kindle Fire emulator are all part of the developer experience now. And the better Amazon treats its developers with supporting tools, the better the apps will be helping to fan the Kindle Fire download flame higher and higher.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Is Android broken and if so, will Google fix it?
• A look back at mobile in Q1
• A near-term outlook for the mobile app marketplace

Although I’ve only just started using the iPad mini, there isn’t much new in the experience because it runs all of the apps that any iPad can run. That’s a good thing. The camera quality is better than I expected so far and because the tablet is so light and thin, I could envision myself taking it everywhere; just as I did my with Nexus 7 tablet.

So is the 1024 x 768 screen resolution an issue? Not as much as you’d think, even though that’s the same resolution as the first and second iPad models. As I explain in the video, cramming the same number of pixels into a small screen adds some clarity. It’s no Retina Display, but it’s better than the first two iPads.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Takeaways from connected consumer’s second quarter
• Takeaways from mobile’s second quarter
• A near-term outlook for the mobile app marketplace

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Who and what to watch in the new era of the living room
• Connected world: the consumer technology revolution
• Social-TV apps and consumer behavior

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Who and what to watch in the new era of the living room
• Connected world: the consumer technology revolution
• Report: The Connected TV Marketplace

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Mobile 2012 and beyond
• A look back at mobile in Q1
• CES 2012: a recap and analysis

Indeed, TI’s OMAP line has had few major product design wins of late. It powers the new Kindle Fire HD tablets, the Barnes & Noble Nook Tablet, and a fair number of Motorola phones. Even Motorola, however, has recently switched to alternatives from Qualcomm: The company’s new Razr HD and Razr HD Maxx will use a Qualcomm Snapdragon chip; a change from the prior Razr models that relied on a TI OMAP.

Texas Instrument’s OMAP woes, however, could be a benefit to Amazon in several ways. First, although the up-front cost would be massive, the purchase could cut the unit costs to produce hardware such as Kindle e-readers and tablets. Currently, Amazon sells hardware roughly for cost, with hopes of recouping revenues and profits through content sales. By producing chips in house, profits could be seen on the hardware although it could time to realize such benefits; it’s not cheap to sink money into long-term capital such as chip fabrication production lines.

Having its own chip business could lead Amazon to customize the silicon so that its optimized for Amazon’s products. This approach is similar to that of Apple, which creates custom chips that are made to run iOS to its full potential. While Amazon doesn’t have a mobile operating system of it’s own, the company is using Google Android as a base with Amazon software for the user interface. With a chip business, Amazon could improve the performance of its tablets by optimizing the union of silicon and software.

This situation does cause one to think about Amazon getting into the smartphone business as well. As noted, TI’s OMAP chip already powers numerous Motorola handsets as well as my own Samsung Galaxy Nexus handset. I’d say there’s an outlier chance here as the smartphone market isn’t an easy one to crack. It’s not out the realm of possibilities, of course, and if Amazon is going to spend billions for a chip business, it will surely want to maximize its return on that investment.

That leads to one other possibility here if Amazon were to buy the OMAP business from TI: Servers. While Amazon is known as a retail and content company, it’s a cloud company when you peek inside.

The company relies heavily on its cloud services for the retail experience, Whispersync technology and its AWS, or Amazon Web Services which let users rent computing storage and processing power in the cloud. For some time, x86 chips have powered cloud-based servers, but cloud computing can be done on smartphone chips as well; an OMAP purchase could reduce Amazon’s cloud costs and even lead to custom hardware that’s more power efficient.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Tablets wars: Apple is from Venus, Amazon is from Mars
• What Amazon’s new Kindle line means for Apple, Netflix and online media
• The evolution of consumer-media cloud storage

“We’re Barnes & Noble and books is one of our main categories,” Theresa Horner, B&N’s VP of digital content, said at a briefing Tuesday. I’d say it’s the main category, but either way, the company is using reading and recommendations as a selling point for the new tablets.

“You have an iPad, I have one”

Barnes & Noble is in a weird position because it’s not the iPad or the Kindle Fire. “You have an iPad, I have one,” said John Basanese, director of software QA engineering, at the briefing. The Nook HDs clearly aren’t in the same category as the iPad, but they’re also in the same range as a bunch of other budget tablets, and Nook devices haven’t been as popular as Kindles. So how does Barnes & Noble promote them? They do this by touting the tech specs — “the lightest, lowest full HD tablet ever,” with a display designed to take advantage of the new Nook Video — but also by promoting family-friendly and reading features.

First, the specs: The Nook HD has a 7-inch screen with 1440 x 900 resolution and 243 pixels per inch and supports 720p HD video playback. It comes in an 8 GB model ($199) and a 16 GB model ($229). Its battery life is up to 10.5 hours for reading and up to 9 hours of watching video.

The Nook HD+ has a 9-inch screen with 1920 x 1280 resolution and 256 pixels per inch and supports 1080 HD. It comes in a 16 GB model ($269) and a 32 GB model ($299), both of which are cheaper than the new Amazon Kindle Fire HD with Wi-Fi. Its battery life is up to 10 hours of reading and up to 9 hours of video.

Both tablets have expandable memory, up to 64 GB and both have Wi-Fi and Bluetooth. No 3G, no 4G, no GPS.

In the US, the tablets can be preordered starting Wednesday and will ship in late October. They will also be available in the United Kingdom, beginning in late November.

The company declined to discuss whether earlier Nook tablet models get price drops with the launch of the new devices, but Chris Peifer, VP of digital development, said the Nook Color is “very close to its end” and the company is no longer making new ones.

On to those family-friendly features: “The average American woman’s hand is 172 millimeters,” and B&N says it designed the Nook HD so that the average women can easily hold it in one hand. This means the Nook HD is longer and skinnier than the Kindle Fire (both have the same size of screen but the Kindle Fire has a wider bezel).

At the briefing, company reps spent a disproportionately long time focusing on “family profiles,” which let parents and kids (up to six accounts total) share one device. Adults creating profiles for children can set limits on what their kids can and can’t do on the tablet. For example, they can ban shopping completely or allow “kid-friendly” shopping, which allows children only to access “safe” content from a preselected list. (Basanese mentioned “some self-published content” as an example of content that would not be kid-friendly.) The new Kindle Fires contain similar kid-limiting features.

Bringing “human” booksellers’ knowledge to the tablet

Until now, B&N’s chief Nook bookseller Jim Mustich said, the company hasn’t translated “all of the knowledge that makes our stores gathering places for people and allows people to discover things” into its devices. In other words, how do you bring a bricks-and-mortar bookstore experience to a tablet? “We’re tapping into the human knowledge of Barnes & Noble and our booksellers,” Mustich said.

So now you can browse Barnes & Noble’s store from directly inside a book. If you’re reading a Rachael Ray cookbook, for example, tap the bottom of the screen to pull up other books by her and similar titles. “We’re trying to integrate that shopping experience from right inside the book,” Horner said. “We don’t require somebody to go to the shop.”

The company is introducing “Nook Channels,” curated collections of books that “speak to a certain type of reading or a certain type of content.” Mustich says the company had the idea when he and B&N CEO William Lynch were in an elevator together and Lynch mentioned that he’d liked Ernest Hemingway’s The Sun Also Rises and wanted to read other books like it. If you look up that title in other online bookstores, Mustich says, “you get a high-school reading list, books like The Great Gatsby, when what you really want is James Salter.”  The channels have titles like “Digging into Murder,” “Jane Austen & Heirs,” and “International Intrigue.” Each contains 40 to 50 titles, most curated by Barnes & Noble booksellers. The channels will eventually include other types of content, too (like movies), and users will be able to improve recommendations by ‘liking’ or ‘not liking’ books that pop up in their stream.

It’s our job to “tease out what the reader likes,” Mustich said. “We really want the discovery process to be associated with the Nook.”

Similarly, on the home screen of the new Nook HDs, there’s a “Your Nook Today” button. Tap it and it pulls up the weather in your city, a book recommendation based on the content on your device, and “a three-minute read,” a short piece of editorial content that Mustich described as “a small way to promote engagement.”

“Rip out the page”

With the new tablets, Barnes & Noble is improving its magazine-reading experience and also adding about 100 catalogs — from retailers like L.L. Bean and Pottery Barn — for free browsing. Users can pinch out to view a “visual table of contents, and tap products in a catalog to buy them online. In a Pinterest-inspired feature, they can also “rip out a page” from a catalog or magazine by swiping their finger down the screen. This adds the page to a “scrapbook” that can be accessed from the tablet’s home screen, so users can create inspirational idea books on different themes. This only works on catalogs and on magazines that you purchase, of course. It doesn’t apply to books and the scrapbooks can’t be exported to Pinterest or as a PDF, which limits this feature’s usefulness. Still, it’s interesting to see a tablet incorporate these curating and pinning features.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Tablet market to hit over 377 million units by 2016
• Connected world: the consumer technology revolution
• Forecast: the evolution of the e-book market