Amazon shares hit a record high of $250 after the announcement, before paring gains to $247.37, up 25 cents on the day.

Amazon Chief Executive Jeff Bezos said the 7-inch Kindle Fire has grabbed 22 percent of U.S. tablet sales since it hit stores in November at $199, well below the price of Apple Inc's market-leading iPad.

Amazon is holding a media event on September 6 in Santa Monica, California, fueling speculation that it will launch new tablet devices.

"We have an exciting roadmap ahead," Bezos said in a news release. "We will continue to offer our customers the best hardware, the best prices, the best customer service, the best cross-platform interoperability, and the best content ecosystem."

Less than a week after Amazon's event, Apple is planning a news conference where it is expected to unveil a new version of its iPhone. However, some analysts also expect Apple to launch a smaller tablet this year to compete with the cheaper Kindle Fire.

The tablet market is among the fastest-growing sectors of the technology industry. Research firm Gartner is forecasting tablet sales almost to double this year to 118.9 million units. That has lured many of the largest technology companies.

Google Inc recently introduced a 7-inch tablet called Nexus 7, which has been selling well. Microsoft Corp is expected to launch its Surface tablet later this year. Barnes & Noble Inc's Nook tablet, introduced last autumn, has also been popular.

Amazon said only that its Kindle Fire was sold out. It did not indicate when the device would be back in stock, or how many it has sold. An Amazon representative was not immediately available for further comment.

Since the launch of the tablet last year, Amazon's top-selling products have all been digital items such as music, videos and movies, it said.

(Reporting by Alistair Barr in San Francisco and Phil Wahba in New York; editing by Gerald E. McCormick and Matthew Lewis)

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