Amazon is also making the Wifi model available in the UK, Germany, France, Italy, Spain and Japan today, but IMO the big news are the drastic price cuts.
And yes, both price cuts were extreme. 20% is obviously a big cut, but for the $299 Wifi model Amazon cut the price on the same day that they expanded availability. I think the expansion probably saved Amazon from having to cut the price even more.
What we are looking at today is the aftermath of Amazon's first big hardware mistake.
Amazon had enjoyed a year of success in selling the original Kindle Fire. They weren't the largest maker of Android tablets but they were enjoying great success in the US market and ranked high just from that one market. And Amazon had enjoyed 5 years of seeing Kindles outsell other ereaders.
But then Amazon decided to take on the iPad, and that's where things went wrong. Suddenly Amazon's hardware wasn't as appealing as they expected, which makes some sense - and not just because the KFHD 8.9 wasn't the iPad.
If I had to guess, I would bet that Amazon misread the market behavior and the customer use cases. Amazon thought that they would be able to sell a limited function media tablet in the higher price ranges.
That made the 8.9" KFHD an odd duck. The thing is, all of the 10" iPad competitors are pretty hefty Android tablets in their own right. They can be used as media devices, but they can also be used as a work tool, education tablet, or be used for any number of jobs that the KFHD can't do very well.
$300/$500 is an awful lot of money for a device that is just a media tablet. If people are going to invest that much in one device it needs to do a lot more. Sure, a tablet that is designed just for consuming content can have some success at the 7" size and the lower price points, but once you hit $300 and $500 it's just not possible.
And when it comes to the limitations of the KFHD I am speaking from experience. I have a KFHD, and while I do use it as a work tool I think it does a terrible job. Switching from one app to another takes too long, the background notifications don't work, and it seems like the carousel takes joy in disappearing the apps I use the most.
Just about the only reason I keep using the KFHD is the Amazon Instant Video. That is the one Amazon product that you can't find on any other Android tablet, and it is not enough to justify the $300 and $500 price tags.
And that means Amazon is either going to have to go looking for new price points or a new model. Today they've chosen to drastically drop the price, but who know what tomorrow brings.